Bo Hanson (1:06)

Here's the thing. Sometimes when it comes to making financial decisions, tough love is what's required. A lot of people are somewhat naive to how negative or how bad their financial situation is. And so it's about understanding where that line is. You know, I don't think. I don't think Dave's quite that bad.

Brian Preston (1:26)

I thought there was vampire teeth. I mean, I know that's a goatee because I watched the skit now, but they looked like vampire teeth.

Caller with credit card debt (1:31)

Let's break down my credit card debt together so that I can help you feel better about your finances. So first off, I have my Shields credit card. This is the one that we're currently working on paying off, and it is sitting at $2,874.

Brian Preston (1:47)

It's like a sporting goods store.

Caller with credit card debt (1:48)

So that is my Discover card, and that is sitting at $4,844. Next, after that is my Chase Disney card, and this is sitting at $5,593. After that, I have my star card, which is sitting at $7,628. And after that is my husband's star card, because, yes, we both have one, and his is sitting at 8,000.

Brian Preston (2:14)

Goodness gracious.

Caller with credit card debt (2:16)

Then we have my Visa platinum card sitting at $11,283. And then we have my cash rewards card, which is sitting at $19,725. 8,000, 11,000, 19,000.

Dave Ramsey (impersonator) (2:36)

You are broke, Susan.

Caller with credit card debt (2:38)

And then we have my highest card. That's my American Express, and It's sitting at $24,987. When you add all of these together, that's a total of $84,962 in credit card debt alone. This does not include student loans. This does not include car loans.

Brian Preston (3:00)

How did she get here? Well, I mean, at some point, three months, five months, six months, year into it, you're like, maybe I should turn back and go the other way.

Bo Hanson (3:09)

$85,000 of credit card debt is a huge hole to try to get out of. And that's going to likely take years upon years upon years of paying for past consumption. She and her husband have a long road ahead of them if they don't want to continue spiraling into a very, very dark place.

Person discussing apartment financing (3:30)

Here's how. I only pay $400 a month for rent in Los Angeles. Klarna has just rolled out apartment financing. Instead of my rent being $1,600 a month for one year, it's going to be $400 a month for four years, all with 0% Apple. You might be thinking 0% Chase. This isn't smart. It's called investing in yourself. Because I know in four years time I will have a bigger portfolio, more money in my account. This system will allow me to enjoy my 20s more. Have fun now, worry later.

Bo Hanson (4:01)

Well, obviously this is tongue in cheek, but so many people do this. I can afford anything in the world. If I just stretch out the payments long enough, I can get the monthly nut down as small as possible, then automatically becomes affordable. Obviously, that's not the way we should be navigating our financial.

Brian Preston (4:17)

I love how you just said if you can stretch it out as he's doing ab stretches. Yeah, yeah, yeah. With the thing. I commend you for the commitment to the game.

Susan (4:26)

I'm 18 years old. This is my first time paying taxes. I really don't know what I'm doing. Can you tell me how much I owe and I'll just pay it? No, we can't do that. You have to figure out that amount for yourself. Oh, okay. Well, if I'm just a little bit off in the amount I owe, it'll be okay because it's my first time, right? Oh, no, we already know how much you owe exactly. I mean, down to the penny. But you still have to figure that out for yourself. Well, what if I get that amount wrong? You go to federal prison.

Bo Hanson (4:52)

What?

Brian Preston (4:52)

They are Waiting to see if you match it all up. And then it is kind of ridiculous when you, when you see it in that context.

Bo Hanson (4:58)

I, I, you know, we talk all the time about how we have a very complicated, very involved tax code. And tax avoidance is highly encouraged, but tax evasion is highly illegal. And unfortunately, I feel like sometimes the deck is stacked against you. They know what's supposed to show up on that tax return, and if you show them something that does not align, that does not match what they're expecting, you get that dreaded letter in the mail.

Brian Preston (5:24)

Now, I would say probably the context from the IRS is, is that, yes, we have a matching system. Yes, we have all the things that are required to be reported, but we don't always have all the context.

Bo Hanson (5:35)

That's right.

Brian Preston (5:36)

Think about, like, Schedule C for business owners. They know the revenue you've received, but they don't know all your expenses. There's a, there's quite a few things like that, investments, they typically don't know the cost basis they started to get where actually a lot of that stuff is reported now. But I'll give them the benefit of the doubt. But for skip purposes, that was hilarious. How much do you pay in taxes?

Person discussing stock market and Puerto Rico taxes (5:58)

Well, I live in Puerto rico, so only 4%. And then capital gains is zero.

Brian Preston (6:01)

So if you're a US citizen living.

Bo Hanson (6:03)

In another country, only pay income tax?

Person discussing stock market and Puerto Rico taxes (6:05)

No, you pay income tax, capital gains tax. The US Tax follows you anywhere that you go.

Brian Preston (6:09)

How come you're safe from that in Puerto Rico?

Person discussing stock market and Puerto Rico taxes (6:11)

Puerto Rico is the only exception.

Brian Preston (6:12)

Oh, really?

Person discussing stock market and Puerto Rico taxes (6:13)

It's the only exception for Americans? Yeah, it's pretty crazy.

Bo Hanson (6:15)

So there's some truth in there. There are very unique rules if you happen to live and do business out of Puerto Rico. But that's the case. You have to live and do business out of Puerto Rico. So often we see people coming up with these like, oh, what are some different ways that I can avoid taxes or take advantage of the 4% rate? And you have to make the determination, do I want to pretend like that's my reality and pretend like that's the truth, or do I want to actually make it a reality, actually move my family, my life situation, my business and all those things to Puerto Rico and operate out of there? So I'm doing it the legit way.

Brian Preston (6:46)

Raise your hand if you've ever looked at real estate in Puerto Rico. I've done it because especially it happens usually somewhere between March and April when I start to see, when I look at how much I'm paying in taxes, I've actually looked at real estate in Puerto Rico, but it's exactly what you just talked about. At the end of the day I'm like, well, I guess I'm just gonna write this.

Bo Hanson (7:04)

I sure do like now.

Ebay Sponsor Voice (7:06)

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Person discussing stock market and Puerto Rico taxes (7:35)

The stock market will never make you rich. You don't believe me? What I want you to do, go to a compound interest calculator and choose whatever interest rate you think the stock market's going to return you, let's say 8%. And then I want you to figure out how long will it take you to even have a million dollars, which is rich.

Bo Hanson (7:49)

What you talking about?

Person discussing stock market and Puerto Rico taxes (7:50)

Will probably take you at least 20 to 30 years. That is not a fast enough investment vehicle to actually retire young and to enjoy your life. Instead you need to do something like real estate or building your business or preferably both.

Brian Preston (8:02)

We love real estate ourselves. But the thing is is that if you're broke as a joke, don't get into real estate. Because you know the whole game with real estate, especially with levered debt. You have to convince people to pay you long enough so you can pay the debt. But what happens when the music stops and you don't have a tenant for a few days? Big bank takes from little pockets. I mean it is. They get the house, they get all the money you put down, they take all the payments and then they get depend upon if you did personal guarantees or whatever else you promised them, they get to take even more. What I hate about content like this is that somebody, especially a young person will watch this and think that hey, this guy knows what he's talking about. He's gonna cut a corner off and save me some time. You'll go down this rabbit hole and not only will it break you, but you will lose five to seven years of your compounding growth. Years that you' never get back. While you're a billionaire of time. Do something with it. There's nothing wrong. Slow and steady. Yeah. So it might take you nine to nine years to get to your first hundred thousand dollars. Yes. It might take you 20 years to get to that. You Know to get close to the seven figures. That doesn't mean that's not the right path. I mean it's all these guys that are the snake oil salesmen who are trying to tell you they figured out how to cut a corner off. Well, if they really had, they wouldn't be telling you about it. That's that. This stuff drives me crazy. I'm sure he has a system that he's going to sell you.

Car buyer (9:21)

I love a trd, but I don't know if that's going to happen. I saw you had a 2017 black TRD, but it was expensive. And you still owe money on your vehicle, right? Yeah, like 12,000. You have money to put down? Not really, no, I don't. I wasn't sure if you would take my car on trade in and I could use that as a down payment. Where's your car? Second record run in on the short row right here. A few moments later. What year did you say this was? 2014. Oh wow. Lots of room, dude. So what would my payments be looking like? What are you paying now? 300. It's gonna probably be more than that. I could 100 more. I could do 400 would be doable.

Brian Preston (9:57)

Don't, don't, don't, don't.

Bo Hanson (9:58)

Based on the payment, kind of tough for me.

Car buyer (10:00)

Well, I'll find out as soon as we get back.

Person discussing apartment financing (10:01)

Okay.

Car buyer (10:02)

He wants to be at 400. Said 450 would be a stretch, but I'll take it out there. They will need 500 bucks down somehow. We'll just give you a couple weeks to get it.

Bo Hanson (10:10)

Oh really?

Car buyer (10:11)

No payment for 45 days? 483amonth. We're gonna be pretty rough on me. They gave you a three thousand dollar discount. You say you can do four hundred fifty. I can let' fifty a month. Give me a.

Brian Preston (10:20)

This is like watching the sausage be made.

Bo Hanson (10:23)

This isn't like watching sausage being made. This is like watching a horror movie in a small town car dealership.

Ebay Sponsor Voice (10:29)

I would love a trd, but I.

Car buyer (10:31)

Don'T know if that's going to happen.

Bo Hanson (10:33)

One man only wanted a shiny new pickup truck.

Car buyer (10:35)

And you still owe money on your vehicle, right? Yeah, like 12,000.

Dave Ramsey (impersonator) (10:39)

Oh my gosh.

Car buyer (10:42)

Do you have any money to put down? Not really, no, I don't.

Bo Hanson (10:44)

Join us this summer.

Brian Preston (10:46)

No, no, no.

Bo Hanson (10:46)

Based on the payment, 450 would be.

Car buyer (10:48)

Kind of tough for me.

Bo Hanson (10:49)

Critics have said.

Brian Preston (10:50)

Is this a skit?

Car buyer (10:53)

Give me initial there.

Bo Hanson (10:56)

This is just a bad thing. Getting worse and worse and worse and worse. Had nothing for a Down payment was trading in a car that he still owed $12,000 and no idea if there was any equity in that car. And then he said, well, you know what? Okay, you tell me how much you can afford on a monthly basis and we'll see if we can fit that in. And you know what? If you can give us $500 today, we'll make it where you don't have to make any payment for 45. That is just enabling a bad decision to get worse and worse and worse and worse and worse. And unfortunately, I think that's how a lot of automobile purchases go in this.

Brian Preston (11:28)

But seriously, why was this published? Because if you work for the auto dealership, this doesn't make you look good. No, you actually are just exposing how rampant and how bad the problem is out there in the industry is that we have, the majority of people are rolling in negative equity on cars that rapidly depreciate. This is a disaster. Nobody cares what car you're driving. So don't. Especially if it's well, well tuned up well, running machine. I don't know why I can't talk today. I'm not smoothly operating today like that. But if you have a finely humming along car, that's not good either. If your car is finely tuned, what am I trying to say? You nailed it.

Bo Hanson (12:06)

It's fine, it's great.

Brian Preston (12:07)

If it's purring. If your car is purring and it's reliable, don't go run up a monthly car payment. Let's pay that car off and drive it for a few years. Paid off.

Bo Hanson (12:17)

And if you do, if you do have to buy a new car, we think there's a better way to do it. We want you to follow 20, 20% down. Don't finance for any more than 3 years or 36 months and your total car payment cannot exceed 8% of your monthly gross income. Brian, the Internet again did not fail. It's always wild to see all the different ways that people think you can go about building wealth, when in reality the true way to build wealth is pretty simple, pretty straightforward.

Brian Preston (12:44)

Yeah, we actually tell you how we built money, how we've seen our clients build money. This is the real way. Go to moneyguy.com resources, download as much of the free stuff you want, and I think you'll quickly see it creates success. And that's what allows us to work with clients all across the country. I'm your host, Brian, joined by Bo moneyguy team out.

Bo Hanson (13:05)

The moneyguy show is hosted by Bryan Preston and Bo Hanson. Brian and Beau are partners with Abound Wealth Management. Abound Wealth Management is a registered investment advisory firm regulated by the securities and Exchange Commission. In accordance and compliance with the securities laws and regulations, Abound Wealth Management does not render or offer to render personalized investment or tax advice through the Money Guy Show. The information provided is for informational purposes only, may not be suitable for all investors, and does not constitute financial, tax, investment or legal advice. All investments involve a degree of risk, including the risk of loss.