Transcripts For CNBC On The Money 20240713

Now becky quick. We begin with lobster the delicacy is in high demand worldwide, especially in china but like most food exports, the u. S. china tariff war is squeezing the lobster business like a lemon our Contessa Brewer found maines lobster dealers are feeling the pinch. Its this weeks cover story reporter stephanies space is small but the Lobster Company does big business in lobster. I primarily export lobster. Reporter and when the Maine Lobster industry worked to open up china markets, stephanie was right there. Investing, expanding, ramping up to meet the newly voracious appetite for u. S. Lobster. We were doing about half of our business with china. And this place wouldve been rocking and rolling. We had basically 24hour operations reporter but since last summer, stephanies sales have plummeted by half. Shes cut hours and workers. The impact of a trade war and china slapping tariffs on american lobster july 6th, 2018, it all came to a screeching halt and we didnt really sell any more lobster to china. Reporter she is not alone. The overall u. S. Lobster industry has seen its exports to china plummet 60 the first half of this year compared to the same time frame last year before tariffs went into place. And now china has just tacked on more tariffs now totaling 35 on american lobster. You know who is benefitting in this whole trade war between the u. S. And china canada its the same product on the northern side of the border as it is here in the state of maine. And so the opportunity just presented itself to them and they are capitalizing on it. Reporter canadas lobster business in china has jumped 40 this year. And canada has signed a Free Trade Agreement with the European Union that will facilitate its lobster trade there. The u. S. Has no such agreement in the meantime, u. S. Lobster exports to canada have jumped 130 sources on both sides of the border tell us they believe Maine Lobster are being shipped from canada to china, thereby avoiding tariffs the premium on selling lobster to canada is not even close to what they make selling in china. So no matter how you crack it open, the maine dealers are losing money most peoples pockets arent deep enough to sit around and take a 50 hit to your business waiting for it to return reporter the Lobster Company in the midst of a trade war trapped by tariffs and not knowing when it will end for on the money, im Contessa Brewer he is a Third Generation lobsterman from maine. It was ten years ago that he opened the first in new york city today he runs a 30 million business with a nearly 40 locations. And, luke, its good to see you. Lets talk a little bit about this when you think about lobstering, maine its still mostly small boats and independent contractors. Is that way of life under threat in the middle of these trade wars it certainly is there is a huge effort of consolidation going on right now as this margin is basically been eroded from the u. S. Export business all of our lobsters that are going to china are now going through canadian dealers, canadian wholesalers so we are losing relationships with those customers we are losing margins. And as a result the bigger businesses that have deeper pockets are coming up and grabbing some of the Smaller Companies that had these relationships with the chinese businesses what have the tariffs meant for your business . We dont do a lot of business either in the e. U. Where tariffs have also played a big role or in china so weve been able to principally skirt around it. But we spend a lot of time sitting on boards in the industry and as a thirdgeneration lobsterman, i have the best interests of the industry at heart. And whats going on is just not good for the longevity of the Maine Lobster industry are you worried overall about your friends yeah. Any type of regulation that creates instability is just not healthy. And a lot of my friends are right now trying to persevere through this and the Maine Lobster industry is one that is extremely resilient and these relationships and infrastructure that they have built, its taken years to do it and i expect they will get these customers back one day, but the staying power to wait this out, its hurtful you know, your grandfather and your father were both lobstermen before you. Why did you create your business what made you launch Lukes Lobster . Yeah. So i graduated from college in 2007, went into banking because my parents said they werent going to support my education unless i did something else. I went online looking for a lobster roll, since it reminded me of home and i couldnt find a highquality affordable lobster roll in new york so i asked my dad if he would cofund a 30,000 investment to open the first 250foot lobster shack in the east village. He said yes. I found out four years later that he borrowed that money against his 401 k but weve had great people since day one, great product and weve been able to turn that Little Lobster shack now into what it is today did you give your back the 15,000 . And some. Youve also gone into production and packaged food where do you think the potential growth in this industry is we want to be a brand that stands for quality we are completely vertically integrated we work with coops up and down maine. And then we ship it all across the u. S. And the world half of our business is the Restaurant Group the other half is our wholesale business last year we got the distinction of the Global Supplier of the year award and a lot of that right now is in unbranded wholesale products. And in the last 12 months weve been working with them to develop a line of consumer packaged goods that we are very proud of that are cobranded with the coop so a percentage of sales goes back to the source so we are building these winwins with our suppliers and with our partners like whole foods to build stability in the market how sustainable is the business now, particularly in new england where you do your sourcing this years been challenging. Weve had compounding challenges with limitations on bait and lower landings so again i cant express how resilient this industry truly is from fishermen to dealers, to processors to resalers but we could use the tide to switch a little bit right now. Good use of working within your metaphors too i want to thank you for your time and wish you the best of luck up next on the money, buying a home and need to sell your old one you know its going to be stressful. But one company is looking to disrupt and destress the old way of doing things. And later who needs Life Insurance, and how much should you get . Whether youre 20 years old or 50, weve got the policies you should be thinking about right now lets take a look at how the stock market ended the week home how about do both at the same time turns out more than half the people currently looking to sell a home are also trying to buy one at the same time and as you may know, that process rarely goes smoothly but Real Estate Company knock is disrupting the process joining us now to try and explain how it works is sean black. He is the cofounder and ceo of the company. Thanks for having me, becky so let me try and make sure i understand how this works. You are going to help me find a new home if youre going to buy a new home then you are going to help me sell my old home and then you are going to transfer that new home that you bought over to me . Yeah. Overall we are just trying to make it easy to trade in your house as it is to trade in your car. Over half the people who are buying homes in america 6 million have a house to sell and they often have to wait until they get the equity out of the home they have, not to mention the kids and the dogs and trying to work and show a home, keep it immaculate is pretty stressful so we make that whole process easier by figuring out how much your house is worth. We get your house ready once you are ready to sell it we do in fact buy your new home for you. We actually get you a discount of 3 to 5 because we are an allcash offer that sounds almost too good to be true but lets talk through a couple of the questions my first thought was, okay, youve bought the house that i want to live in. Have we already signed a deal with how much i am going to pay for it can you charge me extra on top of that . Am i going to get hosed in any way . We get the its too good to be true all the time. No, actually when we buy the house we find that house together and you and i have decided how much that is going to be and we try and get the best of a deal because we have no contingency. And then we immediately enter an agreement for you to buy it back from us for whatever we pay plus whatever our Closing Costs were. And then you move in right into the house. No extra money on top of that our Closing Costs include we are purchasing the home and putting it in our name hoa fees and interest for the couple months that youre in the home but if its not rent, we dont charge rent. That is actually less than the discount you are getting on the home we get paid 3 as a seller, buyer broker and when we sell your old home you pay us 3 like you would any broker agent how do you make sure that you dont get hosed on the deal . Do i have to qualify for a mortgage before you will even take me on correct so we are getting your home priced part of that is we are in the home inspecting it we use that to figure out how much your home is going to sell for, how long its going to take and then you have to be fully preapproved for a mortgage we give you multiple options in terms of Mortgage Partners that we work with you get the best rate from them. So we make sure that all thats buttoned up for you so that when you make an offer, you know that you are going to get that house as long as its accepted where are you operating we are in six markets, atlanta, charlotte, raleigh, dallas, fort worth and phoenix we are licensed in several more states as well those sound like hot markets to me. They are all secondary home markets where the pricing is a little bit easier to predict and there is a lot of people moving in, lots of millennials moving into those markets because they cant afford new york and san francisco. The prices are a bit more predictable. So we have a lot more confidence in how we can make all this work for you. Do you got any memorable stories of where youve done this and where its been a big success . I think its been a success in all our markets and i think they have in common increasingly its a diversified group of buyers from, you know, their 20s all the way to their 40s and 50s moving up into bigger homes usually because their family is growing or their kids need to go to a Different School and there is a lot of risk if it doesnt go well or the parent not being able to take that new job or having to drive an hour to get to it have you ever gotten burned we get burned sometimes and thats part of the risk that we take its part of the benefit that we provide the consumer is if it doesnt work out, then we ultimately take the loss and its sort of like for us we can spread it out over thousands of transactions, which for any one person would be devastating. But for us we can take a small loss every once in a while thanks for coming in. Up next on the money, the safety net of Life Insurance how much do you need and how much does that insurance cost . And later the young Family Planning to retire by 40 what weve got the documentary that they made about it we will be right back. Try Vicks Vapocool drops. Its not candy, its powerful relief. Ahhhhhh vaporize sore throat pain with Vicks Vapocool drops. Sfx upbeat music a lot of clothes you normally take to the cleaners arent dirty dirty. They just need a quick refresh. Try new febreze clothing quick dry mist. It eliminates odors and refreshes lightlyworn clothing. Breathe happy febreze. La la la la la. I dont have to worry about that, do i . Harmful bacteria lurk just below the gum line. Crest gum detoxify, voted product of the year. It works below the gum line to neutralize harmful plaque bacteria and help reverse early gum damage. Gum detoxify, from crest. Life insurance is confusing to lots of people. Some people think its unnecessary, especially when money is tight but it can be a worthwhile expense even if youre young and single Sharon Epperson joins me to explain. If im young and single, whom i trying to take care of well, thats what a lot of people think they think i dont own a home, i dont have any kids. But do you have Student Loan Debt that your parent cosigned with you if you have a private student loan there is a good chance that that will not be discharged if anything happens to you. So that parent will be stuck with it. Did you take out a Small Business loan . And if someone cosigned with you on that. Or even if they didnt, that loan still has to be repaid even if it takes your entire estate do you financially support your parents or one of your relatives . If theres anyone that depends on you financially you need to consider having Life Insurance a lot of people think having Life Insurance is too expensive, especially if im young i dont want to pay for any of this stuff. What should they be thinking about when it comes to the cost . One of the first things to think about is a term Life Insurance policy that covers you for a specific term, 20, 30 years and then it covers the time that you need to pay off that mortgage or for your kids to get out of the house. Thats a cheaper type of Life Insurance that you can get looking at a website which lets you look at various types of plans and what the costs could be, a 30yearold nonsmoker Healthy Woman could get a policy for 15 a month. Okay. Thats a great price people need to understand at the end of the term if youre not dead all the money goes away you never know whats going to happen. Worstcase scenario, catastrophe. Exactly and if something happens and nothing happens and that policy goes away, you could possibly renew it you could get another type of policy its going to cost you more though because the younger you are when you get this policy, the cheaper its going to be whats the best way to buy . What should i be looking out for in terms of any red flags . You want to do as Much Research as possible there are a lot of websites that will let you look at various quotes and even let you sign up for policies online. There are many out there to just check out. But what you want to be careful is about the rating. You want to make sure that that is going to be around for a long time so make sure you look at the ratings. Make sure you look at the firms track record that its been an insurer thats been in business for a while. So you know they know what they are doing. But also look for a complaint. Everythings not smooth sailing. There may be some complaints against this Company Check those out too to see if its an insurer that you want to be working with. And if you want to talk to a real person, talk to an independent Insurance Agent to find out whether or not this is the right kind of plan for you based on where you are in your life probably worth reading the fine print no one wants to talk about this its not a conversation thats easy or fun to have. But its an important one. You may not be able to control what happens with your investments in other ways. This is one way that you can protect what you have and protect your loved ones so they dont have to pay for whatever you have afterwards. You are the best at this bringing the stuff we dont want to talk about but the stuff that we need. The steps one couple took to retire early their journey started with a major life change. I just quit my job. Ooh, that was really hard but that plug quickly faded. Upbeat music luckily theres febreze plug. It cleans away odors and freshens for 1200 hours. [deep inhale] breathe happy with febreze plug. You may have heard of the f. I. R. E. Movement. That acronym stands for Financial Independence retire early. With that goal in mind, scott and taylor decided to radically change their lifestyle they turned their journey into a documentary called playing with fire. I am fascinated by this movement because its so daring, its so risktaking. You live near the ocean in san diego. You had a great house, great cars, baby daughter that you just had what made you think im going to give this up my husband scott did a great job of approaching me in the right way. Lets say that he kind of aligned it to whats really making you happy versus, hey, lets change our whole life that wasnt the conversation it was more whats making you happy . Lets take a harder look at that so, scott, what was it about the Fire Movement that most appealed to you, and how did you go about setting that in motion . We had a lot of stress around money. Thats something that the majority of this country deals with and i thought why dont i go and increase my income and that was stressing me out. I already had a fulltime job. How am i going to make this work and it was through research of trying to find that milliondollar idea that i found the Fire Movement. It was this idea that you should focus on optimizing for happiness and you should be taking way better care of the money that you have right now. And that felt like something i could do right then and there without having to come up with that milliondollar idea when taylor said yes, did that take the weight of the world off your shoulders taylor said yes over the course of many months. [ laughter ] i dont remember maybe, yes, maybe i was pretty forceful about this i think but it really was about focusing on happiness so that was something neither of us could really argue with and but we took it to an extreme. And i am glad we did because by taking it as far as we could, we knew how far we wanted to push it and like what was making us unhappy because you can go too far. Just to be clear, you two are not retired right now. You are both working right now is that correct . Thats correct. Tell me about your path tell me what made you decide to do this. During the year that we filmed the documentary we really played with 20 , 50 , 70 of savings rate and we landed on about 50 savings rate 50 of the money you make right now you put it straight into savings yes thats a lot. It is a lot we could do 70 but we know that for our happiness 50 is good. So we think six to seven years as far as being financially independent. What will be the thing that says we can absolutely do this or absolutely not. Is there a number . Yeah. I think its a flexible framework this whole f. I. R. E. Thing. We have a number based on just math as far as once we have that number we know that we can sustainably live off of the proceeds of those investments. For us though this isnt about work forever this is about having the flexibility and the freedom to make the decisions that we want to make. What do you miss most about your old life . I miss the ocean. I do miss the ocean a little bit. But i have to say that its been more intentional living lately and i think that that doesnt cause deprivation. And so i dont really feel like i miss something from my old life because the things that i truly valued i still do all those things i still get to have coffee with scott. I still go for bike rides, albeit in a different location, but i get to bike ride and walk and read to my baby. How much time do you get to spend with your daughter so much more. Our realignment has created so much more time for the things that we value. I want to thank you both for coming in. Check in with us let us know how that plan is going in the next six years. We will that is the show for today im becky quick. Thank you so much for joining us next week its time to start planning your Holiday Travel when is the best time to get the best fares well figure it out for you. Each week keep it right here on the money. Have a great week and we will see you next weeend. See you next weeend. E you dont because you didnt its understanding why that. Will get him a body like that. Move . That. Your job isnt doing hard work. Here. Its making her do hard work. And getting paid for it. vo snap and sort your expenses to save over 4,600 at tax time. danny jody. Its time to get yours vo quickbooks. Backing you. Friday options action fans im Tyler Mathisen in tonight for melissa lee. We have a big show on deck here is whats coming up. Announcer on the big show tonight. Health care. Carter worth explains why the sector previously left for dead should get your heart racing right now. Then. You dont like flying huh. Karen finerman has a way to use big ups and downs in one airline name to your advantage and. When i say who is out you all