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- [00:00]
A
You're listening to the Travis Makes Money podcast, presented by GoHighLevel.com for a free 30 day trial of the best all in one digital marketing software tool on the planet, just go to gohighlevel.com travis. What's going on, everybody? Welcome back to the Travis Makes Money podcast, where it's our mission to help you make more money. Today on the show, my producer searched far and wide on the Internet to figure out a clip that he wanted me to react to. So we're going to take a look and see what's going on.
- [00:28]
B
Yeah. This clip comes from your beloved Bradley, one of your BFFs in Las Vegas, right?
- [00:37]
A
Oh, totally. Yeah. We're homies.
- [00:39]
B
Homies all the time. Yeah. I wanted to share this clip and get your take on it. It has a ton of attention on it and I wanted to see what.
- [00:46]
C
You thought, go buy a range Rover for 130,000. I drive it for three or four years, it becomes worth 60,000. That is a depreciating item. If I would have taken that $130,000, invested it wisely at 10% interest, I would make $13,000 a year on that money. But the money would still be there and compound. But the $13,000 would afford the Range Rover. So instead of paying $130,000 for a Range Rover saying, hey, it's paid for free and clear, I could invest the $130,000, take the money that I'm making from the investment and get a Range Rover for free. Or better yet, pass on the Range Rover, keep driving the car, let the $13,000 stack up, and in 10 years, you got $300,000 doing the same.
- [01:33]
B
What do you think of this advice?
- [01:35]
A
Well, I'd love to read the comments because there's got to be a reason why it went viral. But I love the advice. I very much agree with you, but especially the second part of the advice, which is just don't buy the Range Rover. Just keep buying the car until it breaks and keep stacking cash in investing the cash. But, yeah, what he's saying is, ess, don't take all your cash to buy things that are going to depreciate. And never put any money in your pocket. Put the money into investments that are going to give you a return, and then you can play with money that's coming in from those investments, from the, from the cash flow that's coming in on the investments is you. That's, you know, play money. That's what you. That's what you buy toys with. You don't go buy a bunch of toys with all of your active income that could be out working for you and making you money while you sleep. Because just like you said, in few years from now it's going to be worth 40% of what you paid for that thing brand new. Whereas if you put it into real estate or you put it into the s and P500 or something like that, you don't have to be a savvy investor, you just put it into the S and P or something like that, it's going to return on average, I believe last a hundred years the S and p is around 10% a year on average. So you have to be a sophisticated or savvy investor to be able to do the math on that and know that I'm probably going to be able to make this payment by just the money that I make on the stacking interest of the investment that I just made.
- [02:58]
B
Yeah, that was quite a few of the comments were. One says it's a big club and you ain't in it. People that can get 10% interest. Lol. Someone said he proved to be a salesman as soon as he said 10% he needs to sell hot air balloons. Someone else said, 10% interest, you got to be in the club for that. And someone said just invest it wisely. Laughing my ass off. A lot of stuff works on paper. And someone said this guy's a magician. 10% interest, that's more impressive than his basic mass. So a lot of people were saying the 10% interest is not a realistic thing.
- [03:33]
A
Yeah, it's always funny man, because I, every time I, the other day I was somewhere like walking around and this, this person, I just had a weird interaction with them and they were just. I was like, what? You've been speaking English to me. Like nothing that you're saying is making sense. And in my head I just was like, this is the person that's fighting with people in the comments. This is the person that goes on somebody like that. Like the thing is they did, they did. It went viral, right? So like probably the majority of people in the comments are people who are not following Brad or know anything about him, right? But the dude makes great money. He's built a, he's built a fantastic business out here in Vegas. He's driven Ferraris and all the other cars that you can throw out there. He's got investments that are making him money. He's got multiple companies now. The dude does very, very well for himself. And you have Some person who' working at CVS and spending their free or maybe even their jobless and they are in their mom's basement type of a thing. And they're on there telling this guy what it, what investments are and how investments work. And it's like literally just go, go to ChatGPT or Google Real quick, bro, and look up the average return of the S&P 500 in the last a hundred years. It's got to be close to 10%, maybe 8.
- [04:47]
B
10%.
- [04:48]
A
10% on the dot.
- [04:51]
B
Since 1957, the S&P 500 has delivered an average annual return of 10.33%. When adjusted for inflation, the real return is 6 to 7%.
- [05:01]
A
Okay, okay, so adjusted for inflation. So obviously. But inflation is going to destroy the dollar regardless you put it in the S P, right? Yeah, the silly thing to include in that, but the, the whole thing. That's the whole idea.
- [05:12]
B
The last 10 years, the average is 11.3% to 12.2%.
- [05:18]
D
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- [05:45]
A
Yeah, that's the. It's. It's just so funny, man. People just come with the boldness. Somebody who's never invested a dollar in their life, or they're going to come tell somebody who's a multi, multi millionaire how to invest their money. And this is like Brad speaking from personal experience, by the way. Like, him and I have had these conversations kind of behind closed doors where he's expressed that to me, where he was like, man, I used. Like, I made so much money when I was younger and I just went and bought cars and I bought all this flashy stuff. I bought the watches and I bought the suits and I bought all these things that I thought were co. And he was like, it was just dumb. He's like, I wish I could. He's like, if I could go back, I would put all that money, I would park it into multifamily real estate and I would. I would still be able to go buy the things. You may not be able to buy it today.
- [06:25]
B
Right?
- [06:26]
A
If you, if you throw them. If you get 130 grand cash and you're looking to Buy in a range. Like you might not be able to get the Range Rover today after you put that money away, but in a year or two years from now you can buy it with the return that you're making on the money that's in the investment.
- [06:39]
B
And someone's come and said, I bought the $130,000 car after it was devalued to 40,000 and now I just look like a boss, which is also another strateg. Like just wait till the car is two or three years old and buy.
- [06:50]
A
A, buy the older car that still looks cool. Of all of these options, the his second piece of advice was the best one, which is just don't buy the Range Rover. Like if you don't have enough money to buy it three times over cash, then don't buy it. You're talking about putting six figures. Like six figures is not a small amount of money for most people in the world and even in the country. Like don't put that money into a car, put it into something else. And like I said, unless you have enough money to be able to pay for that thing three times over, cash out of your pocket, then probably don't buy it. And if you do have enough money to pay cash three times over, then your cash is better served working in investments to make money. And then you can pay the. If you really just love the car and this is like a dream come true for you type of thing, then okay, go do it. But you can do it in a smart way rather than just like decimating a third of your net worth in a vehicle that's going to depreciate by 60% over the next couple of years. So that's the second option. The third option is do both of those things. But then when you buy it, it don't buy it for 130 grand, buy it for 65. It's out of like the best thing is looking for cars that are off of a three year lease. You know, like you. So if it's 2025, you buy a car that was made in 2022, it's a three year lease, which means it was probably maintained. Okay. It means the miles are pretty low. It's probably like 20 to 25,000 miles. But the majority of the value that's depreciating on that car is probably already off of the value of the car by that time. So instead of buying the brand new $130,000 one you can pick went up three years old with 20,000 miles for 62,000 and save yourself a lot of cash.
- [08:27]
B
Right. Well, I got to ask you, If. If money was no option and you were just going to go out and splurge on a car, what car would you buy?
- [08:37]
A
Oh, man.
- [08:39]
B
If you were going to throw financial advice to the wind, you know, Yeah, I would probably.
- [08:44]
A
I would probably go with a Rolls, mainly. Mainly because I'm just like, a bigger dude. So I've sat in some of these other, like, supercars, you know, like the Ferraris and Lambos and things like that, and. Or like the Audi R8, which I love. I like all of them, and I think they're awesome. But it's so uncomfortable for me to, like, get in and out of the car and, like, my knees are usually cramped up against the dashboard or something like that. So I would probably prefer to have like a Rolls Royce Ghost or. Or a Bentley Bentayga. Even the suv, if I got a Lambo, it would be the Urus. Just because it's the SUV and it's a little bit bigger. It's actually like the Urus is like the cab room of a normal sedan. You know what I mean? Whereas a Hurricane or Aventador is just going to be super, super tiny in there. So it's just difficult to. It's. It wouldn't be super comfortable for me, so I would probably look for that. But it's funny that you bring that up because I was having this conversation with a friend probably like three or four years ago, and we were talking about randomly, like, if. If you had to. If you had to go spend a million bucks and get some cars for your garage, like, what would you get? And he gave me his answer. And then I told him my answer, which was literally what Brad's saying in this video. I was like, I probably. I probably wouldn't use all of it for that. I'd probably, like, go put it in a couple of investments and then look at how much money I have coming in on those, and then just factor my payments into whatever I can afford with the money that I get from the. From the investments. And he was like, bro, that's the difference between me and you is that I spent that money in 32nd. And you were thinking about 10 years from now. And it's like, well, that is the difference between people who accumulate money and the people who don't accumulate money is they. You start realizing that it's not about the payment that you can afford off of your earned income. It's about how much is the total investment of this thing. And Is that money better served being put to use somewhere else that actually generates money and makes little money babies for me while I'm sleeping. And then I can take the money that I'm making from that and then go spend it on something absurd or something that has no intrinsic, intrinsic value in five years from now just because I like it. You know, like that type of thinking is what separates people who have money later on in life and the people who have to work, you know, two or three different jobs even into their 70s just to be able to afford their crappy apartment and pay the, the payment on their Honda.
- [11:08]
B
Right, right. I gotta say one of the funniest things ever is when you go to a car show and you see the 70 year old guys getting out of their Corvettes. You just see this like slow, they.
- [11:20]
A
Have knee braces on.
- [11:21]
B
Yeah. Trying to wander out. But they look so cool rolling in and so cool rolling out. But it's, it's the cutting out for five minutes. That's a little bit, a little sketchy.
- [11:31]
A
Yeah. What's funny man is you start like success leaves clues, right. So you start seeing, you start seeing wealthy people and unless they, unless they love cars, like they're just huge car fans, then they're driving Toyotas. I think actually the Ramsey team ran the largest study ever on millionaires and found the number one car brand owned by millionaires were. Was Toyota. The only luxury car brand that even made it in the top five I believe was Lexus and which is basically just a nicer Toyota, you know what I mean? So that's where, that's where people are putting their money if they have a lot of money. You know what I mean? So I even remember Alex Ramosi said something about this recently where he, it was when he was kind of on the, on the uptick a little bit during gym launch and he started making real, real money and had millions of dollars in the bank type of a thing. And he was showing up to speak at an event and he show and I think it was a Toyota like a crappy old used Camry or something like that. He gets out of the car and somebody going to the event was like I thought you were supposed to be rich. And then all he did was say when he walked by all he said was well you should see my bank account. And then just kept walking. It was like, well that we're, we're, we're, we're getting it wrong. Like we're thinking that just because somebody has a nice car makes them rich. When in Reality, the majority of people that are driving those cars are. Can barely afford the lease payment. They're doing it for status. They're doing it to get girls or whatever. Like, they're. They're not. They're not actually using their money wisely. And then a couple years from now, they're probably. That car gets repossessed and they're back to having to drive a Toyota anyway. You know what I mean? It's just like. It just doesn't make any sense to me, dude. Like, unless you have, like, actual you money, then your money should be going into ways to generate more money until you get to the point where you can just. You can drop money on the $130,000 car and not care because you don't care if it depreciates 50 grand because you have 14 million in the bank. So what do I care? Like, I would rather just drive the new car because I want it. You know what I mean? But if you're not in a position like that, then you shouldn't make decisions like that. It's just. It's going to. It's going to ruin your financial future. So just have some discipline and don't do it.
- [13:43]
B
Yeah, well, most people would. Well, a lot of people in that story would have rolled up and been like, man, they would have, like, sunk down a little bit. They would have been like, man, my optics look bad. I need to go do it. You know? Like, they wouldn't have even thought in the way that he was in that moment. Right.
- [13:59]
A
Just the immediate snapback of, like, well, you should see my bank account.
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B
Right.
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A
This car has nothing to do with my net worth.
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B
Right.
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A
Why are you. Why is this even. Why is this even a measurement of why you're perceiving. Of how you're perceiving my wealth, you know?
- [14:10]
B
Yeah, that's a great reframe. But, yeah, go ahead and close this out on that episode.
- [14:15]
A
Yeah. So ultimately, guys like, financial discipline is. Is required to make money. Obviously, the show's. The show's about how to generate more wealth for yourselves, but also a piece of that is being disciplined along the way. So stop thinking so short term, start thinking more long term and set up yourself in the future to make the decisions that you can't now. But you're not going to get there if you're not disciplined in the meantime. So thank you, Brad, for the awesome clip. Everybody else listening. Remember, money only solves your money problems, but it's easier to solve the rest of your problems if you got money in the bank. So let's solve that one first here on the Travis Makes Money podcast. Thanks for tuning in. Catch you next time. Peace out.
- [14:54]
D
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