Money Guy Show: Financial Advisors React to Big Money Fails Host/Author: Brian Preston and Bo Hanson
Release Date: January 31, 2025

In this insightful episode of the Money Guy Show, hosts Brian Preston and Bo Hanson delve into the common financial missteps that can derail wealth-building efforts. Through engaging discussions and real-life examples, they highlight the dangers of speculative financial behaviors and emphasize disciplined investing strategies. Below is a detailed summary capturing the key points, discussions, insights, and conclusions from the episode.

1. Day Trading: The Emotional and Financial Rollercoaster

The episode opens with Brian Preston sharing a personal anecdote about his experiences as a full-time day trader. He candidly discusses the volatile nature of day trading and its impact on both his finances and emotional well-being.

Brian Preston [00:24]: "This is how much I made this week as a 20 year old full time day trader. Monday, in one day I lost $4,270. It's been worse."

Bo Hanson responds by underscoring the unsustainable nature of day trading for long-term wealth creation.

Bo Hanson [01:08]: "Building day trading and having huge wins and huge losses on a day to day basis is not how you build wealth over the long term. I would say that was indeed a big money fail."

2. Sports Betting: A Destructive Financial Habit

Brian transitions to his foray into sports betting, revealing the extent of his losses and the desperate measures he took to continue betting.

Brian Preston [01:31]: "I'm selling my car at CarMax so I can get some money and bet on tonight's Cowboys Bengals Monday Night Football game. I need some money. I lost thousands yesterday."

Bo Hanson criticizes this approach, highlighting the futility and risks associated with gambling as opposed to investing.

Bo Hanson [02:14]: "The sheer fact that he's having to go sell a car or get a title loan on a car to be able to do sports betting, it just breaks my heart."

3. Financing Luxury Vehicles: The Hidden Dangers

A significant portion of the discussion focuses on the pitfalls of financing high-end automobiles. Both hosts share alarming statistics and personal opinions on how such financial decisions can lead to substantial negative equity.

Brian Preston [04:37]: "I saw somebody has $200,000 of negative equity. Guys, what are we doing? Don't drive your wealth around. It's better to be rich than to just look rich."

Bo Hanson provides practical advice on purchasing vehicles, emphasizing the importance of cash purchases for luxury cars to avoid debt traps.

Bo Hanson [05:54]: "When you do buy an automobile, we think you should follow 23, 8, 20%. Don't finance for any more than three years, and you cannot have your car payment exceed 8% of your monthly gross income."

4. Speculative Investments: Penny Stocks and Meme Coins

The hosts critique speculative investment strategies, such as investing in penny stocks and meme coins, drawing parallels to gambling rather than sound investing.

Bo Hanson [07:01]: "This is not investing. This is spec. This is no different than Adrian Peterson sitting at a roulette table saying, hey, you know what I love? I love the Red 17."

Brian adds to the discussion by highlighting the high volatility and emotional stress associated with such investments, advocating for more stable and informed investment choices.

Brian Preston [13:55]: "Investing shouldn't have this much ups and downs and investing shouldn't take you on these rides where you could, yes, hit the boom. But there's a heck of a lot of bust out there."

5. Discipline in Wealth Building: Living Below Your Means

A recurring theme is the importance of financial discipline. Brian emphasizes living on less than one's income and avoiding the trap of leveraging for consumption.

Brian Preston [10:38]: "The key ingredient to wealth creation, the first ingredient, is discipline. That's the ability to live on less than you make."

Bo concurs, reinforcing that responsible spending and avoiding unnecessary debt are crucial for long-term financial health.

6. Common Money Mistakes: Financing Depreciable Assets

Both hosts share their own financial mistakes to illustrate the pitfalls of financing items that depreciate over time, such as solar panels, cars, and even furniture.

Brian Preston [09:26]: "What you spend on the solar panels. It's $36,000 on a. Yeah. Nothing down."

Bo Hanson [10:03]: "If you were borrowing 100% of whatever the value of that asset is, and that asset goes down in value over time, you are literally setting your financial future on fire."

7. Investing vs. Speculating: Building Sustainable Wealth

The episode culminates with a clear distinction between investing and speculating. The hosts advocate for disciplined, long-term investment strategies such as index funds over high-risk speculative ventures.

Bo Hanson [12:09]: "Peter Lynch, great mutual fund manager from yesteryear, always said, don't invest in something you don't understand."

Brian Preston [13:55]: "I'm going to do investing my way, where I take a little bit today to build my great big beautiful tomorrow by doing index funds and other things that are much more likely to tie into the success of the economy than just hoping this is the next big thing that's going to hit for me."

8. Final Insights: Empowering Better Financial Decisions

In wrapping up, the hosts reinforce their mission to educate listeners on making informed financial decisions. They highlight the resources available on their website and encourage disciplined, knowledgeable investing as the path to financial success.

Bo Hanson [13:55]: "Building wealth is surprisingly simple, but it's not incredibly easy. And there are tons of voices out there, tons of people out there trying to get you to make bad financial decisions."

Brian Preston [10:38]: "If you don't know any better, I want you to go check out moneyguy.com resources. We have our financial order of operations if you want to fast track."

Conclusion

This episode of the Money Guy Show serves as a cautionary tale against high-risk financial behaviors such as day trading, sports betting, and financing depreciating assets. Brian Preston and Bo Hanson provide valuable insights into the importance of disciplined investing, living below one's means, and avoiding speculative ventures that can jeopardize long-term financial stability. By sharing personal experiences and expert advice, the hosts empower listeners to make informed decisions that align with sustainable wealth-building goals.

For more resources and detailed financial strategies, visit moneyguy.com/resources.