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- [00:00]
A
Hey, podcast family, you have to know we are known kind of on the YouTube world as the react channel. That's right. Yep, the money guy show. But we don't want you to miss out on any of the fun. So we have something special for you today.
- [00:13]
B
We are so excited. We are gonna actually release for you the same audio that we do on our react videos. Now if you've not checked out the react videos, go to YouTube.com moneyguyshow and check them out. But if you just wanna know what we're getting into from the audio side, make sure you listen up.
- [00:29]
A
This going to be fun. I took out two loans to get here today.
- [00:38]
B
I don't even have money for a hotel. Give him a big hand, guys.
- [00:41]
A
Give him a big hand. Hey, hey, hey, money guy family. We got more reacts. Let's see what the team's put together.
- [00:52]
B
Brian, I am so excited. I love seeing what the Internet has out there that we get to react to. So with that, let's dive right in. I know I just got a Tacoma.
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A
But I figured out a way to skip three months.
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B
This is you.
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A
It says updated payment information. Skip up to three payments. The letter, it basically says that I can refinance my loan somehow, which means buying it again. I don't know. Now Instead of having 22%, they are offering me. Oh, gosh, now, I don't know, my stomach hurts. National averages or anything like that, But I think 18% should be good. No, that's the interest he pays on $77,000.
- [01:26]
B
He said my credit card is 30.
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A
Sound system in the Toyota. For some reason the speakers suck. There's no low end. You can't afford it.
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B
I can refinance this loan and when I do that, I get to skip three payments. If I get to skip those three payments, then I can put a sound system in my Tacoma. And Brian, we know this, when it comes to cars, you got to have a good sound system in it, right? It's not even worth driving if you don't put a good sound system in it, right?
- [01:47]
A
I think my 16 year old self would agree with him because I was one of those people that had $2,000 of sound system in a $1,500 car. But it is, man. What in the world? You real? Three months, he's paying the 18% or 20% interest on that. Of course, they're trying to basically put straw and cover up this trap as much as possible because they want him to fall into it. That is free money for them and a trap for Him. Why would you turn compounding interest against.
- [02:15]
B
You when it comes to buying cars? We do not want you to skip payments. We want you to follow 23, 8, 20% down. Don't finance for any more than 36 months and you have to make sure your total payment does not exceed 8% of your monthly gross income. And yes, 18% on an auto loan counts as high interest debt. Put money in a 401k, put money in an IRA and you're like, yes, I don't hate it, this will be what I need for retirement. But no one's doing the math. And here's what the Math says. The 30 year average on the 401k, the 30 year average in Ira, do you know roughly over 30 years it's 5%.
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A
Oh, give me a break.
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B
That's poop is because.
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A
Is it cash?
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B
$50,000. Write this number down. Take with the passage of time, take 50 grand and ask what happens to it in a 401k? Over 20 years it triples, it becomes $160,000.
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A
How about doubling that rate of return at $94,000?
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B
Match. Which means that at retirement you've saved two years worth of money. So after you have cut your expenses in half, you can maybe go four years before it's all dried up. It's poop again. We think that it's a risk free event, but it's the greatest risk of all because we know how the story ends for 99.9% of people. Chris, I'm a very agreeable person, but where on earth do you get your information from? The average return in a 401k is 5%. Okay, maybe if you're following like the Dalbar study to see what the average investor does. But if you just go into your 401k and you just buy a low cost index fund, we know that over the past, what, 5060, 70 years, the S&P 500 is annualized something like 11% per year. So the fact that you're saying that 401ks are a lot, it's just, it's just made up. That's not the way that it actually works.
- [03:56]
A
I got one better. How about if you have an employer that's a dollar for dollar match, how about a guaranteed 100% rate of return? Kris, that's, that's false. You can tell Kris is selling some other product, investing your 401k. There's a reason in our financial order of operations it's step number two, because nobody's giving you 50 to 100% guaranteed rate of return. It's all because your employer is being incentivized by our government to go ahead and pay it forward, get you a retirement. Take advantage of that.
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B
19 year old millionaire made $8,000 in two hours. The chart is moving.
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A
Look at the chart.
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B
We just kind of.
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A
Oh, just following the chart.
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B
Oh my God. It's still ripping. Still ripping.
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A
While he's eating. Whizzy. Eating a burrito, baby. Oh, look, 8.6 KO.
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B
That's literally almost $9,000, guys.
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A
I'm literally making that right now.
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B
My position's up 54%. And I bought this two hours ago.
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A
In just two hours. And I've had crazier ones where they.
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B
Go up 500% in 30 minutes.
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A
Yeah, because it always goes up. Trees grow to heaven.
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B
The way that it works. If this is what you believe investing is, and you're. I am so sorry to tell you that you've been horribly misinformed. Investing is not something where you pull out your phone and you're watching the ticker and it's going up 500% in 30 minutes. That's just not the way that it works. What I would love to do is I'd love to go see this kid's portfolio. I'd love to see it over the last 12, 18, 24, 36 months and see realistically, how much money has this guy actually made investing. And I bet it's not what he's putting on the highlight reel.
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A
Look, you can get lucky and hit a lick just like at a casino. I mean, you can totally get lucky, but this is not actually what investing is. Investing is actually where you're buying a portion of the economy, buy an index fund and be a part of all this innovation, all the cool stuff that's going on around us. This is speculating, this is gambling. I even question, is he really 19, 18, 19 year old millionaire or did he rent somebody's car or drive somebody's car and then he's eating his burrito and creating social media content. I took out two loans to get here today.
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B
I don't even have money for a hotel. Give him a big hand, guys.
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A
Give him a big.
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B
You need to pick up a check. I would tell you before today is.
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A
Over, you should get somebody to give you 500 bucks. Who's that?
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B
Grant. Give him 500 bucks.
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A
I bet Grant is. Grant. Go give him 500. So somebody asked, what, what do I do? Hold on, hold on, hold on. Bro, bro.
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B
Do not talk through the clothes. People. Just hit.
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A
It'S like conference panhandling. Oh, wow.
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B
What are we learning here?
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A
And I just gave him the most.
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B
Valuable thing in the world, dude. Attention.
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A
You know what? Grant could take that on the road. Go to your. You could hire Grant for your wedding. And you know how you do those dances where you. You give money at a dance. Grant could be out there with the dj, kind of hyping the audience, getting more money for. For the broad and go.
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B
Or like, instead of, you know, you get in the air tunnel where all the cash. I don't. I don't even know what. I don't know what the point of that video was. You need to get someone to give you $500 check.
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A
That's the power of peer pressure, is what that is. Is because Grant's at one of his conferences and he primes the pump. Somebody gives, and they're like, well, I'll give him five bucks. I get to stand up, and Grant's going to notice me. I'll give another five bucks. So you can't duplicate this.
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B
That's what I was gonna say.
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A
When you hear about people who supposedly do remember, I'm old. So the envelope thing where you send a chain letter and you tell everybody, give you, like, a dollar, and you're supposed to go get a million dollars by getting all these people dollar.
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B
It never worked.
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A
It doesn't work.
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B
It never worked. The biggest mistake young entrepreneurs make is having a family to go back to at the end.
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A
What? It's.
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B
It's just a waste of time. I run a company with 6,000 employees, and over the past three years.
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A
Wait a minute. Okay.
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B
I'm catching on in family psychology. And weaponized it into subconsciously coercing each and every one of my employees into divorcing their significant other.
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A
When I saw, at some point, performance.
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B
I had to take IT Global. In 2019, the divorce rate was 40%. Now it's 50.
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A
I've been hard at work.
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B
I am sad if people think that that's what actual entrepreneurship looks like and what being the boss looks like. Because I think if you work for a company that is fostering that sort of environment, they are doing it wrong. And there is some truth in there. Some people do get lost in their careers, and they get lost pursuing something that what they're going to find when they actually get it, if they're pursuing wealth or money or status or prestige, when you get there, you're gonna find that it's pretty empty. So if you can enjoy the journey but recognize there are things that matter more than money. And money is nothing more than a tool that allows you to focus on the things that you really care about. I think you're gonna find that it's a much more enjoyable journey and the destination, the finish line becomes much more fulfilling.
- [08:47]
A
I do wanna be clear. I don't want anybody to be misled. Doing big things in life will require sacrifice to some degree because if it was easy, everybody would do it. But I would tell you, I think a lot of times it can be done in much more incremental, digestible small decisions that stacked on top of each other. That also will allow you, if you do it right, you should have a vision of where you want to be. And so that way the parts that may be unhealthy in the beginning, like when you are starting a new venture and you're having to work extra hours because nobody believes but you believe. But then at some point you got to know where success lies and what the why is. So you come off the exit ramp of that and actually control and own your time.
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B
That's right.
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A
That it's all worth it. But if you go into. I know he was trying to be funny with that but throwing out real stats about the increase of divorce rates. But it's all back to the point of are you purposeful with how you use your most valuable resource, which is your time? How much did you pay for the first rental?
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B
I paid $100,000. And what is the rehab cost for that? How old is it and what's the ARV for that?
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A
$220,000. Wow.
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B
OK. Cash flow are you getting from that one first rental property?
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A
700 to 800amonth.
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B
Where did you get the money to.
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A
Buy your first rental? I used private money. Where did you get the private money lending from my parents, which gave me 10% interest rates.
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B
You have done how many transactions so far?
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A
I've done five. Tell me about the transaction. I have done one wholesale. This is a great estate planning technique here. Just put everything in kids names. Four rental properties. What does your mom and dad do for a living? They are both real estate investors. What is one tip that your major? I could save you a lot of time on this video. Investing is one of the best things you could do because all of the leverage you could use and all the passive income that you could get. The reason that he can do this at such a young age is that he's got this huge safety net sitting underneath him called very successful parents who.
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B
Are also in the same industry.
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A
Most of us. The reason you can't dabble with leverage until you get to step eight of the financial order of operations is because it is chainsaw dangerous. It is one of those things. If you don't understand the temptation but also the dangers of leverage, you're doing it wrong. He's got this safety net that takes out all the risk that allows him to do it way ahead of schedule. That's not a planning technique. That's just he's fortunate that he's in a successful family.
- [11:12]
B
You know, this is a great reminder that oftentimes when we see other people's financial success, we don't have the full story and context matters. You may have heard about this 12 year old kid who has this rental portfolio and is making all this money. That sounds amazing. Until you find out that the parents are the ones that loaned him the money. The parents are the ones that are sourcing the deals. The parents are the ones that are helping him do it. Is it really his business or the parents business? The context matters. So when you see a neighbor or a friend or someone else in your financial life and you say, man, how did they do that? Or how are they? You don't know the rest of the story. You don't know the other behind the scenes things that are happening fortunately or unfortunately. Most times building wealth is a slow and steady game. You're not supposed to have hundreds of thousands of dollars at 12 or 13 years old.
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A
Look, I believe that villains and victims don't win. You have to be the hero of your own story. But I tell you, as two guys coming from humble beginnings, don't watch this and just assume it's only the wealthy kids that get the opportunity. Go learn the skill sets. Learn those small decisions you can make that can build your great big beautiful tomorrow and actually start the process. That's the thing. If you look at the stats that 80% plus of millionaires are typically first generation, there's still lots of opportunity out there for you. Don't let content like this scare you thinking it's only something that the silver spoon kids get. You can do this too. We've done it. And we try to share that when we do Money Guy content.
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B
This is the start of a brand.
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A
New series where I spend 30 minutes a day teaching my incredible daughters the skill of day trading. Oh, goodness gracious. We've done something with her before. Profitable and taking profitability. How to teach your kids to gamble money. Yeah. Let's go.
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B
Okay. This has to be. This is far. Like it's not legit. I need to know, is this true? Is this really what you're doing?
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A
It is social media clickbait. It has to be.
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B
Here's what I think is wonderful. If this mom was saying, hey, you know what? I'm going to teach my kids at a very early age about investing and about deferred gratification and about compound interest and about investing in other companies and about stock ownership. I think that those things are wonderful. And man, what a head start these kids are going to have. But if she's legitimately trying to teach them how to day trade, you might. Well, I'm not. There's a lot of other horrible things you could teach them as well that I would not think are going to serve them well later in life. It's got to be a joke, right? She's joking. It's farce. It's silly.
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A
This is the next evolution. You know, every high school in America has this like stock picking contest they do in high school. And they even have like, I know in the state of Georgia where we're both from, they even have like this big dinner where you celebrate on the st State level for all the winners from high school. She just amplified this level. Look, real investing, instead of trying to pick the winners and losers by buying individual stocks or day trading, just buy into the economy. This whole pot is growing through innovation, through technology and all kind of awesome stuff. You don't have to be lucky to be successful. Be careful with this money affirmation because it actually really works. I always have more money than I need. I cannot help but to attract a lot of money. I am a lender and not a borrower. I am a money magnet. And money is always attracted to me at all times. Money is my birthright. Repeat this three times a day for the next seven days and then come back here and let me know the result.
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B
I am a money magnet. I don't know that that's gonna work. Now, look, I love. I'm all for positive self talking. We know that the majority of folks out there classify themselves as pessimists. And yet when we do our survey of millionaires every year, we find that they classify themselves as optimists. But being optimistic and chanting a money mantra, saying that I'm a money magnet are not the exact same thing.
- [15:07]
A
Look, it's not magic. What creates success is when you start believing on what you can do and what these small decisions are and how they stack up. And then if you actually start taking the action, it is amazing when the subconscious connects with your physical acts and actually starts making things happen. But it's not a mantra. It's not these magical words. It's you actually taking action, taking those small steps of action, also starting to believe it, and then waking up that invisible hand inside your brain that's even working while you're asleep. That's where optimism and success lies. Not in some mystical thing that you chant to yourself from time to time. I like positive self speak. Controlling that inner voice is definitely a powerful thing. But don't fall prey to somebody who's telling you this. Saying it in these specific nine or ten words is going to do it for you. I think that's a trap and that's not actually helping you get better.
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B
Hey, if you want to be a money magnet, make sure you go to moneyguy.com resources. Check out all the free resources we have out there that can help you do money better.
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A
Yeah, I love it. Because money is only a tool and we want you to live your best life in abundance. I'm your Host, Brian Preston. Mr. Bo Hanson. MoneyGuy Team out the MoneyGuy show is.
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B
Hosted by Brian Preston.
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A
Abound Wealth Management is a registered investment.
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B
Advisory firm regulated by the securities and Exchange Commission.
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A
In accordance and compliance with the securities laws and regulations, Abound Wealth Management does.
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B
Not render or offer to render personalized.
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A
Investment or tax advice through the Money Guy Show. The information provided is for informational purposes.
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B
Only and does not constitute financial, tax, investment or legal advice.