"Do NOT Buy A Home!" Money Expert Reveals What To Do INSTEAD!

the reason America's broke is not because of inflation it's not because of the economy it's because they're not living on less than they make a recent survey by Credit Karma found 40% of Millennials have spent money they didn't have and gone into debt to keep up with their peers YOLO I deserve a sweet treat life's hard mental health day and they just go spending like crazy and roughly one in three doubt they'll be able to keep up this lifestyle without incurring debt everyone wants to point at inflation and the White House and the economy and all these things that we don't have full control over what we can control is how much debt we have what our income is and what our daily spending habits are you have to have the I've had it moment that's what Dave calls it where you drew a line in the sand and you said I know my life is worth more than living in debt for another 20 years think about what a $5 sacrifice could do for your future look at that exponentially across all of your expenses most people are unwilling to sacrifice for 2 years and yet they're willing to live in mediocrity for the next 20 [Music] George thanks so much for coming on the iced coffee hour we really appreciate it it's an honor is this a three repeat this is are so special that we had to have you on again because everybody loved the first two episodes and we're going to dive even deeper the idea is we're going to go over some controversial truths about money okay and some big money mistakes that people need to avoid I know a lot about both of those things and you guys can feel free to chime in with your own money mistakes you know let's be vulnerable today that's the idea we all have different ideas around money and we're going to challenge each other and uh try to find the truth is this like a debate this could be a debate this might get a little contentious but it's your show you got two against one you work out I feel like it's not a fair fight to begin with all right well let's have some fun cool oh also huge thank you to Ramsay Solutions cof and also for hosting us we're always happy to host you guys you've become good friends of ours and we've always enjoyed making content with you guys and I hope it helps people that's the ultimate goal can we help some become debt free build wealth learn something they didn't know and avoid a money trap I feel like a lot of people look at this as like the most uh uh unlikely Duo you know for someone who like is big into credit cards and keeping 30-year mortgages versus someone who's very like anti- debt 15-year mortgages paying it off as soon as possible yeah we can still be friends that's what I've learned if you are kind and respectful and you're not trying to just like come at me with a knife then I'm like hey we can talk about it as into ual friends and then still go hang out and have a good time that's my goal is to become a bridge to the finance community at large cool well let's talk about it we scoured the internet for a bunch of different takes on money and we come up with a list and we'd love to know your opinion on it good research how long does it take to do cuz I've watched a lot of ice coffee hour stuff this is not an easy job you make it look easy yeah it depends so if we're shooting with you I mean we know you fairly well by now so this wouldn't take as much time as if we were researching for someone new like Jordan Peterson that one I mean I probably spent months preparing for that how do you even begin to crack that egg let's start off with the first one we looked up the controversial truths about money and this came up that we thought would be interesting it says a house may not be the best investment in the world all the extra debt creates stress which steals energy from other areas of life think carefully before getting a huge mortgage maybe you could live smaller and still be happier or rent for longer until your Investments grow big enough to Prov IDE Financial Security a house is it the best investment ever no I don't look at it as that now I think we do need to separate a house as an asset versus the mortgage which is the liability I think it's important to separate those two because if you're following the Ramsay plan the way I teach I'm going to say well yeah I don't want you to have too big of a mortgage and hang on to it for the rest of your life let's get a house let's make the mortgage reasonable and let's knock it out when we can and if you do it that way the house can become a beautiful asset even an investment I mean my home home and the homes I've had have been some of the best investments as far as Roi you know it's beaten my 41k because of the time I bought the area I bought all of those pieces and you know as a guy who's owned a lot of real estate real estate can be a great investment when you do it the right way the issue though that I see is that a lot of people look at real estate performance over the last really 20 years but more specifically the last 14 years well since 08 probably right coming out of that right and they see how much prices have gone up and I think a lot of people have this idea in their mind that house prices are going to continue going up maybe not at the same trajectory even if it went up half of what it did from 20110 through now they'd be doing quite well I don't know if houses are going to see the same appreciation over the next 10 years I could be totally wrong but it it's hard for me today to look at a house and think that that's a good purchase compared to what it was eight years ago oh absolutely I think the growth that we saw you even in the homes that I had uh not homes plural but the homes that I've had singular in the times I've had them you know I'm not going to see that kind of return in the stock market but like you said in the future we might see homes appreciate at 5% instead of 20 or 30% and 5% versus what the market might do which could be 15 20% on a good year 25% even that's going to beat the real estate and so I think you should get into real estate if you love real estate and you want to purchase an investment property with cash that's probably the most controversial take of all then go for it if you want to try out being a landlord and you want to make that extra income from the rent just know that it's not going to be passive it's going to take work and you've shared on your channel some of the nightmarish experiences that a landlord and a real estate investor can have yeah so you think you should only ever buy an investment property if it is Cash yes that is that is the wisest way to go about it um I think people get too star-eyed when it comes to investment real estate and they go well I'll just put 3% down I'll do the bur strategy and it'll all work out for me and what happens in a 60-second Tik Tok from some dude telling you you know some Grand you know Grant Cardone for example saying dude just you know if you don't have 30 houses by the time you're 35 you suck if you don't make half a million dollars your life is terrible I'm like all right let's tone it down right that it doesn't have to be that way and so I believe you get your primary home paid for now you have a lot of cash flow on margin because you hopefully have increased your income with your career over time and you steadily save up and pay cash for investment property when you can whether that's a fun vacation or an investment a lot of people would look at that for paying cash for an investment property and just think let's just say it's 400 Grand saving up $400,000 in cash is going to take a long time and if you do that in the stock market let's just say you're throwing in you know a th000 bucks a month into the stock market now 20 years have gone by and you have enough to buy an investment property if you sell the stocks now you're left with a tax bill that takes you back down you have to almost start over again so you know buying an invest property with cash would be extremely difficult at that point it's like unless you have a huge income it just you wouldn't feasibly be possible for well the first one's going to be the hardest and remember doesn't have to be $400,000 home so your first investment property you know for you how much was your first one the first one you ever bought $559,000 during like the the bottom of the market yeah that was like 2011 of foreclosure sure know that house is probably worth 380 but for example you're not going to buy the most expensive home for your first property you know you're you're going to look for maybe it's a condo maybe it's a town home it doesn't have to be an expensive single family home in the part terrible Investments though maybe condos are awful I mean very i' I've I've never seen a good investment for a condo every deal that I've ever looked at where where someone has come to me is like hey what do you think of this as a deal I'm like what can to rent for what's the HOA what are the property taxes what are other units selling for they're all money losers every single one is not a lot of Roi for you there's only so much that you could upgrade in a condo you can't add score footage you don't own the land you're at the whims of the HOA there's so many things that could go wrong on that uh the other issue with with a lot of these condos is that getting Insurance on them depending on the location some of them just don't have the proper insurances if something were to happen like La is a great example of this a lot of condos there don't have earthquake insurance you're who's going to ensure that too much risk right too much risk and so they just go without it but imagine you have like 800 Grand suck in a condo without earthquake insurance something hits damaged what do you do you're it's on you you're wiped no that is scary depending on the area you're in so you're kind of limited I I personally think I I would never invest anything that's not either multif family or a house well a lot of people just think like what what do you think about the strategy of I'm going to buy the duplex and live on the other side love it have you done it yes what's it like living with next to your tenant fantastic do they ever knock on the door and go hey bro you got a problem no never no I I had the the nicest people next to me they were they were sool SC them really well I'm always curious so I inherited them so they were already there and then I moved in so they had been there for quite some time you w the jackpot in that regard I love them they were so nice they were so quiet so respectful got along yeah and it it was an elderly mom and her son that were living there I loved them they were so nice so it worked out would you do it Jack absolutely yeah I I mean at this point I would probably I would probably not do that since I already live in a house with a bunch of guys so I just move them in been there done that so it works out great for me but I definitely like a few years back absolutely would have loved to do that all right yeah yeah I mean the the thing is you're always going to introduce risk when you take on a mortgage and we believe that more risk less peace less joy and I'm all about what what are your options and once you pay off the house I don't want to pick up another payment I'm going to save up and buy something reasonable and so that's my plan if I ever do buy investment property is to buy something reasonable in cash which means it's probably not going to be within a 5 mile radius of this area CU this is the 11th wealthiest County in the nation so it wouldn't be wise for me to just go spend 800 grand for my first investment property it's probably going to be further out but you know what before we go into that in today's job market it could be a struggle to find people to work with although when it comes to hiring the best way to search for a candidate isn't to search at all instead it's to match with her sponsor indeed indeed is the ultimate 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which is not investing in single stocks putting your money in mutual funds and index funds giant pools of stocks you're going to be more Diversified and less chance of getting you know just eaten up on that ride and so stay the course invest for the long term I don't invest without a five plus year Horizon what about Bitcoin you know my feelings on bitcoin I wouldn't say they've changed uh I'm not a Bitcoin hater I personally don't have any cryptocurrency I'm not mad if people do I just hope that they're also investing at least 15% into retirement accounts into tried and true methods and then using their fund money to invest in crypto and if you're going to invest in crypto Bitcoin is the current leader winner with the best track record would you invest 1% of your net worth in Bitcoin ooh would I I don't know at what point I would be comfortable doing that versus just putting it into the market and even a brokerage account into an index fund I'm much more comfortable just throwing money into an index fund versus well what if that money could 20x but you could put it in a Bitcoin ETF what would that ETF do for me versus is just Bitcoin solo the ETF would just be easier to buy and you'd be able to do it from within a re account yeah it's still like a single stock in that regard yes if there was a I'll say this if there was an ETF or index fund that had a collection of the best cryptocurrencies I I would say all right I'll put some fun money in there that would be my caveat I have a feeling at some point that's going to happen well the whole idea is that it's unregulated but now as it gets more regulated it kind of takes the steam out of it in a sense um now I get there's a finite amount of Bitcoin and all of that and it can't be devalued with inflation and printing money so that part is actually the most interesting Parts me I talked to Tom um Tom bill you about this yeah but really what bothers me is the people that are into it it's not the actual the crypto it's aoral you know it's like a brick you can throw it through a window you can build a school the people that are into Bitcoin like once you have hasht Bitcoin in your X profile I'm like oh you're not okay like there's mental health issues like if if I had # mutual fund in my Twitter bio you would say like this guy he needs he needs to see someone laser beam eyes on Twitter have you seen that that's also strange to me and so I I could see you with laser beam eyes people have probably done it for a YouTube video like trying to like you know take me down make me look like what's that evil Joe Biden dark dark Joe or whatever so I can see that happening but it's the people obsessed with it it's like an MLM that's why I've always said cryptocurrency is just Mary Kay for young men cuz the people who are into it are trying to get other people into it they're obsessive about it and they make money when they get you into it think about that if I want you in on Doge I'm going to tell everyone hey you got to get in on Doge man it's a great price right now it's going to to the Moon Elon said he's going to go on SNL and then it's going to crash and so I just don't like the culture around it versus the actual technology itself of the blockchain and all that I do see that changing for Bitcoin at least I do see that culture transitioning into something a little bit more corporate but like you said it takes a bit of the steam out of it yeah if it was offered let's say in our 401k if there was a Bitcoin mutual fund uh I might just throw a little bit in there for fun and go all right above and beyond my 15% I'm going to throw some into this mutual fund and see what happens but I just think there's too much get-rich quick greed around it and nobody can convince me otherwise CU why are you investing in Bitcoin it's not because of the techn no it's because you're hoping to get a,x versus a 20% return I see it as something where people don't want to put their money in the dollar that they see that as a global currency or a global store of value that everyone attribute some form of wealth to and so they see that as something that there a finite amount of it everyone from around the world sees and agrees that this holds some level of value I'm going to put my money in that sure I saw the RFK thing did you see this RFK Jr he was at the Bitcoin conference here in Nashville and he said he wants the us to have 20% or almost 20% of all market share of Bitcoin and that the government needs to buy you know it was I did the math on this it was like the government would need to spend like $70 million a day with whose money taxpayer money the government doesn't create worked for Al Salvador though mhm did it yeah how are they doing really well so they used taxpayer money to buy Bitcoin y yep and then what happened it dropped and he bought the dip he bought yeah he bought the dip so he timed the market perfectly yeah no he's just technically he's just dollar cost averaging okay but he started buying at 30 wrote it down doubled down at like 16 18 and rode it all the way back up their currency though was completely obliterated so it wasn't like there was anything to lose it was their it was their Hail Mary yeah I'm just not I think there's too much fearmongering happening with the dollar devaluation and it's all going to come crashing down all these countries are going to come against us and your dollar is going to be worth nothing I get that inflation is real but I think there's way too much fearmonger on the other side saying well I'm going to have all my money in crypto which by the way you still have to turn back into cash to actually use it I mean it's similar to gold in that regard where people are going I'm going to buy up all the gold and then what you're going to have to go sell it to a pawn shop for less than you paid for it just to turn it around well I think eventually we could get to a point where for larger purchases you could just trade Bitcoin like let's say a house you say hey that house is 10 Bitcoin five Bitcoin or 5 and a half send me that and that is payment or a car one Bitcoin so that day is farther away than the dollar being demolished that's just how I'm like all right I'm going to take my bet the Dollar's fine and I'm going to invest to beat that inflation rate that's the key when people just have their money in a checking account or a measly savings account making 0.1% yeah that's terrible I wouldn't do that I'm going to invest in I'm G my house isn't appreciating my investment accounts my 401ks Ira a taxable brokerage all of that will hopefully appreciate in the long term more than the dollar is being devalued that's the only hope we have now speaking of inflation here's our next controversial truth about money house prices aren't what they seem if you remove all the stimulus in money printing then most people's homes didn't increase in value at all what can you explain that to me I feel like I'm on a spelling beam like can you use the word in a sentence yes okay when you look at housing prices over time when you account for inflation a lot of homes simp just stay the same value it's just you're adding inflation on top of it so if your home goes up in value let's just say 3% a year if inflation is 3% a year you're just keeping par homes aren't really going up uh when I looked into this it was only certain major metros and certain locations that exceeded the value of inflation over the last 100 years so what this is saying is that your home isn't really going up in value what you're really doing is locking into something that's keeping Pace with inflation and that more inflation there is the more your home goes up in value so if I buy at 500,000 I sell at a million well by the time I sell at a million my buying power is more like 500,000 is that the kind of the idea here basically from the original time that you I just go tell that to a a renter who was wanting to buy a home and tell them it's it's the same value no it actually costs $300,000 more than it did 5 years ago so the price is the price whether or not you want to adjust for inflation and so I'm still going to put I don't buy a house as a hedge against inflation I I want to roof above my head and I want to cover my biggest fixed expense so paying off my mortgage removed my biggest fixed expense which now I can use to invest or do whatever I want with and that gives me the most options and the most piece that's the way I look at it the answer to financial problems is to make more money cutting expenses and being on a never-ending budget has limited effects and inflation and layoffs ensure this strategy stops working at some point there is a point where you can cut your expens is all you want but if you make $25,000 a year you're right you're not going to get very far financially so you've got to make more and I believe income is one of the only things in our control everyone wants to point at inflation and the White House and the economy and all these things that we don't have full control over what we can control is how much debt we have what our income is and what our daily spending habits are and that's where I think the budget carries through till the end of my days I'll be doing a budget because it helps me know where I'm at financially if I'm on track to get to where I want to go and part of that is am I managing my expenses wisely yes let me cut down my expenses because I might find an extra thousand or 2,000 in there just by getting wise about that but I might still need more margin and that's where making more will only compound that effect because if I can save a th000 and make a th000 that's a $2,000 spread up to what point do you have control over your income like what dollar amount I mean I think in America there's endless opportunity I mean now the new goal for every genzer and Alpha is become a YouTuber and it's not because of just the spotlight you can make really amazing money on YouTube you guys are living proof of that and so I I think part of it is what are you willing to do what skill set do you bring to the marketpl and what kind of setbacks are going to hold you back from building that kind of wealth because if you go get $150,000 degree that has no Marketplace value you're going to be a lot more frustrated you're not going to be making a lot and you're going to have a lot of debt but if you avoid the debt start your adult life no debt making a decent salary and figure out ways to maybe it's climbing a corporate ladder for you based on your role or maybe you want to be an entrepreneur and that's a lot of people are wanting to go that route and we know with entrepreneurship it's difficult but the ceiling is much higher you know Dave what Dave Ramsey makes as an entrepreneur and CEO far without way whatever I could ever make as an employee of a company and so you also have to understand the different levels if you're going to be an employee unless you're a SE Suite executive it's going to be hard to make seven figures but if you're a CEO and you run a company really well and serve people well in the marketplace you could make three five s million a year but what point do you think someone has control over their income to say like hey if you're making 20 you should be able to make 50 or there's no reason you can't make 60 or 70 and when you look at the internet and how much you can get for free of just skills I do think we're seeing less demand for you have to have this college degree yes in most Fields I would say 90% of the fields out there they're not saying you have to get a master's what they're saying is do you have the soft skills and the hard skills to do this job and experience which worries me when kids are getting their fourth master's degree with no experience and then wondering why no one will hire them well they're overqualified with zero experience why would I want to hire you you got too much on the line I'd rather hire the guy who's hungry with no degree or with a four-year degree or whatever that I can grow into the role and so I do think there's there is a limit depending on where you are right if you live in the sticks and you can't find remote work and there's only a Walmart and a Dollar General yeah your income is going to be limited by that but the beautiful thing is we're in America you can move people forget that you can move locations you guys have moved you moved from California to Vegas right was it partially for financial reasons oh yeah so technically you are bringing more home now than you were in California even making the same income MH that's a option people have they don't think about that when it comes to their income is you have to think about income taxes and what does it cost to live here what does it cost to rent so I think if you're willing to make the right sacrifices you're willing to be a lifelong learner your career potential your salary potential is exponential to a degree if you're an employee if you ever make a million dollars I'm going to be high-fiving you that's that's incredible but you also don't need to make a million to have a great life we see people who are making 50 60 70 with a great life I think that's a great take that's like not talked about enough but it's also really controversial it could be why is that if you can't afford to live in a certain place then you should probably just move that's like the other side of the token where like a lot of people think I need to live in LA I need to live in like Manhattan because why not I grew up here I should be able it's what I know yeah it's it's they they feel entitled to be able to live in a specific place but if you can't afford it then you might just have to move out of the city and then commute to work you know ideally not but I think that people need to be maybe a little bit more okay being uncomfortable I talked to a guy yesterday on the Ramsey Show and he lives in La he's got a partner who's about to have their kid and their rent is 3200 bucks they split it so he's paying 1,600 he wanted to start two businesses he said the partner screwed him out of compensation so now he's been driving for Uber so he financed a Tesla which has a $700 $700 a month payment he's paying $800 a month for charging he's paying 350 bucks a month for insurance and he has debt in every other area of his life and I'm going going dude you need to move you can do Uber in anony you don't need to be in Los Angeles to drive for Uber and so I was trying to just show him that there's more options out there and that if he wants to get out of debt yeah paying this much in rent is part of the problem and it's a it's there is a solution there or you go get roommates like youve got how many roommates four others and that limits your personal housing expenses yeah cuz they're all paying into the pot and so there's nothing wrong with if you're single have roommates even Jade warshaw one of the personalities her and her husband had a roommate to help them pay off debt they had an extra room and they said we're going to rent this out and it's going to help us pay off debt so you've got to kind of swallow your pride and go I'm not entitled to have my own one-bedroom you know apartment in La just because I'm a grown adult doesn't work like that yeah renting out a room I honestly think is one of the best things that you could do to make more money I mean when you think about it even like $800 a month yeah think of have you thought about your place people would pay a premium to live with gr he has thought about this would feel about it have you talked to her about the depends on who it is we have a few friends that we would love just to you know give them a room oh gram would love for me to live with him I've tried I was for a while and then he started trying to charge me in in not rent Bitcoin know in in like a in utilities $300 a month in just Tri INE that's it so as soon as you started doing that I started looking to buy a house because you know you got to I guess measure calculated that buying a house was cheaper than paying $300 a month for utilities tell me how that makes sense Jack it it was different math it absolutely was significantly better off right now financially because I bought a house and because I'm renting out the rooms and I'm living for free and I'm and that's not even counting uh paying into my own equity in the mortgage payment wow so well you know to that end I think a lot of people that are living at home are stunting their growth and I think if you're not charging your kids something to live there as an adult with a job you're doing it wrong what I was telling there needs to be an exit strategy you have to like want push them out of there cuz if you let them live for free why the heck would I want to go rent for 1,200 bucks exactly so you were just bringing good parents Cy characters over too very se he wouldn't let me bring people over which was another reason why I wanted I get it's my place I don't want strangers in and out of my house I wouldn't complain about it I think that's that's his decision to be fair did you mature uh you know emotionally physically financially by moving out and getting your own place was there an independence gained yeah and I had lived you know in my own place before like I I didn't just go straight from my parents to my pseudo parent over here like I I had a couple of other you know living situations somewhere in between yeah there there's something about having your own place having to take care of it having to pay the bills having to be in all the accounts and manage that that sort of actually sends you into adulthood absolutely so I encourage it now I get people go home they want to pay off some debt aggressively for a year while living at home or they had a life situation happen it's okay but don't let the the safety net become hammock which has happened a lot when is too late to live at home you know as far as age goes I think once you are in your mid-20s and still living at home there's a problem because by your mid 20s you should have graduated you should even if you did a second degree another 2-year program or whatever you should be by 25 or 26 gainfully employed and have some semblance of what you're doing in that stage of life even if it's not your Forever career if you are on salary I just don't think you should be living at home with Mom and Dad I get there's rare situations there's cultural differences there's ultra high cost of living areas you live in Silicon Valley but I still would say your life is going to be better your quality of life is going to be better if you move out and get your own place even if you financially suffer a little bit what if you have debt you're 27 you graduated with a master's you got a PhD with debt and you could live at home for three years you're 30 years old but you could wipe out all the debt I don't think the stunted growth is worth the really I think that person at 27 to 30 probably not going to have a girlfriend probably not going to get married and that's just anecdotal from what I've seen on the Ramy show rarely do we see a guy who's like yeah like I'm I'm engaged now and I'm it's always a guy who's just sort of been Baby by the parents and went hey B you stay as long as you want and just pay off your debt as as you can and it slows them down and so even Dave would say hey get out of the house have an exit plans for 6 months or a year get out of the house house pay off debt aggressively and then pay the rest while you're still paying rent if it slows down your debt payoff we're okay with that because of the benefit you get on the other side of that Independence and maturity because Dave says an eagle that doesn't leave the nest is called a turkey and that's kind of what we've seen is a 35-year-old still living at home and still having the benefit of mom and dad paying their cell phone bills and covering insurance and at some point if you want to grow as an adult you want to get married you got to be your own person that's a big jump it's difficult sorry if I offended anyone living at home here's a really quick pop quiz what is the most important resource 3 2 1 it is time and unfortunately we all know it is way too easy to just waste countless hours of it scrolling it all away on your phone if that sounds like you and you want to be spending your time more productively you could be learning about history economics or the great works of literature and you can get started for free with our sponsor Hillsdale College Hillsdale College is currently offering more than 40 free online courses in the most important important and enduring subjects like you could learn about the meaning of the US Constitution the rise and fall of the Roman Republic or the history of mathematics and logic with Hillsdale colleges online courses all available for free that is right it's free I personally recommend you sign up for economics 101 the principles of free market economics in this free online course you will examine the foundational principles of the free market such as the relationship of supply and demand the failure of central planning the rise of macroeconomics under the influence of John mayard chains and the 2008 financial crisis take it from me guys I actually studied econ in college and yeah it is important stuff to know but funny enough paying for a degree in econ is not very economical also the course is completely self-paced so you can start whenever and wherever I strongly recommend you guys try out Hillsdale economics 101 course which is completely free like I said there's no cost and it's really easy to begin again that's hillsdale.edu hillsdale.edu with the link Down Below in the description thanks again to Hillsdale College for sponsoring this episode and now let's get back to the podcast the trend of Don't Buy $5 coffees is the exact psychology that keeps Society poor I think what they're getting at I think I've heard uh R SI talk about this is you want to focus on the big wins the big changes versus the little ankle biter this $3 thing here and I get what he's saying you know if you let's say you're getting a refund of let's call it for easy math 2400 a year Well if you change your withholdings you could get $200 back in your life just by changing withholdings well that's better than saving a dollar here or $2 doar here and so focusing on the big wins selling your car if you're not underwater and you can get out of it that's a much bigger win than cutting out a $3 coffee every now and then but I do think uh I don't think the mentality of Don't Buy $5 coffee is what's keeping people broke I don't see a correlation there what I do see is the pendulum swinging to where they say oh really me not buying Starbucks is going to allow me to buy a house okay and so they're very flippant very sarcastic very cynical about it and the pendulum swings to where they go YOLO I deserve a sweet treat life's hard mental health day and they just go spending like crazy and so you've got to have a middle ground where we say I can enjoy life while living on less that I make and I can make short-term sacrifices so I can have long-term wins yeah I think it's about dialing it in it's like the person who wants to lose weight but they still want to eat a dessert and they go in well oh this this cookie is fine it doesn't matter I think it does I think it does matter because that one cookie is not just a cookie it adds up and it sets you back in some way yeah so I'm pretty much deficit yeah like 100 calories isn't going to break the bank but repeatedly with multiple cookies you're not going to lose weight and the same happens financially is yeah it's a $5 coffee but if you're doing that every single day well that's a lot of money that's 150 bucks a month and if you add that to the other areas you could save on cutting down your cell phone bill let's reshop the insurance let's pause investing let's change our withholdings let's make a little more money all of that combined now has a Ser some serious momentum I did a calculation a while back where it was like if you if you started just I think it was like $5 a day on coffee starting at the age of 18 and a Roth IRA what that would be worth over 40 years and I think it was like $1.2 million taxfree of just $5 a day and that's your coffee yeah and the coffee is just an example and what people get stuck on is Graham doesn't want me to enjoy my life the one thing keeping me alive and making life tolerable is this coffee and you're not saying it's about the coffee you're just saying think about what a $5 sacrifice could do for your future and now look at that exponentially across all of your expenses across your whole life and then don't complain that you're broke in retirement when Graham just showed you how you could have had a million by changing one habit that's the frustrating part is people see it as oh you want me to suffer and beans and rice rice and beans for the rest of my life Dave ain't eaten rice and beans he did it for a short season so that he could have a better life on the other side most people are unwilling to sacrifice for two years and yet they're willing to live in mediocrity for the next 20 yeah that's America what do you think the one thing people could do today to improve their finances is oh man what's the one thing you could do today to improve your finances pay attention and what that means is looking at what your actual income is what your actual expenses now what you think it is now how much you think you spend eating out or how much you think you spend on groceries but what is it actually and most people would be shocked if I said Jack how much you think you're spending eating out you might say $450 $450 now let's say Jack actually tracks how much he spends over the next month he would be astounded to find out that he's actually spending $700 it's probably more like it yeah and so I think looking in the financial mirror is the most important thing you can do and it's why we say do a budget download every dollar get your income on there get your expenses on there track the expenses it doesn't have to take a long time you can sit it while you're waiting for your coffee drag your four transactions for the day up into the right categories and doing that ahead of time will help you avoid overspending because the reason America's broke is not because of inflation it's not because of the economy it's because they're not living on less than they make that's it it's that simple and if Congress did this we wouldn't have the deficit right if we could just live on L we make we wouldn't have $36 trillion in did you see that Elon Musk wants to uh Department of government efficiency Doge I think he would make it spell do I would love that that is my number one thing I'm excited for me too what is Elon have to do you think elon's going to get high he critic yeah he has criticized the national debt for quite some time and blowed government spending and he says it's you should have a third party auditor go through government spending and get it down because so wasteful I agree I'm with it I think that's the one that's a bipartisan policy that Dave Ramsey and Graham stefen can agree on yeah I think it's easy to get the public sold on something like that but it's very difficult to get the people that actually make the decisions for the people which aren't the people these days honestly it's just like the bureaucrats I don't think that they would allow for something like that to happen and I've mentioned this scam I've been saying this for a while we need 10,000 accountants to audit the government oh instead of auditing the American people yeah why are we not there's easy of like see where actually the government is spending their money like they kind of generally tell you where it's going but we also have no frame of reference and kind of data showing all this no like they they do come out with like reports but it's still pretty IG ambiguous I love the one there was like a a million dooll toilet in San Francisco yeah have you seen this yeah there's a whole website that goes through like wasteful government spending and they'll show like a stupid little thing and it's like the cost should have been $50 or like you and it's a million or this fire hydrant would cost $5,000 and it's $100,000 for this thing it's like everything is so expensive well no one's really paying attention I mean the government kind of has a reputation for and so people just say oh here's how much we're charging all right here's the blank check just write an amount and uh it's paid yeah that's all it is scary yeah I do think I and I hope whoever is next in office takes a harder look at that and I I don't know that we're going to see it from the Democratic side I don't know but I also saw an interesting stat that showed that kamla would put us in a far less deficit than Trump oh because of tax cuts because of the tax cuts it was like a one point something for commo whereas five point something for Trump if you know as far as the deficit goes I think that's only because she wants to tax so heavily that's really all it is that that's where it's coming from she wanted tax including like the wealth tax like the the uh uned gains and it's including a 28% capital gains tax rate which is which is not the end of the world right but you know when you when you have one person wanting to cut taxes and one person wanted to increase them yeah you know of course that but still we spent $3 trillion doar more a year then the United States brings in and when you look at how much you're spending on income taxes uh I think there is a point to be made that we could abolish the income tax entirely and just spend less money and audit the government TA in Tennessee and things totally fine yeah what is your take on the unrealized capital gains tax I mean what I've seen is it's unconstitutional you can't yes it's a direct tax on property which is unconstitution all they say is hey let's let's let's virtue signal and let's Point our fingers at these nasty billionaires and we should tax them they're not paying their fair share but these are people that are employing hundreds of thousands of people across the world yeah and paying a lot in tax they're paying a lot and will tell you he pays a whole the company you know a lot of these are IL liquid anyway and yeah they will occasionally sell like Elon Musk has paid more money in tax and I feel like he's been more transparent than most people about it there's just no competition and no Marketplace when the government's involved they just make the decisions agreed and they are not business people they don't know how to run a business it's completely different so I don't know I think I think we should solve it guys I agree we need we're the three most unlikely folks to jump in there and fix this but I think we could do it I think we need Doge yeah Department of government I thought you me Dogecoin I was like I don't know if that's going to help at this point no I'm here for it no I I think we need Elon to go through 100 he also spent 44 billion on Twitter so how come he trust his financial I I actually don't think that was okay so In fairness in Fair well let me say this he did not do that to get an Roi at a certain point I think El musk was like it was not a principal it was of principle and yeah freedom of speech which he has gone on the record and said so essentially that was just like a luxurious purchase for him which he could probably spare that money which is the ultimate Flex it is yeah and I also think that they yes he did overpay but they have been doing well so it' be interesting to see it's interesting to see he cut like most of the staff and Twitter is still running just fine you can still TW last I checked I can still tweet I heard that he's lost about half of his value from Twitter M so only lost you know 22 paper um I don't think he's concerned he's having a good time he's probably got good write-offs from that I don't know mhm and he has his own platform have you guys interviewed him no we would love to all right Elon I know you're watching this episode talk about the national Deb Elon is the number one dream guest yeah we would love to just talk about the national dead that would be the number one thing all right for an hour just Elon National dead I can text him right now you know you know what's interesting is Warren Buffett said the way we can solve the national debt I don't know if you guys saw this clip but it like went viral recently for some random reason is we need to end like lifetime politicians and if we don't get into a budget surplus by the end of people's terms then we just swap them out so you cannot continue to be a congressman or a congress person if we are at a budget deficit that's impressive I'm all age that'll actually light a fire under him you know rather than just letting him do just resort to short-term measures to temporarily boost the budget like let's say just upping tax one year yeah or finding shortterm then who's going to vote them back in if they took a shortcut that hurt the American people that's a good point yeah I think we try it I think term limits are I don't know why we're still a budget deficit honestly think that we should do is is not be in a surplus or a deficit but purely just let's break even every year that' be we don't have to make money that's I mean that's the next step that's the next step Break Even let's just spend what we make yeah the idea government making money and having profit that's a slim chance In Our Lifetime right Social Security is also a big one that is the biggest scam that one's scary and I how much you pay into that and then how little we might and will get funny I saw on Twitter that uh for for the average person paying into Social Security if you maxed it out every single year your benefit by the time you're like 70 assuming you waight is like $5,000 a month it was like $4,800 a month but if you just took that money yourself and invested that you would have $30,000 a month if you didn't pay social security ever in your just invested that investment yes from the age of like you know 20 something until 70 $30,000 a month versus the $4,800 that you get instead from the government very poor return hor your money in Social really what you're paying for is the other people before you it's a it's a Pon and it was it was never meant to replace your entire income it's like 40% and so most people see is there the average payment uh from the Social Security right now is 1,700 bucks some people are seeing 900 bucks and they're wondering like I thought this was going to float me and we get calls on the ramsy show this is like not anecdotal this is real life people are trying to live off of Social Security alone and realizing that they're on the poverty line if that so what's interesting I did a deep dive into the Social Security deficit for a video when it first came out uh people were supposed to take it at age 65 the average life expectancy at the time was 68 people were years people were only meant to take it on average for 3 years I would be in favor of abolishing Social Security but forcing an investment a wise investment out of your income to where whether you like it or not you're going to have some money in retirement I would love to see that the funny thing is the irony of Social Security is the first ever recipient her name is Ida May fer had contributed $24.75 into Social Security she ended up collecting $ wow that was her contribution and the amount she received her first check was for $22 and she had contributed 24 wow so they didn't set it up wisely to begin with it sounds like no it's about a thous a th X return for Ida good for her though she definitely made out well that's like a lottery she's honestly probably the number one investor of all time is the first person to ever Social Security that's honestly probably true Graham's jealous of those returns yeah that's fantastic yeah Social Security is a scam it is that's all I'm gonna say okay what would you say is the most effective way of making $1 million although before we go into that if you guys weren't aware I got a coffee company it's called bankroll coffee and our goal is to bring you the highest quality coffee at the most affordable price now as far as delivering on that promise I had to do a ton of research on the best e-commerce platforms to use and that is where our sponsor Shopify was there to help Shopify is home to the number one checkout on the planet with way less carts going abandoned and way more sales going for example Shopify is a service called shop pay that lets customers save their email address credit card shipping and billing information which boosts conversions up to 50% and if you're into growing your business your Commerce platform better be ready to sell wherever your customers are scrolling or strolling on the web in your store in their feed and everywhere in between all in all it is very clear that nobody is selling better than Shopify so if you're ready to upgrade your business and also you want to use the exact same checkout that bankroll coffee uses you can sign up for a $1 per month Tri Tri period at shopify.com all lowercase again that is shopify.com to upgrade your selling today at shopify.com just $1 to try it out highly recommend it thank you so much Shopify for sponsoring this episode and back to the podcast what would you say is the most effective way of making $1 million effective that's an interesting way to put it uh I mean depends on your skill set and and the timeline because if you want to do it effectively over 30 years it's going to be a lot less hassle a lot easier than trying to do it in five years uh one of my most viral Clips on social media I was talking to a kid he called into the Ramsey Show he's 19 he said Hey how do I turn $100,000 into a million dollar by the time I'm 26 or 25 I said why why are you trying to make 900 Grand on your money in in five or six years and she said I I don't know it's just a question there was no real theory behind it no real goal behind it he was just it was out of fear he just I need money now while I'm young cuz I'm scared I'm going to end up like my parents or retire broke or do something I hate so I think when it comes to that question you've got to look at your motive behind it and the urgency behind it and so for me the way I actually did it it took 9 years I invested in my company 401K 15% I was debt free with an emergency fund beyond that I got a reasonable house small mortgage paid it off aggressively that house appreciated in value rolled that into the next house kept investing 15% and that's all I've done and over time the home the home value that's completely paid for 100% Equity plus the investment accounts that equaled a million dollars and that took N9 years so the most effective way is investing 15% of your income and getting a house and paying it off those two things combined are all you need to have a net worth of a million dollars now if you're wanting a cash millionaire meaning you have a million dollars in cash well your savings rate is going to be more important than the return if you're trying to do it in a short amount of time because the chances are the Market's not going to give you 500% the chances are you didn't get in Bitcoin 10 years ago and now it's thousand deed and so I would say take as much of your income as you can live on as little as you can and throw the rest into the market into an index fund outside of retirement if that's your goal to have it in the next five or 10 years because basic math says you save 100 Grand a year in 10 years you'll have a million even if you didn't invest it just in a checking account and so if I can then invest that money I might be able to put 500,000 in and it can grow to a million over a period of time so the most effective way to me for the every man is investing into the market into mutual funds and index funds that's the better way to do it um with your own income I don't know of a cooler way only fans that's one way I I don't know if you've seen what I got going on not cut out for it I'm much more cut out to give Financial advice on YouTube how about you guys do you have any other strategies that you're not you're gatekeeping effective way would be I mean it's it's I don't want to say guaranteed but it's a hard thing to fail when you're just saving up money and investing it into an index fund so I would say that's probably the most effective way although that's not the way that I would tell my friends the way I would tell my friends would just be continue to work on your skill set to earn more money yeah uh because you know although yeah sure you can end up making a million dollars the the former way it would end up taking a while uh so I would just say yeah build up your skill set try to earn a lot of money then invest the money and hopefully that grows as well buy assets not liabilities and then you'll end up being worth a million bucks yeah personally I think online sales because it's scalable and anything with sales you could get good at it like you don't have to be naturally great at sales are you saying like start a a store like a Shopify or are you saying being a sales job I think a sales job is really important but if you if you could merge sales with something that's online sales and marketing sales and marketing something like that so figure out what a product a lot of people want is and get really good at selling it yeah yeah no that that's a great way again that's a skill set I don't have to go like go sell something on Amazon and sell a bajillion of it and make the spread that's not in my wheelhouse not something I'm even interested in doing what's interesting about the question though I love to ask this this is my new favorite question to ask anybody who has a financial goal I say and then what you make a million dollars and then what uh is your life magically better do you retire on a beach what is the purpose behind this I love asking that because it gets to the heart of that person and what they're really after because I can usually change their entire goal based on what their motive is I can usually go oh you just need a job you don't hate you don't need a million dollars in six years you just need to not have a toxic leader and to do something you're passionate about that you're good at and have someone recognize that and make 50 Grand a year that's a great way to put it so that's I like that a lot have you guys ever thought about like you get to a financial goal and then you're like okay what's the next thing you know cuz you guys are very goal oriented people you've achieved a lot of success in a short amount of time a lot of people look up to you have you ever thought like what is the point of all of this is it to get to the next million is it so that I can become a real estate mle is it so that I can retire at 35 what is the point do you have you guys set those goals for yourself I try to think about it every now and then but I also like having goals even if it's just for the sake of checking something off the BX Bo sometimes I I like that like I'll even go through and make a list on a Saturday of things I could do around the house clean the windows and just did that you like litter box check that off how do you how does Graham step and relax what does that look like being productive so really that's my way of you know what I had so much fun the other day I uh I paint in the closet so we yeah so we something no one will ever see in four years we've not built out our closets so when you get like a new construction house they give you the Bas the Builder special which is just a rod that goes on the closet that's it that's all we had for four years is just a rod and I told Macy after we got married that I'd built out the closets four years later I kept my promise we built out the closets but when they ripped it out they say oh no we don't we don't touch up that you know all the the paint and everything that was just ripped off so I went to Home Depot and uh I got paint and I color matched it I got some spackle to like fill up the holes I spent like three hours painting the closet and it felt great I but I loved it I I put on music and can you tell us what music I think that's an important part of the story who Danny Elfman Danny Elfman wow you're a soundtrack guy yeah love it I love that about you so that's an interesting point there's a quote that really stuck with me that made me question everything because I I can't help but be productive and helpful and it's from my friend Ian Simkins and he said if busyness is your drug then rest will feel like stress MH and it I was like oh I'm bad at resting because it stresses me out to just be yes and I feel like that's my next life goal is to figure out how to just be and now that I have a one-year-old it's really hard to just be just to be present and not feel like I need to be doing something more I need to be more helpful I need I'm going to check my phone to just be in the moment is so difficult for me and I realize it's why uh I don't enjoy a lot of things anymore because in the moment of enjoyment I'm just going I should be doing something more productive or I'm overthinking the moment or I'm I'm watching a movie and I'm wondering how much money did it take to pull off that scene and what did the actor I can't just be have you guys struggled with this or is just me am I going crazy I used to a lot a lot a lot and this is this is interesting but I I had a friend I still have him he's still my friend but uh he was so happy and positive and like optimistic all of the time and I always like observed this like subconscious I guess like aura that he had around him and then finally after observing this for such a long time I asked him like hey why are you so like positive all of the time and uh happy and outgoing and just like like how do you do it and it doesn't seem fake like it seems real and he said well to be honest like I just read a book that helped me change my perspective change my mental framework and he told it to me and it's called The Power of Now by eart Toll and I read the book and it helped me learn how to be present the idea of the Power of Now is to not focus on the future or the past but to be able to live in the present moment because the past doesn't exist anymore right and the future doesn't exist yet because you really don't know what's going to happen the only thing that truly exists is the second that we're in right now and this book kind of like reiterates that and reinforces that framework which helped me enjoy the present moment and I guess not stress myself out so much with things that don't exist like the past and the future wow you should hand that book to our our friend Graham and read I'll take it next you should read The Power of Now okay I'm next then it it just didn't help me he didn't hit very very very far on the other side but also I think that realistically Graham wouldn't take that book as seriously as I would have liked him to like for me when when I when he told me about this book like this is something I had observed over the course of several months and I was so interested in that finally when he gave me the reveal I was like okay well I better like really listen to this book and although it was a little bit Whimsical and woo woo like every paragraph if I don't if I didn't understand it I would reread reread R because I really wanted to try to be really connected with it part of that I think is you have to have a pain point that is painful enough that you're like all right I want to explore this I want to overcome this and for Graham that that paino isn't really there it's not a problem so same with if you read my book Breaking Free from broke and you don't feel like you can do any better financially you don't feel like you have any financial problems then you're going to read the book and go yeah that was fine good little witty some Financial advice in there it's cool but if you are hungry for the material and you're going I'm tired of living this way I want it to be simpler I want a more peaceful path to getting build wealth I don't want to be a part of the system this book is going to be like Mana from heaven and so that's what I think the difference is when it comes to pain points it's why people call to the show and they want to justify their own decisions and we don't give them the benefit and so we hang up and go we didn't help that person cuz they didn't really want our help they wanted us to go you're doing great just keep doing what you're doing do nothing different but when people are hungry for the advice and they're really in a point of pain they are willing to go sell the car the next day they're willing to make those sacrifices and I think the that's true with anything in life that you want to grow in yeah what do you think the biggest wealth killers are is one of your most popular topics oh yes America's number one wealth killer the video that we did on that F very first one was on car loans and it's because of a trend that I kept seeing as I wrote the book I was comparing all the debt levels of a Consumer Debt in America and we all know we've heard the number what 1.7 trillion in student loans there's a crisis out there and then I looked up and I saw that car loans were meeting student loan debt it was at 1.6 trillion when I wrote the book and I was flabbergasted how how did we get here like how did we go from a car is a necessity from A to B cars are you know for a new car back in day it was like 25 Grand was a brand new that was a nice car and now it's normal for someone to call into the show and say I bought a car we have $50,000 loan at 9% interest on this car and it just blows my mind and so I think having a car payment keeping a car payment for your whole life which is what most people do is the number one wealth killer because if you freed up that payment you could invest that instead you could save it and upgrade your cars in cash without ever paying someone interest while fully owning your car and and so breaking down the math of that was mindblowing as far as wealth Killers go the other ones we can look at you know by the numbers and go okay student loans are wealth killer credit cards are now creeping up 1.2 trillion in credit card debt you guys don't want to talk about that because you're the responsible ones you don't have credit card debt but a lot of people struggling with this type of debt crazy interest rates the average is now 22% or more on these credit cards and so the ankle biter ones that are sneakier are things like the uh B now pay later programs a lot of the younger Generations are saying I don't want credit card debt no thank you but I'll put all of my my entire cart on a firm and afterpay and I'll just figure it out later and what happens is you just kind of add it to your tab and at the end of the night you go oh my gosh how I have a $300 payment to afterpay for all this crap that I thought I needed and most of it is just frivolous crap it's clothing and entertainment and electronics and stuff we don't need and so those are the the major wealth Killers I'm seeing with younger Generations is the buy now pay later and across the board car loans I think apply to almost every American most people don't think they can even buy a car in cash they think they're going to die in a paid for used car that's the truth an interesting thing on the cars is I feel like cars also just haven't gotten a whole lot more reliable or better in the past like 20 years sure they've gotten safer that's like the main thing I feel like that's a perk but I was on r/ buy it for life which is a great Reddit thread and or uh a subreddit and I was looking through that and a lot of the top posts are people driving like you know Honda Civics from like the 80s and they're like I bought 40 years ago it has 400,000 miles and it runs perfectly well it runs perfectly but I feel like nowadays like even if you buy like new Toyotas which Toyotas are like you know pretty reliable if you don't like maintain them perfectly fine they end up just having issues I still think people are choosing unreliable cars and then complaining about reliability there's also this fallacy of the paranoia of well I need to be in a safe reliable car so therefore it needs to be a $50,000 new car and I dispel that myth in the book I talk about how new cars can be unreliable they can have issues they can't have recalls the insurance is more expensive um they have fa fancier features they have to ensure and so yeah that's going to come with a higher price point versus buying something used you know like we we're we're all Tesla guys now I bought my Tesla in 2021 and it was a 20 13 so at that point it was it already had seen some things you know it had four owners it had 160 something thousand miles and it was a gamble it was a gamble I was willing to take if this car imploded I was like all right that hurt but I'll move on with my life because the price point was so low it was at you know the MSRP on that thing was probably what 80 90 grand at the time in 2013 and I bought it for 20 something Grand so I was willing to take the risk and it's panned out I still drive it I'll probably drive it until it can't run any longer which I don't know if you guys have done the research how long can these electric cars go Tesla's half a million or more yeah and I'm at 190 so I'm I'm just barely seeing the life of this thing other than battery degradation which it's gone down 20% over the last 11 years now um I think it's going to keep riding on into the sunset so I I think people make excuses when it comes to the cars they buy and purchase and you can buy a $112,000 Honda Accord and it's a great vehicle that will last you a very long time maintained well and you don't have to go finance a $60,000 kellu ride because of safety features I call BS on that you're trying to look good you want a flex you want the fancy smell go get your car detailed for 200 bucks and you'll feel like it's a new car now when it comes to giving advice to people how do you balance being nice to them or being maybe a little tough love uh because you recently collabed with Caleb and I saw by the way his video the the driving video incredibly well for you it it was what the people of the internet and the algorithm wanted was Millionaires and cars getting coffee with Caleb Hammer yeah I I think people see us as two sides of a coin yeah uh we're both young nerdy guys with glasses trying to help people we help them in very different ways and so um when it comes to the collab or being nice and how do I know when it's tough love or nice I Look to Dave to be a great model of that cuz Dave is known for tough love he's going to jail at you get your butt off the couch and go to work but it's It's All Out of Love at the end of the day Dave truly no skin in the game other that he wants to help you transform that's his life first is Romans 12:12 be not conformed to the pattern of this world but be transformed by the renewing of your mind so Dave's big on you change your mind you change some actions you can change your life that's all he's trying to do in the call now a single mom calls in who has you know had the rug pulled out from under her life happened he's not going to yell at the single mom he's going to treat her with a different level of compassion than an 18-year-old who wants to argue and complain and whatever about his life so the way I see it is whatever you called in for I'm going to be compassionate I'm going to give you the benefit of the doubt as soon as you put up more walls more excuses you're not really wanting to change you're not really wanting the advice that's where I begin to lose patience and I begin to go a little harder on you if you're not if you're not getting it we're also up against the clock we got to remember this is radio we don't have the benefit of going an hour and a half with these callers we have 3 to 5 minutes with a caller that's not a lot of time to have them unpack their entire situation and have two co-hosts rattle off some advice and get to the next caller so the way I look at it is I lead with compassion if they're making excusive they're getting impatient they're wanting to argue and debate that's when I go into a little more tough love and go listen you called us for advice you called in because you have a problem you want to solve I gave you the solution you are not happy with it and so this happens a lot with callers lately I feel like they're calling in justify their decisions they want to just bounce an idea off of us they want an easy way out they want a shortcut and we're unwilling to that's not how the show works it's always been you got to sacrifice you got to live on lesson you make you're not going to pay off debt by taking out another piece of debt it doesn't work like that you've got to get out once and for all so if you want to change we're here to help and if you don't I'm going to give you a tough time what types of people do you see actually make a change we talked earlier about the pain Point um and you have to have the I've had it moment that's what Dave calls it where you drew a line in the sand and you said I know my life is worth more than living in debt for another 20 years or my husband and I have been in debt our whole life and we've never had a great marriage and part of that is because of money problems those are the people that have the the best chance of helping them and so you can tell in a call even as a listener you guys could listen to a call and go oh they're actually going to do that you can hear the light bulb go off you can hear the aha moment you can hear the excitement versus the if we at the end of a call go how does that hit you we have we have not done a good job convincing them and they are not ready for that life change and that's okay uh but that that is one of the hardest parts of the job that's the most frustrating is you want to help every single caller that comes in you want to give them the aha moment where they go change their life for the better and take that right Next Step for their money and I would say 70% of the calls these days they're not ready for it we gave them the right advice and maybe we weren't Winsome enough maybe we weren't as persuasive maybe Dave could have done a better job if he was here on the show but at the end of the day I sleep well knowing it's the same advice I would have wanted the same advice I would have taken and the same stuff I would do what are your thoughts these days about renting versus buying if people call in and ask what's better better I think is is the fun funny word there is it better to rent or bu well depends if you're broke it's better to rent if you've got money and you're in a good financial position get off the sidelines buy a house get your foot in the door it's a moving goalpost the $400,000 house 5 years from now is likely going to be more it's going to be 500,000 or 550 and so I want people to buy a house as soon as they're financially ready and it's a simple strategy here are you Consumer Debt free do you have an emergency fund and do you have some good reserves to put down on the house if you're doing it that way and the mortgage isn't going to be 60% of your take-home pay like some of these callers uh have situations then go ahead buy a house and do it for the right reasons do it in the right area do your research work with the real estate Pro and do it the right way but most people are so frustrated with pent up rage about renting that they're just willing to do anything to get in that house at any cost and it becomes a burden instead of a blessing that's what pains me when people call in they've made that mistake and how do you think the election affects most people that call in in reality this election whoever is President will have little to no effect on your personal finances how much you make how much you take home your spending habits largely that's still going to be the same as it was uh we can argue about well what if they change a tax law which largely affects the ultra wealthy um what if it affects other policy that could trickle down and affect me at the end of the day when you look at me shopping at the grocery store and me paying my bills there's very little that a singular politician can do in the White House that could affect it now state and local politics way more effect on that uh we have a bill right now I just saw it in one of my neighborhood Facebook group and there's a bill that could increase all of our property taxes and that is a much scarier thing than the person in the White House chiming about some student loan forgiveness that will never happen so I don't think the election is going to affect many people um it'll affect them emotionally there's other policies that aren't Financial but when it comes to personal finance which is the world I live in it's still going to be the guy in the mirror with the same income the same job the same habits the same lack of budgeting that's what's going to hold you back not the person in the white house now what do you think the government should be responsible for um upholding reasonable laws that would that's that's all I expect out of a government and uh give me my driver's license in an efficient manner and let me go about my my day in my way the problem is I think the government has now overreached they're trying to cause people to become dependent on them and go hey you need you need us so that this is why we need to be more involved more regulation and sure I don't want to live in a chaotic Society I want to live in a organized society and so it's kind of like the HOA HOA can be great it can uphold your property values it avoids Joe Schmo having an RV and Chaos in his front yard but it can also mean a lack of freedom to do what I want to my house so I think there's a reasonable level of involvement and I think overall we're seeing the government want to step in more and more to solve things in ways they are not capable of solving and not good at solving in a way that the private sector could solve much better you know that and that's kind of where Elon comes in and goes guys you got to think about this differently if you think of it like a business it should have been bankrupt 70 times over by now based on the spending in the revenue so a lot of it to me seems like bribery from both sides trying to get votes of just we'll lower your taxes if you vote for me oh well if you vote for me we'll give you a $10,000 home buyer credit or if you vote for me we'll do this if you vote for a politician for something they're going to do for you you've already lost you've already given up your agency as a human over to someone who truly does not care about you that's the frustrating part for me and so truly I don't care who wins the election my life will largely be unchanged uh wherever I cast my vote and I think I'm totally okay with that and I Will Survive regardless of who it is as long as they don't truly cause World War III and end the world we will survive and live to fight another day and so that's kind of my stance on all of this stuff is it's fun to talk about policy but when it comes to a certain politicians changing your life it's not going to happen like you have way more ability to change your life than anyone out there and you guys know that you're no politician was the reason you're here today because you guys hustled your butts did it for a long period of time and entertained and served a lot of people that's it speaking of a lot of government overreach do you think that there should be a minimum wage oh do I think there should be a minimum wage should the minimum wage be nothing and just set by the current market rate whatever someone is willing to accept is the wage I mean that that is how I think largely economy's been going because when you look at the federal minimum wage you can't live on that anyways and so in no point in history was $7 an hour going to give you a wonderful life and if you look at old you know you can look at well in the 1940s all you just needed a nickel and you could buy sure we can look at the old days but in today's economy no one is making it off of seven bucks an hour or even $13 an hour like that's 26 Grand a year and so I believe that you're much better off going not what is the minimum wage I can get on by for the rest of my life but what are ways I can increase my skill set and Marketplace value to go get a $20 an hour job and instead of the 15 what are the changes I need to make about myself to get me there and so I I think the argument about minimum wage is just a it's a losing argument because who wants to stay there it I I think a lot of this got brought up recently because of California's $20 minimum wage for fast food workers and it was just isolated originally to certain fast food chains and from what I've heard is that it's not just impacting the fast food work because initially the thought was that you know it's just there and then everything else will be you know the normal minimum wage what I heard from someone uh was recently impacted by this who runs a a smallish business is that all the employees expected a raise and this is not fast food they all expected a raise as well because they said why am I working for $16 an hour when I could work a fast food job and get 20 yeah uh and so I'd rather just work the fast food job and get 20 or you know yeah but part of it is but but a lot of it too those fast food workers uh I think are getting their hours cut because there's just there's not enough profit there to be able to support part want to address is as a business owner what do you think you got to do to keep running this business and not go bankrupt you have to increase your prices if you don't increase prices and you've increased your cost of Labor well very quickly you're going to run out of money and so that's what people aren't understanding is that if you increase the minimum wage what happens is everything gets inflated cuz every business owner in America or in that type of world is now going to have to increase their prices enough to pay that person that wage which means everyone else is going to suffer and by the way the person working the minimum wage job also has to pay inflated prices so now it's we're just moving everything up so now your groceries cost you know 10% more because your wage went up 10% more yeah and so it's really not doing as much as people think it is I'd rather see people go how do I get away from a $10 an hour job and go make 20 instead what are the skills needed what are the jobs out there what are they requiring how do I develop myself to get there yeah it was funny we asked Kevin o the same question we said what should the minimum wage be and his answer was said z0 I knew it that is such a Kevin answer Mr Wonderful whatever someone is willing to to take that is the that is the price I mean yeah where does it end if I'm going to pay a babysitter do they go well minimum wage is $25 an hour now so you got to PID 25 bucks an hour to watch my you know baby sleep through a monitor so I just don't think it plays out in reality and it's not because I want people to stay broke it's because I want them to want better for themselves now when it comes to taxes do you think that there should be a flat tax or abolish the tax system and do an import tax whoa I'm not as privy on the import tax how would that work this is something that Trump uh proposed oh the tariffs so other countries send their stuff in here we tax them wouldn't that just cause the prices we pay for all of that to get jacked up they're saying that the money you save would offset that so if I'm the other country I'm going to just charge more for my thing to the US if I know I'm going to get taxed more that's what I would then fewer people would be buying you know products from other countries I think his idea was just to get more companies in the US to be creating those products sure and I'm all for that but I don't know that the US can compete at a level to where it's going to make sense for me to buy a $70 t-shirt because it was made in the US mhm so unless we can get our manufacturing to be competitive and to still keep profits here it's always going to make more sense to get it cheaper outside of here so I don't know if that I don't think that's the solution I would be for a flat tax though I think that's a much more fair system it still causes the wealthier to pay more because you know 10% of a million dollars is more than 10% of $100,000 and I do wonder what that would do for the economy um and it would avoid all the back and forth of you're not paying your if everyone pays 10% we got we got a quality we did it we did it what's interesting is that Warren Buffett recently sold a big chunk of his stock and a lot of people recently were speculating does he know something that the rest of us don't is he timing Market are we about to see a stock market crash he came out and clarified which I found really interesting that the reason he sold wasn't because he thought that there was a stock market crash or that something was looming it was because he wanted to lock in long-term capital gains before a potential increase oh how smart is that and he did this by the way months before Cala came out with her 28% Capital this has been looming whole capital gain stat right warrren Buffett is so smart I think he's thinking a few steps ahead of everyone else like Nic aado might be two steps ahead Warren Buffett is three steps ahead you got to respect that Hustle the fact that he's selling makes me tend to think that he has an inclination of what's going to happen which is that long-term capital gains tax rates are probably going up and he's getting ahead of it now locking in you know 20 to 23 point you know 24.3 or whatever it is after the investment tax yeah well on the on the amount of money he has like those numbers matter for the average American selling their stocks which it doesn't even affect not a big deal to go from 24 to 28% but when you're talking about hundreds of millions of dollars it adds up yeah realistically I think for most people it's not going to make a difference but if you're worth probably more than $10 million you got to start looking at the tax rates and thinking hey do I want to lock this in now guaranteed or take a risk in the future so you got to be thinking about this gr if you're not Graham keep scrolling you got to be thinking about this what are you going to do sell off some real estate no okay you're hanging on I I'll I'm going to hang on until it goes back do does the election affect you to yeah I would say it does in what ways taxes I would say it's probably the biggest one um if tax rates go up it directly affects us probably the most we talking income tax or other Ty ta income taxes okay I would say that that's it it's not going to be the end of the world I mean listen if taxes go from 37 to 39.6 I don't care uh I think that's probably the most realistic outcome of anything is probably it's probably that it's not the end of the world but it is something an extra 2% of your income getting taxed that's probably the wor case realistically uh the capital gains could be iffy going from 20 to 28% but it depends also if they cap it like you know if it's you know incomes over 10 million a year it's it's not going to make a difference to me but you know it will to somebody well it's one of the reasons I'm I'm a big fan of my Roth retirement accounts is just knowing ahead of time I paid whatever the tax rate was today for my income and not worrying about what my income will be in the future so if I have a Roth 401k with 2 million bucks that's $2 million of net money that I get to spend and enjoy without Uncle Sam getting his grubby hands on it so that's my mentality around the Roth and I don't want to think about well what if you're income's lower in retirement I'm like what if it's more what if I'm spending like crazy because we're having a good time I don't want to be limited in that regard the only thing I worry about with those accounts and it's doubtful that it'll it'll happen but they could always say hey we're changing the rules now and now in and now instead of 59 and a half now you got to be 65 to take it out or like little things like this they could always say well I don't know how the weasel you know yeah I I just have a feeling at some point someone's going to try to attack these accounts not to say that they'll be successful at it but there might be an American by then we'll see if the world still exists by then you know that's probably smart I just take one day at a time that's fair I hope I get to see my daughter you know grow up and go to college get married and do all the things but at this point fingers crossed out at 25 moving out at probably earlier than that I moved out at 20 I moved from Boston to Mobile Alabama finished school did you guys live at home for a while Beyond 18 no I moved out as soon as I went to college which was 18 years old or so 20 okay how about you gr were you early 20s okay and I think it worked out for all of us mhm since you have a lot of hard takes with regard to finance of your financial beliefs which ones do you have the least amount of conviction on for example for me the numbers suggest it's better to pay with a credit card right because you get the cash back however I also understand that there's a psychological advantage to being debt-free and how that and how that increases the money at the end of the month so I wouldn't say uh I have 100% conviction with regard to you know you should use credit cards but I would recommend that people leverage smart debt it'd probably be like a 80% conviction for friends to use credit cards I think when it comes to investing uh we've had you know we believe to be Diversified across four different types of mutual funds and retirement but a lot of people think I'm anti- index funds I'm a big fan of index funds and I think in a brokerage account that's where I would be parking all my money isn't in these index funds and so that's one the other one I would say is the if you called in and said I have a 30-year mortgage it's a very reasonable amount of my income I'm not going to yell at you so that's one that as far as convictions go I don't think the 30-year mortgage is going to kill you I don't think that's like a wealth killer in that regard what it does to you psychologically is it gives you a longer time horiz to hang on to the debt which I think is what actually is hurting people they say I'll pay it off like a 15 they'll say I'll pay it off early but the stat show they're not and that people with 15year mortgages are paying them off early in the millionaire study we did over 10,000 of them we found the average millionaire paid off their home in 10 years and so that tells me they don't hang on to their mortgages but as far as 30-year versus 15 we have a pretty staunch like we're not going to yell at you the only type of debt we don't yell at you for is a 15year fixed rate mortgage where the payment is no more than a quarter of your take-home pay I still believe that that's still what I've done it's what I would do in the future it's what I recommend to everyone but if you called in and you already had a 30-year I think there's worse things you could do financially as long as you have a goal to pay that off credit cards I still I I'm still convicted that they are the entire industry is scum they are meant to screw people over and that 99.9% of people don't have the psychological IC and financial wherewithal to play the game perfectly to truly win I still think you're going to spend more on the card I don't think the rewards are worth it and I think people like Graham can gamify it because they have an astounding income and an astounding amount of frugality that he can actually he might be the guy you think so you think it is possible if you're Graham if you're not Graham it's not what about Jack Jack um I think he has a tendency toward uh hedonism you know the man likes things and I think you think so more than Graham I think if you're comparing the two I think I like things more than Jack but you're unwilling to pay for said things like if it was gifted to you or you can find a way to get it for free or cheap so I but I don't think you're the you're not the target demo you you are the guy who is truly quote unquote beating the system but I don't think that's possible for almost anyone you have to have an incredibly High income with an incredible amount of discipline and frugality to actually make that work what if you just have the discipline and frugality you don't have a high income but you but you are so disciplined down to the penny could I still have become a millionaire if I used my credit card and paid it off perfectly and got some rewards probably but I think it was actually beneficial for me to use my own money and make different decisions financially I think I spent a lot less using my own money over the last 10 years than if I had used my credit card and got two% cash back or got a free flight because the truth is I would have chosen a different flight I would have chosen a different Airline versus trying to utilize the points to redeem them like it's Chuck-E-Cheese I just think you make different decisions and it's it's not Apples to Apples let's just say not to beat a dead horse let's just say that you are debating yourself about credit cards okay so you're going up against George camel that's an unbeatable match right but what would you say if you're really trying to put your best argument forward about being pro credit card if I had to debate myself George's the cross from me and I'm the devil's advocate going but George say I'm George camel um I would probably say get a secured credit card to where you cannot spend more than you actually have and still stick to your budget and look at the budget before you make any purchase ever and then and only then do you use that card is you know you're still sticking within your budget and you can't spend more than you make and have everything on autopay and even then I would still find a way to screw that up and other George would be like see told you I still think if you put him neck and neck you put both georgees in a race to wealth I think debit card George would win every single time I think he has a very different mindset than the other George who is trying to play a game that was set out before him you know what I mean like I'm not you're not running your own race if you're playing the credit card company game I don't you can't be focused on two things at once you can't be focused on I'm trying to get get out of debt and build wealth and I'm trying to get my 2% so I can have a nice thing how much more do people spend on credit than debit just overall we've seen a lot of studies it ranges from 10% more to 100% more depending on the study you look at and for every singular person it's going to differ U greatly depending on their income their habits where they're spending are they playing the games of the cash back the points all of that I've always been so curious how they account for some of the variables of the people who have credit because they need credit and carry a balance and therefore they they are more prone to overspending in general than the person who is financially responsible using a credit card I just think in today's world like 30 years ago you could probably get away with it or 20 years ago I think in today's world with how aggressive the marketing is with how dialed in all the digital marketing is there is no way that humans can truly counteract overspending over time that's super difficult and that's why I love the debit card I love the budget got something I want to mention okay who really smart for credit card companies the tap to pay tap to pay oh my God FR you know you know that they just did so many studies and and realize that it's less painful just toep than to stick your card in there and press buttons and I noticed this the other day of how easy it was was when Macy got that drink and I how much was the drink you don't want to know was it more than $20 25 a tip stupid gram wasid okay so in this is so stupid I thought it was this going to come up in marriage counseling I thought it was an no it's not Macy's fault I thought it was an open bar and so she's like oh you know I should get a drink I'm like yeah you know what okay just get one gets to the thing and then I look over and I see the person next to me getting something similar and they turn that thing around I was like I thought it was an open bar and sure enough it comes you know and I and I pay but just the little it just in that moment it made me think that was a lot less painful than sticking the card in or swiping there's something about the tapping that is a lot more comforting to me and I could see in that instance how tap to pay does not feel like money it just feels like and to be fair really have theat too and I think debit cards there's a similar psychological ease but the difference is you know that's your own money when I spend on a debit card and that bank transaction immediately comes through to text I know that just left my bank account and yeah there we are not $1.2 trillion in debit card debt we're $1.2 trillion in credit card debt and so you can't compare apples to apples and go well I spend the same if I would on a credit card the credit card has this whole portal to hell that can be unlocked at any moment so you so should you choose personally yeah I just think the credit card companies understood that inserting a card or swiping people now associate with charging money and a tap to pay is new and we don't have that same connection I think in 20 years from now people are going to have a connection with that and then it's going to turn into like a hand wve like we're going to all have a little implant in our in our hand you SE at Whole Foods they have the Amazon palm reader and that's how you pay you know what they'll do got it this is what they're going to do they have facial recognition like they do at the airport I'm excited about this cuz I'm I came up with a new thing guaranteed they're going to use this Jack guaranteed what if you have sunglasses they facial recognition that's so good now that you're going to have your face linked with a credit card and all you have to do is make eye contact with the camera or something like that we're just looking grab and go well you seen those in the airports where it's just they know they have all the They Char me once for passports you just scan your face now it's all there oh you're going to do that with payments you're going to be able to link your payment with your face show your face well Apple pay's tagline is cashless made effortless they know that the the more convenient the less effort we have to put in the easier it is to spend and that's that is the argument I mean it's just a further argument than from cash and debit to credit card the Amazon uh grocery store where you just go and you just pick it and it just debits from your account you're going to have one master account everyone in the United States is going to have it scan with your face fingerprint it's that easy yeah and you can't argue that spending someone else's money and getting to pay it back later is not easier and more of a win psychologically than seeing your own money leave you now whether it's cash or debit so that's really the at the end of the day that's the stance on top of the scum and I break down in the book I talked to an ex Capital One manager who said we run 10,000 experiments on consumers a year to get them to spend more to get them hooked on our points games and to gamify it all and that that was enough for me I went no thank you and for those Reasons I'm out what's a piece of non-financial advice if you could bestow this on all of the viewers right now to improve the quality of their life what would it be oh my goodness I would say make it a habit to put down your cynicism every day you wake up and that might mean not looking at the headlines it might mean doing the hard thing you know is going to make you feel better what I found as a recovering cynic a recovering pessimist is that it was so easy to look at the world through this filter of man this world is screwed up and I got to man they really need to do something about this instead to lead with a level of optimism and hope that is not unhinged but is actually authentic where it's going I know full well the world is broken and it's got its problems and I don't feel good and I got to go to work but instead to look at everything as an opportunity what what is the opportunity here and what is my part to play because you're right if you try to Take On The World at once it will crush you like a bug but if you just go hey what is what's the kind thing I can do today how can I get just a little bit better today at my job how can I be kind to someone who maybe doesn't even deserve it not because it's going to do something for them because of what it's going to do for me and I found the more I sort of displaced the poison and toxicity and the more I replace that with hope and optimism the better quality of life I had and that's I actually end the book with a chapter talking about hope versus cynicism because I think that's what personal finance comes down to do you believe it's possible to go to where you want to go if you don't why would you do it if you think you can or you think you can't you're right Henry Ford said that and so I think at some point you have to choose every single day it's not a button you can I wish I was as optimistic as Jack he's just an optimistic guy I don't have I'm like Graham we're very we're very like skeptical of everything like and I think the more I live my life a little more open a little more kind a little more optimistic the better my life is so that would be my non- piece of financial advice cool thank you so much thank you guys I learn a lot when I'm with you and I feel like I grow personally and I appreciate your friendship over the years thank you that really means a lot we'll link to all of your information to Down Below in the description including the book including the B check it out get the book even if it just is to rile you up a hate read if you will cool all right thanks till next time