Fast food spots like Wendy’s experiencing a slowdown in business, Home Affordability hits a 50-year low, Robinhood looks more like gambling than investing, Employer Coverage vs. Medicare & More

Fast food restaurants like Wendy’s are experiencing a slowdown in business

The fast-food restaurant Wendy’s is planning on closing hundreds of locations throughout next year because they continue to see a slowdown in spending from their customers. They said most of their low-income consumers are cutting spending and making fewer trips with smaller purchases at the restaurants. Wendy’s increased prices after the pandemic at a higher rate than grocery stores and now other fast-food restaurants have begun to add value menus to keep customers coming back, but Wendy’s has held firm and not created any values for their customers.

Because of this they have seen their net income decline to $44.3 million from a year ago when it was $50.2 million. Over the past year the stock has declined from around $18 a share down to under $9 a share, which is a decline of 53%. With the reduction in the stock price, the dividend yield is now 6.5% and the company trades at 10 times earnings on a forward basis. This company may be worth looking into as an investment as within in the next 6 to 12 months we could see lower end consumers stabilize.

The affordability index for people buying a home is the worst in 50 years

People may be excited about buying a home because mortgage rates are around the lowest they’ve been in over a year, but the affordability of a home is still far out of reach for many. The reason for this, and we have talked about this for the last few years, is that the increase in the price of homes has far outpaced the increase in people’s income. The 50-year average for a price-to-income ratio is around four times, and it reached a low in 1999 of around 3.6 times. But with the rapid increase of homes over the last few years, the price to income ratio has climbed to slightly over five times. Also not helping are the increases in home insurance costs and property taxes. Back in the summer of 2019, when looking at households earning $75,000, nearly 50% of those people could afford to buy a home. Today, when looking at those same households earning $75,000, only 21% would be able to afford a home. Back in 2012, the home affordability index was over 200, but it has now been cut in half to just about 100 with no signs of improving any time soon. I believe it will probably take 3 to 5 years to correct itself. If you look back in history, the affordability index does not change overnight. What will happen is probably incomes will increase slightly over the next 3 to 5 years and maybe the price of homes will either stay the same or decline slightly, which would increase the affordability index. What this means for people buying a home today is you should not have any aspirations of a rapid increase in the value of your home. What caused the problem was during the pandemic mortgage rates dropped to lows not seen in 50 years and that pushed up demand and the prices for homes climbed at a rapid rate. I believe this scenario is extremely unlikely to play out again!

The brokerage firm Robinhood looks more like a gambling platform than a brokerage firm

Robinhood initially went public at $38 a share in 2023 and the stock then fell to under $10 a share. It has recovered nicely since then as it’s now trading around $110 a share. What has caused this shift and the huge increase in the stock price? One big reason is that the company has really allowed major speculation for their investors. Starting off with crypto, they have allowed people to buy coins like BONK, Dogwifhat and Pudgy Penguins. Just when you think there’s no way they could come up with anything more speculative, surprise; they have come up with an investment known as prediction markets and event trading. Somehow the regulators have let this slide or maybe since government agencies don’t move that quickly, it just has not been addressed yet. It appears for investors on their app that you can predict what the outcome will be of a football game, politics, contracts over economics, even if aliens will exist on earth this year. Chief Brokerage Officer, Steve Quirk, says this is the fastest growing business we have ever had. Robinhood stock trades over 50 times projected earnings and is looking for about $4.5 billion in revenue, which is an increase of 53% over last year. The growth appears to be there for the company, but there is so much speculation and insane crazy things there is no doubt in my mind that in the future many people will lose more money than they ever thought was possible by speculating on crazy things rather than investing into good quality businesses. A fallout in those risky "investments" could hurt Robinhood's reputation, which I believe would be bad for long term growth. 

Financial Planning: The Real Cost of Employer Coverage vs. Medicare

When reaching age 65, sometimes there is the option to join Medicare or stay with an employer health insurance plan. This is most common when a spouse retires after age 65 and they have the ability to join their spouse’s work plan. When comparing the cost of coverage, there is a key difference in how each affects your tax bill. Premiums paid through payroll for employer-sponsored health insurance are pre-tax, meaning you avoid federal, state, and payroll taxes such as the 6.2% Social Security, 1.45% Medicare, and 1.2% CA SDI tax in California. This is different from a 401(k) for example where contributions are only pre-tax from federal and state taxes. For someone in the 22% tax bracket, a $500 premium would be around $300 after the tax savings. Medicare premiums on the other hand are paid with after-tax dollars and are only tax-deductible for people who itemize and have total medical expenses exceeding 7.5% of AGI, which means very few retirees actually receive any tax benefit. Additionally, Medicare Part B and D premiums may be elevated due to higher levels of income because of IRMAA. Employer health insurance can vary in coverage and cost so at times Medicare may be a more comprehensive and cost-effective option, but it is necessary to compare the after-tax costs to be sure.

What to do before the spouse who manages the investments passes away

In most relationships either the husband or the wife takes on the primary role of managing the financial affairs, including the investments. Not always but most of the time the husband is the one who takes on the primary role of investing the couple's assets when they are seniors. The problem with this is that women generally live longer than men, and it’s very possible that when he passes away the wife is clueless on what to do with the investments and she could be open to scams or just bad investment advice. This does not mean that one spouse is smarter when it comes to investing; it just many times is due to one spouse having no interest in understanding investing or wanting to spend the time to learn about it. If someone has no interest in learning investing, they will not do it. I know some people like to manage their assets and their investments themselves, but this can be very difficult for the surviving spouse who is left with a spreadsheet and account statements, and they have no idea what to do. The best thing to do is when both spouses are alive is to find a financial advisor they trust and found together so that the spouse with less interest in investing knows that the spouse that knew investing felt good trusting this advisor. It may be hard for the primary spouse to give up control of investing, so I don’t recommend to give the advisor 100% of the assets, but at least a third to a half of the assets to get a good feeling of what that advisor will do when that spouse passes away. Don’t wait a few months before you die to find the advisor, it should be done when you’re both doing well and also have an experience with that advisor for at least 3 to 5 years. Since no one knows when they’ll pass away, it is better to do it early rather than to wait until it’s too late! 

Do you know who the beneficiary is of your retirement accounts?

I’m sure many people say yes of course I do, but unfortunately, things change in life and the beneficiaries you have may not be the ones that you want. You could have also deleted the beneficiaries with the intent to change to new ones at a future date but forgot to do so. If you have parents that are still living, it’s important to remind them as well to check to verify that the beneficiaries on the retirement accounts are the ones that they want to receive the retirement funds. Whether the funds are in a workplace retirement plan like 401(k) or an IRA, you could be giving a lot of money to people you did not intend to. Some important reminders when it comes to beneficiaries, be sure to list both primary beneficiaries and contingent beneficiaries. This can be very helpful if your primary beneficiary passes away, and you forgot to update your beneficiaries. If you list multiple beneficiaries, be sure to make it clear what percent each beneficiary receives of your retirement account. It is also generally a mistake to list your estate as a beneficiary because your heirs could lose the benefit of deferring taxes over a 10-year period and could instead have a large tax bill all at once. Another tip is to be sure if you or someone you know gets divorced that they update their beneficiaries. You probably would not want your ex-spouse to receive your retirement account. With the holidays coming up, it’s probably a good time to verify your beneficiaries to make sure the people you have listed are the ones who deserve your hard earned money when you pass.

Check your coins, they could be worth a lot more than you think!

With the price of silver now averaging around $50 per ounce, there are quarters and dimes that you may have that could be worth far more than the currency value. For example, if you have a quarter that was minted in 1964 or prior, the silver is worth about eight dollars. While a dime is only worth $.10 when you spend it, if it’s the same year or older as that quarter from 1964; it is worth roughly 35 times that amount or around $3.50. 1965 was an important year for coins because that’s the year when the coinage act ended the use of silver in dimes and quarters. Half dollars also saw the percent of silver in the coin drop from 90% down to 40%. If you do find some of these coins that could be valuable, don’t run to your local pawnshop or jeweler to cash in on the silver price. You’re far better off going to a coin dealer because there could be more value in the rarity of the coin than even the silver value. Due to the increased use of silver in electronics, medicine, solar cells, water purification, and other high-tech needs consumption is now double what silver production is on a yearly basis. What this means is the demand is real. It’s not like when the Hunt brothers back tried to corner the market on silver in the early 80s and it rose to $50 an ounce before regulators stepped in as demand now comes from real use cases. If you factor in inflation since the 80s, silver would have to exceed $200 an ounce today to be the equivalent of $50 an ounce back then. And people wonder why we prefer investing in businesses over commodities over the long-term. I believe public companies will far outperform the price of gold and silver in the long run.

The chicken wars have become intense, and Colonel Sanders is losing

Colonel Sanders, who I think everybody knows, is the star behind Kentucky Fried Chicken or better known as KFC. A little history lesson goes back to the 1930s when Harlan Sanders was serving his chicken in Corbin, Kentucky. The famous red and white buckets that hold 14 pieces of chicken came out in 1957. For many years this was an easy dinner for an American household. I’m sure many baby boomers don’t forget the joy of seeing that sturdy red bucket of chicken brought home by mom or dad when they were a kid. But now competition is tough in the chicken space with companies like Chick-fil-A, Dave’s Hot Chicken and newer to the scene Raising Cane’s. KFC, which is owned by Yum Brands, has experienced six straight quarters of same store sale declines and is now in fourth place in chicken restaurant sales and Wingstop could take fourth place next year. The reason for the change is that Americans now seem to not enjoy eating chicken off a bone and prefer nuggets and eating their chicken in a sandwich. A market research firm says people’s eating habits have changed tremendously and nowadays 26% of consumers eat their fast-food orders in their car. I also think they eat while they are driving, which I have seen unfortunately on the freeway. US fast food restaurants have seen menu listings for bone and fried chicken meals drop 72% in the past four years, but the Colonel is not taking this standing down as KFC has brought back its original honey barbecue sandwich which came out in the late 90s and is now at a discounted price of $3.99. KFC went head-to-head with Chick-fil-A saying our sandwich is bigger than yours and you can get ours on Sundays. For those who don’t know, Chick-fil-A is not open on Sundays. I don’t think we will see a big return of the 14-piece bucket of chicken, but I do think we’ll see a heated war for your dollars when buying chicken and the consumer should benefit.

Has big government gone soft on big corporations?

On Wednesday, I saw a headline that read “Meta wins FTC suit alleging it is a monopoly”. Andrew Ferguson, the FTC chairman, took on the case and took it trial. He said he was confident his agency would win, and the FTC stated, even though Meta doesn’t charge for the service or raise their prices, it could extract more money from its user's personal data by serving them with targeted ads. The judge ruled against the FTC and said it was easy to ignore those ads. The FTC was also going after Meta saying it had a campaign to buy upstart rivals rather than to compete with them. The judge ruled that Meta was shifting its emphasis because of competition. After Google won their recent case in court, which also benefited Apple, it seems to me that the courts are going easy on big business. 

November 14th was a big day, and no one noticed

November 14th, 2025, was the day that Cisco reached $78 a share. Why is this a big day? 25 years ago, was the last time Cisco was at $78 a share during the tech boom. At that time in the newspapers and the media there were warnings like there are now about the exorbitant valuations of tech companies, but many investors chose not to listen. Looking back, the well-respected Barons magazine, which has been around for over 100 years with its first publication in 1921, was attacked for questioning the value of such a great company. At the time the cover story explained that the valuation stood at 130 times estimated earnings. Barons turned out to be right as by October 2002, the stock traded under $10 a share. So, congratulations to Cisco for reaching its all-time high of $78 a share, but investors should take note that there are many articles coming out these days about valuations of AI companies. Maybe some of them will not reach these highs again until the year 2050.