Why Everyone Is Drowning In Debt (and how to get out) - Caleb Hammer

How do you describe what you do for work? >> Depends the viewer. If I'm talking to the nice little church lady, I'd tell her I'm helping helping young folks and some old folks with their money. If I'm just talking to just random person on the street, I'd say I'm yelling at a bunch of retards who suck with money and roasting them along the way and having a lot of fun doing it. >> I was going to ask why you get death threats, but you've kind of precluded that. I mean, I don't understand. Like, okay, if you come on financial audit, you would come through a multi-week onboarding process and give me all these things like, let's pretend you didn't want to me to make fun of your curly hair for whatever reason. You would tell me that. You would tell the producers that cuz we ask you in advance. >> Yeah. So, we don't bring it up. So, and then I get consent to make sensitivity about myself. Yeah. >> Exactly. So, why get death threats for making fun of things that someone gave me explicit permission to make fun of? Makes no sense. It's the being offended on behalf of someone who's not offended. >> I will never get it. I'm not the person. I've never been that person. I I don't understand it. >> Mhm. The white knighting. >> Yes. >> Yeah. >> The the moral hero, the you're on your moral horse and I don't know, you want your TikTok community to raise you up. I guess it makes you feel good. you get views. It's one of the my least favorite categories of people are those that their morality stands on the shoulders of other people that they're saying are worse than them. Like don't look at how good I am because I don't want that scrutiny on me. Just look at how bad they are and implicitly that makes me feel like a person that's of higher moral standing. It's pretty. >> Yeah, we had um when we were filming this episode, we had a guest on on our episode that I uploaded yesterday and I brought in one of my co-workers, employees, also friends, Tyler, black dude, big black dude, very intimidating, can beat the [ __ ] out of anyone. And like the guy where you were sitting is a piece of [ __ ] racist. Like an actual racist. He was like, >> "Did you do this on purpose?" >> Cast him. You brought a black person in with somebody that you knew would be racist. >> So the guy was sitting where you said and he said, "You know, I'm one of those people that says things that need to be said." And I was like, "Okay, pause." Brought in the guy that he would actually have a consequence. >> Oh, right. Yep. Yeah. >> Yeah. And he was like, "Uh, yeah. N word." So, I just said that, but you know what? He consented to it. Obviously, I wouldn't have my friend go through a situation he didn't like. He even reacted to it on his own stream later that day. He loved it. No, >> he just loves being called the n-word, gets off on it. >> No black I we we scoured the internet. No black person was like offended anywhere or there was a lot of white women that were super offended on his behalf saying that he should sue the show for having to go through that. That's workplace harassment and all that stuff. When he's friends, we're I'm friends with him. We're literally just having fun together making fun of the dude that was a piece of [ __ ] in front of us. He and I were on the same team having a good time and it was this white lace upset on the internet. >> Kind of blows my mind that people want to step into that environment cuz it's very intense. It's not opposite someone. Originally it's one-on-one and then it's oneon two, but there's also maybe someone behind the scenes and you know that there's all of these people on the internet that are going to see you do this thing. The psychology of someone that's prepared to go on a show like that >> and go headtohead with someone on their home turf and be an [ __ ] I It's kind of impressive. It is. It is. It is almost impressive. I don't think that I would be very good at if I was an [ __ ] doing that and being on this side. It's like if you are an [ __ ] by design, you're usually trying to keep it quiet so people don't realize. People aren't advertising their assholeery up front. But that's what makes it fun though is that anyone who's seen our show or anyone who comes on the show has seen the show so they already know I'm an [ __ ] Then they watch two onboarding videos. when they get sent to them, when they have to watch in the green room, and I'm like, "Hey, I'm an [ __ ] I'm going to make fun of you. I'm going to yell at you telling me what you don't want to do." So, honestly, besides that piece of [ __ ] racist, cuz I actually don't like someone who's actually racist. Um, every other guest that has come on the show practically, other than a few here and there, I respect the [ __ ] out of cuz yeah, that's crazy showing up to a show that a lot of people are going to see that you're going to get goofed on, but they also do get resources and the vast majority do change their lives for the better afterwards. That is the fun effect of it. They get to go through the whole cycle with us. And >> I think it would be crazier for them to sign up if everything no matter their say was on display. Since they get to say what they don't want to talk about, it gives them more control, which if there is something that actually would impact their life or their job or their family, they can call that out and not have that in the episode. So, they do have that level of control, but they're still very brave and I have a huge amount of respect for them. What is the process of getting access to somebody's financials? And how do you know that they haven't kept something super secret behind the scenes that they haven't shown you? >> Right. Well, it would be difficult for like a checking or savings account, but we do get them to send us their credit karma with, you know, important things bleeped out. Their credit karma. >> Oh, credit karma. Well, it basically shows your credit report for the most part. I mean, it's kind of simulated. It's not perfect. you're not getting your like requesting your three free credit reports every single year or whatnot. But um it's the app that many people use to actually see what's going on and the impact of their new debts are opening, their hard inquiries, everything like that. But if we get them to send their screenshots, that way we can see if there's debts that they don't even know about. Cuz often times there are debts that they don't know about, collections that they don't know about. So we're able to hold their feet to the fire that way. M do you think it's genuinely harder for young people today or are expectations the problem? >> It's harder to do certain things. I mean, you're not going to be able to do the single income household thing like that's going to be there's going to be harder things, right? That's going to be harder. Buying your first home is going to be harder. Um, you know, getting your first car might be harder. It depends, you know, how you do it. That one's definitely a hit or miss for sure. um that that's going to be harder. But being independent in terms of groceries or rent or getting a comfy office job that is relatively decent paying like we've never had it better than ever before. Now you can take a snapshot in time this year, this period in exact time. Yeah. For college graduates, it's objectively [ __ ] That's just an economic situation, not a general uh generational situation. Cuz 5 years ago, college graduates had a great they were entering the best job market in the history of humanity essentially when that pandemic money was just flowing from tech companies. Anyone could get a job. But now it's objectively not. But that's a period in time, not a generational thing. >> So the cost of practically every category of life spending as a percentage of income has dramatically dropped since the 1950s. Besides a few things that are very important, buying a house, healthcare, and borrowing for school, borrowing for school, do you have to do that? You know, there's different paths. We can talk community college, we can talk apprenticeships, trade schools. Okay? So, there's flexibility there. House, you don't have to buy a house when, you know, if you're a young person right now, you don't have to even and even if you do, that actually might be a worse use of your money than in just investing in the S&P 500. Healthcare, yeah, that one's [ __ ] Can't really control that one. That's a mess. So if something bad happens to you, >> what's happened to the cost of healthcare over time? >> Oh, just endlessly the premiums and if an emergency happens. Healthcare is one of those issues that's actually really interesting when it comes up on the show because I get very invested in trying to learn as much as I can about the personal finance categories across the board. But for healthcare, for some reason, I've just missed it because this is one of those things that was never my passion. So, I never fully dove into the reason, the why and how. I just make sure, you know, I have the general necessity, the the things that someone would need to make sure they're getting a halfway decent plan through their job and whatnot. Making sure their premiums aren't completely out of control, that they can afford their co-pays, that they have their highest deductible taken care of in the case of an emergency. But >> speaking on the cost of healthcare, you know, this is that's definitely out of all things in the financial world, not my expertise. And I said I said that on another podcast that hasn't come out yet. And now that it's come up in two podcast in a in a row, I'm just, you know, I need to educate the [ __ ] out of myself on healthcare cuz it's very curious cuz housing could talk about housing all day. Cost of college and school. I could talk about that all day, but not healthcare. >> It's one of the big three. >> One of the big three. >> Housing, healthcare, school. Yeah. >> You know a lot about the first the first and the last but >> there's a lot more that you can control. So I'm interested in the things you can control. It's very difficult for people to be able to control their actual health care situation whether or not they have a pre-diagnosis or there's only a few plans offered >> Yeah. Exactly. >> But school and housing there's a lot more control and financial audits more about what things you can control. It's interesting that you said as a percentage of earnings, the cost of living in almost all areas has become more affordable. >> Yeah. >> Except for three that are [ __ ] massive. >> Massive. >> And those three have done so much damage >> that they've managed to basically net detract from all of the gains that were made in everything else. >> Yeah. I mean, it's pretty brutal. But again, with the two that I can speak on a little better, house, you don't have to buy a house. So, you have more choices there. You don't have to buy a house fresh out of college. You don't have to go when it comes to the cost of school. There's so many different paths that include going to school. And that's local four years. That's community college. That's not going to private institutions or going to your dream school because it has the sports team you like. It's also has to do with if cost of college is high, you need to make sure you're getting a degree that has an appropriate return on investment. So, there's lots of choices there. So, those three categories are pretty brutal, but of two of them, you still have choice in it. >> Gen Z borrowers are carrying more credit card debt than millennials did at the same age, despite growing up with more financial information than any generation before them. >> Yeah. >> 98% of Gen Z say credit is important, but only 53% believe they have adequate access to it. And more than half of Americans have used buy now pay later services. 59% of those users were Gen Z. >> Oh yeah, that makes sense. Paying for CLA, everything. It's a very Gen Z thing. Tap to pay. Super easy to use those. They're at every checkout for any concert you go to, pretty much anything you want to do. Um, so that's not surprising. There is um I'm not I'm forgetting the term off the top of my head, but it's something like Doom Loop or something that a lot of Gen Z is kind of getting into where mostly because of the information out there and the algorithms they find themselves in, they think everything's going to be so bad forever, why not just spend the money? >> Why not just put it on their credit card? So, it makes sense. It seems to me like uh a big part of it is people being so unsure about the future and feeling like things are not going to get better that well [ __ ] it. It's almost like the end of days. You know, there's this interesting story about during the Blitz in World War II in London, uh the amount of casual sex that people were having went through the roof, but lingerie sales stayed the same. And it was just people thought, look, >> I might die tomorrow. It doesn't really matter about how sexy I look in bed. Let's just get down to it. And it's kind of the financial equivalent of that. I'm just going to dump it all. Which is this weird sort of uh recursive system. It's this self-reinforcing mechanism that if you have >> negative information about the economy and about the quality of life for young people and about how hard you've got it and the fact that it's never going to get better, that encourages people to behave in a way that makes the thing true. >> Yeah. Absolutely. >> Kind of wild. self it's a a self-fulfilling prophecy that kind of gets >> not made out of nowhere. There are real material changes, but it's certainly worsened >> and it's tracked. The University of Michigan does consumer sentiment survey uh and that I think they've done it since the 1980s and right now is one of the three lowest we've ever had. I think it was right when COVID kicked off, the great recession and now. But now is not even near great recession in any other indicator anywhere. It's not right when COVID kicked off when everything shut down and no one know what was knew what was going to happen, but consumer sentiment is basically at an all-time low. >> What do you think's going on? >> Well, we are stuck in those algorithms. You make money on negativity. Like even I have a documentary channel, more of a passion project, not much of a moneymaker called. >> It's cool. I like it. >> Oh, thanks. Called Front Page. Still getting the feel of it. But either way, I mean, the reality is the the topics that are interesting to talk about are the more negative ones. Super positive content isn't as interesting to talk about. For whatever reason, I'm not interested in learning about super positive. Not interested in talking about super positive. So, >> doesn't feel urgent. >> No, exactly. So, that's the information that's getting out there. That's the information that catches people's attention, keeps them in the algorithm. So, I'm not surprised at all. I mean, nightly news, other than one fluff piece, is usually just negative, negative, negative. even about the heat outside. It's like the apocalypse. Uh it's it's always just negative. So it's not surprising. That's what drives our attention. That's what drives the algorithm. So consumer sentiment will of course be lower, >> right? And that is impacting people's behavior which actually brings that reality, brings that imagination into reality or brings the news feed into your finances. Pretty interesting. >> Yeah. Even though consumer spending is actually relatively healthy overall. like this isn't the best year in our economy, but it's also not even close to the worst year. Things are relatively healthy. There's some bad things like I called out. There's the new graduates, bad job market for new graduates. And there's a lot of things at play there. There are a lot of things that play there. There's the nervousness of AI. There was the overhiring during the tech boom during COVID. They've cut back there. And if there's if there's no people leaving their jobs voluntarily, there's no jobs opening. and the people that are leaving their jobs in Texas are the one getting laid off and they're not rehiring someone who's getting laid off. So those job openings that were there during the pandemic aren't there. So there's actual negative things happening right now, but it's not the overall economic situation. We're still having okay GDP growth >> postinflation. Um the war in Iran done allegedly. We'll see. Is it >> he signed the uh idea of peace or something yesterday and so did Iran, the leader of >> me? That's like a guy with erectile dysfunction saying, "I've signed the idea of erection today." Yeah. >> Signed the idea of a of a penis. I want to get you to react to a financial case here. Can we pull up that Tik Tok? >> I've had such a bad financial burden the last couple years. So, after meeting with attorney and doing lots of research, I realized that filing bankruptcy really isn't as bad as it's made out to be, and it was truly going to be my best bet. Decided to file Chapter 7. And you know, truthfully, my consumer debt really is not that bad. A lot of people have it a lot worse financially, but for me, $91,000 was just too much. It was uncomfortable and I just wanted to get a fresh start. I moved to Texas directly after high school, and I made a lot of very irresponsible decisions financially and really dug myself into a big hole of debt. I decided, let's go ahead and file bankruptcy. Let's get myself a clean slate. That way, I can stop stressing and I can actually do better. Okay, just to give you a little breakdown of the debt that I do have that totals up to $91,300. I owe about $51,000 on the vehicle that I have. We did try selling that, trading it in, all that good stuff, but I have way too much negative equity to come out on top. I bought a motorcycle back in 2022. Thought that was a great idea. Um I same thing, tried selling it, not able to get what we owe out of it. >> Um I do own a camper and I owe about $13,400 on that. to live out [laughter] of that camper because I can't afford a house. Um, so I am keeping that since I do live in it. I have $2,200 worth of medical bills that I had no idea were in collections. And then I have $12,000 worth of student loans. However, those do not get forgiven with bankruptcy. So, I will still continue that payment. And then I have about $7,700 worth of credit card debt. All coming into a grand total of $91,300. >> First of all, okay, yes, it is harder to get into a home. Now, yes, a large down payment is difficult to get to. Uh, interest is not great on a house. How in the world does she think she's possibly possibly going to Sorry, I don't mean to scream. She You're not a guest on my show. Why does she think in in what world does she think she is ever going to get to home ownership if she's getting camper, motorcycle, and a $50,000 car? $50,000 car when she's moving to a brand new state. This is This is so American. We are so debt brainbroken. And she's actually right. I mean, bankruptcy is actually not that hard, not that brutal, a little expensive, but it's really not the worst. It [ __ ] your credit for a bit, and it's not a good learning lesson. People usually end up in the same situation they are without changing their behavior before going through bankruptcy. So, but she is right on that. But how did she ever expect? She can't get sympathy of not buying a house if she's getting a camper, motorcycle, and car, of which minimum payments on the camper uh on the motorcycle and car are likely over $1,000 together. like $1,000 going against anyone's income unless you're like in the top 1% is going to aggressively prevent you from saving anything. Remember, she can get an FHA loan on her first house. She can get what is that as low as 1.5% something like that down on your first house. Um how how would she how was she surprised? You can't get anywhere. And that also is really stupid getting a trailer instead of renting an apartment cuz she's she's getting debt on a depreciating asset. It's almost even worse because an expense could pop up. Have to get new tires. She has to pay rent anyway, likely to park somewhere and get the utilities plugged in. >> Uh, no. She's America summed up. >> What other hidden cost of bankruptcy that no one wants to talk about? >> Uh, I mean, usually it cost a cost a couple thousand bucks to go through it. Go through the process and get a lawyer on your side. Um, some court filings. Um, there is the credit impact. There is the credit impact. 7 to 10 years depending. And with that, that could really make it more expensive to get into an apartment cuz that's usually instead of just as a security deposit, you might have to do first month last month cuz that includes rent, not just buying. >> Yeah. Yeah. Just rent instead of just doing a security deposit like someone with a decent credit score, you might have to do first month last month as well, which makes it very burdensome to get into an apartment. But you're a risk, you're a riskier person. then you have bankruptcy and a lot of people have apartment collections. So, it's not surprising they would request that. >> Um, you'd have to get into a predatory car loan. If your car breaks down, you don't have money. You have to get a 25% interest rate car just on a horrible like 8-year term and it's probably some piece of [ __ ] car that you buy for 20 is worth 15 before it's even driven off. [gasps] Uh, then the credit cards you get, you're not getting the the good intro 0% cards. You're like, you're getting credit one cards at 29% with monthly fees even if you pay on time. So, you just get access to the worst services in the world of debts. You're not getting approved for decent personal loans. And again, like I said, the most important thing, bankruptcy doesn't actually fix anything unless you fix your behavior. Because just like consolidating your debt or transferring to another credit card or um even letting things go to collections and negotiating them, just like just like all those bankruptcy, if you do not change the your behavior that got you into that situation in the first place, you will literally end up right back there again in a few years. Invey multiple times and now they're heading there again >> cuz it changes nothing. Most people have no idea where their testosterone levels sit. But what if I told you there was a solution? Something that identifies low tea faster than a high school bully. And it won't cost you all your lunch money. 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What's the biggest misconception people have about why humans end up in debt? Um, well, a lot of it, and it's not necessarily a misconception, but it's the wrong way to look at it, is because of an emergency. Like, yeah, if you have zero dollars, something happens, you would have to probably go into debt for that. But people don't look at what happened before then. They were living their life, spending whatever they wanted on fund. They never saved up even a one month emergency fund or a highest deductible coverage. They didn't save up anything. So, of course, when an emergency happens, you're going to go into debt. But it wasn't the emergency that did that. It was you living your life, not saving up even a threemonth emergency fund, which I would recommend six, by the way. But it's not saving that got you into that emergency debt, not the emergency itself. It was your behavior before that emergency. >> Yeah. It I don't know. It seems to me like a lot of financial success, it has a knowledge component of understanding the physics of the system, but a huge part of it is emotional regulation. Mhm. >> What's the relative amount of knowledge versus emotional regulation when it comes to being good with money? >> Depends where someone comes from. I mean, so I'm in a place of privilege. Now, you could say I have information and yet I look like this. I know what it takes to lose this. This is know this is this is I have the knowledge. This is all behavior at this point. I got the tits. I got the tits cuz I'm choosing that. >> Some people pay for them. >> Some people do. I would pay to lose >> You got yours free. >> Yes. I'd pay to lose them, but instead I'm just not doing the work that would be required to lose it. I have the knowledge, don't have the behavior. Yes. So, there are people in those financial situations. There are going to be the people that come from a very different life, incredibly low income, no opportunity in their neighborhoods, no people to look up to, maybe even bad internet, so they don't even get to watch the same podcast as us, don't have a good library to go read a good personal finance book. Um, and I don't want to just victimize someone or infantilize someone. But there are harder situations to come from. Doesn't mean they can't get out of it. It just might be a little more difficult and you need to surround yourself with the right people. Do you find it difficult when somebody comes in front of you? And a lot of the time it is because of decisions that someone has made and this illustrious uh like tailwind that you've had of all of these people that have made bad decisions and then somebody comes in front of you who has come from a situation which has put them so far on the back foot financially. Do you sometimes find it hard to change gears with them as opposed to sort of pointing the finger too much to actually be like, "Oh, I I see you. I see you in this problem that you're going through and that you've been you've been put into. >> Yeah. I mean, we really only allow people on the show where it's their fault cuz it's a personal behavior show. So, anyone that complains about the people on our show saying that, well, they can't control that. No, everyone that comes on our show, they can control. If someone applies and it's something out of their control, something like an incredible medical diagnosis, that's where we send them like a page of resources and like if we can connect you with anyone, let us know. But it doesn't make sense for financial audit because financial audit is about personal change. So we just we just don't have those people cuz that's not the conversation. >> Yeah. What going back to personality traits, what do you think are the personality traits that predict financial success? >> That predict financial success. Certainly being discipline. I mean discipline comes down to everything. Um everything in the world of budgeting comes from or money comes from budgeting and budgeting is all about discipline. So, you know, that's why we created DollarWise, that personal finance app, that budgeting app that is made for the everyman, not just like the, you know, super financial nerds who want to use things like WAB, things like that that are incredibly difficult to use. Um, they have the discipline to actually log into that app, connect their accounts to their banks, see where things are going, and take the actions on the advice that's given to them based on their actual financial information that's plugged in. Without the discipline, even a tool like dollar wise that is incredibly useful to changing people's lives, you got nothing. It's >> like you could be tracking all of your calories using macroactor or something, but if you're not going to change what you're eating, it doesn't make a difference. >> Yeah. It's discipline. If you people people are excited when they leave financial audit or they watch Financial Audit and even me like a diet, even me like a diet. If you did a fitness audit on me, I might be excited for a couple weeks. Then, you know, if you don't have the discipline, sometimes you fall back. It's easy to have a fire under your ass for a couple weeks. M >> uh if you don't have that discipline for the long term, it's difficult. It really is. >> What does debt do to someone's identity? >> Well, unfortunately, it turns a lot of people into victims that they're really not. Um, a lot of people have more control than they're really willing to admit. What does it do to their identity? That's interesting. Some people use debt to improve their identity more than anything. you know, pulling up, you really care what the person next to you at the stoplight thinks about your car. I don't know why people care about that. I've never cared about that. Um, a lot of people use debt to get the clothes that make them look good, the jewelry that makes them look good. Unfortunately, actually, that quality tends to come from lower income communities anyway. It's kind of crazy how that works, but um people use debt to change their identity. But then people also use their identity of debt to put themselves in a place of victimhood and like, oh, I'm in debt. I can't I can't do anything. I may as well just spend the money. I already have the credit card debt. Let me just put it on a credit card again. What's an extra $10 going to do to $5,000? And the answer is not much, but it's a death of a thousand cuts. They just think that over and over again. >> Mhm. Yeah. It's a very strange sort of death debt spiral where the sunk cost fallacy of this is already bad. What does it matter if it's a bit worse? And also, if you're stressed with finances, >> you probably want something that makes you feel a bit less shitty. And >> that could be food. I'm going to sedate myself from my financial troubles by further ingraining myself into my financial troubles, which also becomes a spiral of itself. >> Yeah. Yeah, that was totally me in college, you know, when I had a lot of bad debt. Uh, car debt, student loans, private student loans, multiple credit cards, and family debt. I absolutely went to McDonald's, swiped the Chase Freedom card, getting it close to maxing out constantly, and cuz it felt good. >> What did it matter? It was basically maxed out anyway. What's an actual maxed out credit card going to do? >> Do you think lifestyle inflation's become a bigger problem than inflation itself? >> Oo, bigger problem. I wouldn't say it's a good question. You're a professional podcast host. That's nice. Damn. Um, I'd say inflation is worse overall. I'd say worse overall because that impacts everyone. That's such a choice, right? Such a choice. But I'd say on a on a personal level, yeah. No, that's bad. That's bad. That's going to that's going to [ __ ] you over when someone gets the 20%. No, no one gets a 20% raise. Okay. when someone gets a 5% raise but increases their spending 6%. You know that that is very common on our show. You know what's interesting? People on Financial Audit that are doing worse are the highest income earning episodes. People often um you know you open the show with uh getting death threats and stuff. Death threats and it's kind of minimal but we do get lots of complaints and stuff about the show. One of our biggest complaints is you know I'm yelling and making fun of poor people. >> Those are actually the people I usually make fun of and yell at the least. It is the high income earners that if they just fix a couple things, they can get out of debt pretty quickly, but they also get into worse debt because they have a higher income, so they get approved for more debt. They're always the worst off. They lifestyle inflate. I swear the closer they get from 100 to 200 to even a half a million dollars a year, the worse debt, the more credit cards, the more time shares, the more cars, the more [ __ ] they have. It's It's impressive. It's so bad. It feels, I think, probably incredible to a lot of people that you could earn half a million a year and have a bad financial situation, >> which I wouldn't be surprised if the majority in the United States didn't who make that much. >> Why? >> Yeah, have a half a million. Go get yourself the nice house. Go get yourself the nice car, the nice clothes. Why not? You worked hard. Deserve it. It's in our culture. We want We're consumers. Do you think that uh the things that richer people waste money on are different to the things that poorer people waste money on? >> Absolutely. I'm trying to get over my fear of flights and I guess I'm rich now, so that's nice. Knock on wood with all >> Does that help you get over your fear of flights? >> I rented a PJ. Tell me. That's a waste of money. >> Easier or easier or harder? >> So, it's a control thing for me. I don't like being stuck in a situation that I can't control. >> Do you know how to fly the PJ? No, but I can say let's land. I can't do that with a commercial. >> Uh, well, you can you could make a big enough fuss that you would like, but it would be a real headache >> and bad for my career, too. So, >> that would be a real headache. >> Yeah. But like, um, so I pause. >> Yeah. >> What was the first time with your travel anxiety getting on a PJ? Like, >> [snorts] >> um, it was Oh, the PJ itself, it was actually really bad when we filmed it, too. [laughter] We filmed it. It's on the internet. I burst down in tears. It's really bad. >> I'm sorry, man. >> Oh, [ __ ] It was It was anxiety. Like, that's not >> Yeah, I don't think that you should dismiss it like that. So, >> but it's not like something bad happened to me, right? Like, anxiety is make believe. It's like it's not real. My brain thinks it's real, but it's not. So, I was crying. I was sad. But, you know what was actually making me more sad and crying? A lot of people thought it was out of pure terror. It was remembering a lot of the things that I haven't done. A lot of the family I haven't visited because of my fear of travel. >> Grief. As much grief as it was anxiety. So, interesting point here. There's a guy called Vinnie Shawman who's a hypnotist in the UK. >> I have a friend, my friend's name is Sky King. Sky King, right? This guy lived in Hawaii >> while he was a kid. Flies all around the world. Loves Asia. Been to Japan a bunch of times. Out of nowhere, just develop travel anxiety. M >> bad travel anxiety. Tried to get on a plane, couldn't >> bailed out. Tried to get on a plane, couldn't bail. I think this happened maybe six, eight, maybe 10 times. And I put him in touch with Vinnie. Now, some people have better results with hypnotism. Some people have worse. In a single session, Vinnie fixed his travel anxiety. And I don't know what the full story is, but I know that the Simpsons theme tune is an integral part of the anchoring for how he gets over his travel anxiety. >> Interesting. >> And uh that was real. That was like it's a [ __ ] cool gift to give somebody to like unlock that. But I I know what you mean, Ang. There is nothing wrong rationally in terms of the utilitarian approach view of the universe. there is nothing happening but your felt experience of I'm getting on this jet that I've paid money for that's kind of a momentous occasion for me it's this landmark as a person who talks about money doing something that's kind of canonical in everybody that has money's life >> and my experience of that has been tarnished by the fact that I've got this thing that isn't me that I don't want in me and is kind of behind the steering wheel a little bit I think that's I think that makes sense >> but it was nice cuz I was working with a panic therapist at the time and just started working with him again Thank goodness cuz I need to get over this thing. Uh and he didn't let me get off like like >> was he with you? >> Of course I Yes. So I brought him >> You brought your panic therapist on the the jet with you. >> It was our plan. You know, we kind of >> Oh, it wasn't like an intervention or something. >> Well, actually technically I hired him the day before, so we already decided, but yeah. Um so we brought him with us. He's really cool. And I'm working with him now again and we have we have a game plan uh to get over it. But um yeah, it was it was it was really simple. It was Austin to San Antonio, so it was nothing. I just I wanted to get on a plane again cuz I was just preventing myself from getting on a plane. So that's a very quick flight. >> How long had it been since you were on a plane? >> The decade at least. Wow. >> Yeah. So mostly road trips places, but even that still gives me kind of anxiety. >> Um which is just it's just I hate it. Um >> um but you know, we have a game plan. We're doing some things. I want to go be on some more shows. I mean, dude, if some people's exposure therapy is we just need to get a spider and put it in the corner of the room, >> your exposure therapy requires a private jet. >> Exactly. >> It's a slightly higher bar. It's just as well that you're rich >> because if you weren't, >> you'd be [ __ ] with this thing. >> Exactly. Exactly. What really sucks is the same exact model of private jet I was in just crashed in Laredo, Texas yesterday and a CEO in Austin, Texas died on it. So that's like kind of [sighs] [ __ ] with me. >> That plus Oliver Tree, there aren't many forms of >> air transport that are feeling pretty safe right now. >> Yeah. The next one's a commercial. We're doing a commercial next. We're doing some long road trips to >> I would book, if I was you, I would try and get maybe your row and then one behind, one in front. >> I was thinking that >> just in case there's a, you know, one of those. >> I just didn't want to fly around people. But yeah. >> Oh, that's also nice. That's also nice. Uh, so you've got some anxious, panicky tendencies. >> Yeah. Really just that one thing. >> You built you built a show which is essentially high stakes live confrontation. >> Right. With strangers about their most shameful secrets. >> Yeah. >> You're someone who has panic attacks. >> You run a show that gives other people panic attacks. >> Yep. >> Is that a coincidence or is this just like the most elaborate exposure therapy ever? >> It's great. I mean, that's what people have to go through. They have to go through it. What's actually nice is because of mine and I'm uh you know working with my guy for a while now like I can actually work through them pretty well and now if someone actually does have a legitimate panic attack on the show I can help them through which is pretty nice. >> Oh we just pause the cameras and do that real quick and then this episode is brought to you by Whoop. 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So, you can buy it for free, try it for free if you don't like it after 29 days. They just give you your money back. Right now, you can get the brand new Whoop 5.0 and that 30-day free trial by going to the link in the description below or heading to join.woop.com/modernwisdom. That's join.woop.com. whoop.com/modernwm wisdom. >> What is your process? Somebody is sitting opposite you. You're pushing. You're pushing. You're pushing. >> They're realizing how actually just explain to me what you think is happening inside of them, inside of their mind. Somebody's got a lot of debt. Maybe they've been hiding from it. Like what's their emotion before? What do they get to? And then I'm interested in what you do to bring them back into land as well. Usually I can tell they kind of just go flatfaced in that moment. Like they they disengage, their eyes kind of go blank and maybe even like a little bluish. Um and I'm like, "Oh shit." Okay. So we just literally pause. I'm like, "Hey, you okay?" You know, I go from the crazy voice to like just down chill like, "Hey, you okay? Remember?" You know, it's like, of course, they know what's like real and everything, but I'm like, "Yeah, we can take a pause. You know, you can take a break." And then I help them if they're like actually having anxiety attack, I'll do like a breathing exercise real quick. It's like three in, six out. And um that's pretty rare these days, but uh and we definitely have people that need to do like a lap around the building, a producer will take them or they need to go outside and hit a vape. >> Is that rare, do you think? Yeah, hit a vape. That's good. That's why Jared, I need a [ __ ] e-pipe. For the people that are listening, I require I want to be able to come up with I want to be able to pontificate. Uh but I want to be able to do it with nicotine. So, if anyone can find me a pipe that looks legitimate like this, but I can have some nicotine and that would be lovely. Um, I wonder whether part of the reason that you're not inducing as many panic attacks is because you're getting soft in your old age. >> You think so? >> Yeah. I wonder whether it's because you've taken your foot off the gas. >> I just threw something at someone the other day. [laughter] [gasps] >> You'd be [ __ ] here. There's so many projectiles. There's so many potential projectiles. Some of them are heavy as well. >> No, honestly, I am proud of it. I think our our onboarding process is so thorough. We've had people that have uh come to work with us or people that interviewed with us that have worked for like Dr. Phil and a lot of other type shows. Dr. Phil's close in Dallas, so that's why him specifically. But they go through our process and they're like, "This is crazy. I've never seen an onboarding process like this at all." Cuz usually for like I'm not speaking Dr. Phil at all. Don't sue me. But many shows like that daytime TV, they don't give a [ __ ] about their guests. But we actually really care because one, they're members of our audience. So, a little selfish there. Okay. A little selfish. I want members of our >> kill them. You're going to reduce the audience size. >> Yes. Exactly. And I want them to do well. Whether that's, you know, you could look at it from two perspectives. Pretend like you hate me and I'm the selfest piece of [ __ ] ever. Fine. Take that. Obviously, I want them to do well because it proves spite of me or do it because of me. >> It shows that it works. It shows that the show works. So selfish about how what the mechanism is can be because you don't like me. I'm an [ __ ] want to prove me wrong saying that I don't think that you're going to be able to turn it around or because you love me and you think that my advice is worth listening to and you turn it around. >> Yeah. And or there's the second option where it's and that's the real option that I actually really do care about how they succeed. So I really want them to do well and the average guest pays off. It's just over like $20,000 in 12 months of debt after coming on financial audit. That's our most recent annual report. We do one every December. How much of that impact that you have on people's debt do you think is because of the knowledge that you give to them? And how much do you think is because of the intensity of the emotional discomfort that you put them through? >> Yeah, I it's a mixture of both. There is the that tough love, crazy and fun approach of it. Like I think often times 90% of the time they're having a good time too. Like they know the craziness of the show. So, but they have fun and uh that's not for everyone, but I'll don't come on the show if it's not for you. So, it's like a show I would actually personally go on when I was in debt, it would have worked for me. Someone screaming at me, that works for me. It worked for me when I played sports, you know, it it's whatever. It works for me. Um, and then we set them up with lots of tools afterwards. They get dollarized for free forever, no matter what. They get all of our personal finance courses. They get a certification through course careers to help with their jobs. They get access any kind of resource that we're working with third party, they get access to. So, we try to give them everything and then we check in with them. >> I don't remember the exact dates, but it's like the day their episode goes live, a week after that, a month after that, then 3 months after that, and we do two updates a week with former guests on our in our Hammer Elite membership. Um, and we're endlessly checking in with them with surveys and we tell them to reach out anytime they want. So, there's the mixture of the show and that lights a fire under their ass and the post filming support as well, >> postcoidal care process. >> Yeah. Uh, I did Love Island 11 years ago and uh, famously the UK series, I don't know whether it's happened in America yet, but the UK series of Love Island has killed more people than any other TV show. Like, two past stars took their own lives. One of whom was a really good friend of mine. >> That's crazy. >> Then the [ __ ] host took her own life. Caroline Caroline Flack. Yeah. I just I once h that's strange twice you're like uh three times including the host you're like there's a [ __ ] pattern here. Uh but one of the issues and this was something that I saw especially I think Love Island broke the app store when it came out. It was the number one app in the world above chat GBT above [ __ ] Claude. Uh and like there was shutdowns on servers and [ __ ] like 300,000 concurrent downloads at a moment like download the app to watch I don't know what I don't know what you do voting on it or something maybe. and um the postshow care routine thing cuz I did the f I was the first person through the doors of the first ever episode. >> Wow. >> Right. Of the first season. So >> they were we were the the guinea pig. We were the first child where you make all of the mistakes. You drink when you're pregnant. You smoke in like you [ __ ] forget to feed it for 12 hours. Like all of that stuff. And um once you finish up, you should have a support system as you get thrust back out into the world. Now, the first season that I did was like way smaller. It was 10 times smaller than season 2, which was 10 times smaller than season 3, which it really sort of took off on that exponential, but had it have been even a bit more exposed, there was the least amount of postshow support, >> uh even though it was that much smaller, the post show support was basically non-existent. And then each time that one of those incidents occurred, you could tell that uh ITV, which is the the company in the UK that was put, it's channel 3 in the UK, right? They have channel 3 and channel 7. And um every single time that one of these horrible horrible situations happened, everybody got an email just reminding you that you have access to the safety and care team whenever I'm like, dude, >> [ __ ] too late, man. You know, like something about the horse bolting in the door being closed, but >> the fact So probably didn't get the opportunity when walking out of the island to be like, "Hey, if I do this, make sure it's not in the episode." >> So it's like you you were [ __ ] like you control the edit. Exactly. You do not control the edit and the entire universe is watching you and commenting on you. And then what's matter is you come out because it's recorded and published live, but you only enter back into the world once it's happened. You have no idea what's made the edit. You have no idea what people think of you. You could come out and be the hero or the most hated person in your country. It's [ __ ] crazy. >> Yeah. Should I get into that? Everyone's doing that. Everyone's doing these pouches. >> Uh >> would I be like so locked in, >> dude? No. That's scary. Get them. >> I'm asking for advice first before I go full. >> Those are mine. So those ones are That's just caffeine. That's just 50 50 milligrams of caffeine. These these are very healthy for better for you nicotine. Those are knickknacks. So, that's >> everyone in the world is doing pouches right now. Like, how locked in would I be? >> I have a bit of an oral fixation, which I'm sure that the uh people that think I'm gay on the internet are going to love to hear me say. Um, have we got any toothpicks? JB, can you get if you're outside, Jonathan, can you bring some toothpicks in from the cupboard, please? I want to show those. Just something to [ __ ] dick about with while you're working, I think, is very important. So, if you got a pen or whatever, sometimes you try I could get the pipes. >> I bite my fingernails. That's my thing. >> That'll do you. Um what what income level do people's financial problems fundamentally change? >> I'm not saying it's behavior. It's fully behavior. Again, like I said, um the worst situations I've seen in the entire show are high income earners. Absolutely horrible. So, I I'd say never. It gives you more opportunity to get out of a bad situation. But I wouldn't say the income levels, everyone thinks when they make the next $10,000 and their income, their entire life's going to change. >> Their spending changes, but if their behavior is the same, if their inclinations are the same, their lack of discipline is the same, they're actually just going to be in a worse situation. So, I would actually argue that if behavior doesn't change at the more income level, your situation might actually get worse >> because you now are playing with bigger chips on the table. Yes. And if you're [ __ ] it up, you've got more access. I never thought about that. It's such a good point that you've got more access to credit. >> People think uh banks, credit cards think that you are a safer bet because of that. You can [ __ ] yourself harder. >> Yeah. And I guess I'll put an asterisk on my statement. There is like you got to hit a bas basic minimum level, right? Like if you can't pay for like the cheapest rent in the area, put food on the table, utilities, then obviously anyone that's not making up to that point, yeah, that's a threshold where it's like game changer cuz you're just like surviving. But if you can't even hit the survival, like that's not even in the conversation. But typically, we don't really allow for that that much in this country and western society. I mean, you'll see it, but you know, we have lots of uh uh child support services for low income, uh food support, um housing support. It's not perfect. No one's going to argue it's perfect, but we do have a lot of a lot of social programs to help those people that are in those lower. >> Uh friend of the show, Ice Coffee Hour Boys, had Kevin Olirri on and he gave some >> insight about where he thinks different levels of income impact your lifestyle. You pull that up for me, Jared. Look at this. >> What would you say are the main four tiers of wealth where if you hit a certain amount, life? >> Well, I tell everybody this. You should strive very hard if you're an entrepreneur to have $5 million in tea bills. Not in anything else, just tea bills, making 3.82% this morning. You know you've made it and you've safeguarded your family for the rest of your life if you can get $5 million liquid in tea bills. Most people that consider themselves very successful entrepreneurs do not have $5 million liquid in T bills. They don't. But what net worth should you be at to h to justify 5 million in T bills? >> Well, you should be at the first thing you should do is get to 5 million liquid be worth $5 million liquid. That's far more valuable than anything else. Liquidity with wealth is actually a superpower. Most people say I'm very wealthy, but they couldn't raise a million dollars by 2:00 in the afternoon if they tried. It's tied up in all kinds of things they think are worth a lot until the [ __ ] hits the fan. The plan is, if you're an entrepreneur, the hardest thing is to make the first million really hard. And when you make the first million, put it in tea bills. Just as hard, but not as hard, is to get to 2 million. Two to three is actually quite easy because you figured something out. But where you get undisiplined is you start buying [ __ ] you don't need cuz your managers get to 5 million liquid. I you have to have 5 million liquid to call yourself a successful entrepreneur. And I don't care who say who who disagrees with me, they're wrong. >> I guess I'll be wrong. I mean, no, I I agree. One of one of the first goals I had was to get to 5 million as quick as I could and but invested in the stock market. I don't really understand get your first million, put it in low indexing uh T bill T bill >> like treasury, right? So, I'm not really understanding like putting it in bonds or something like it just makes sense. If if you make your first million and you're young, let it grow in the marketplace at an average of 8 to 10%. That makes more sense. I mean, I I guess if you're approaching like 60 and you make your first million off of a business being successful, yeah, put it in something more conservative. But if you have time on your side, unless America collapses, like the stock market's going to do >> over a long enough time horizon, you'll weather any of the little wobbles. >> Yeah. Exactly. So, um, but I do agree with that 5 million mark cuz that 5 million mark, if you do the 4% rule, it's 4% of 5 million. I think what is that? $60,000 a year, something like that. So, you live a good middle class income off of that using the 4% rule. So, that works. So, that was one of my first big goals. It's I don't like the idea of taking the first million you make and then literally just not letting it grow past inflation. That doesn't make any sense. If if you're getting your first million, you should let it work, have it work for you in the stock market. I'm not saying reinvest it immediately into the business. And certainly, he's correct where people start getting money and they start blowing it. He's 100% correct on that. It's just weird to take the first million, put it into something low index, especially if you're young. [clears throat] >> Is there a financial milestone that creates the most happiness for people? >> Um, yeah. A lot of the happiness that can be achieved through wealth, like you can't buy friends, you can't buy family. So, a lot of the happiness that can actually be achieved through wealth, I'd say if you can cover, if you can weather practically any emergency, including like a cancer diagnosis, something really bad, if you can, >> how much money is that? >> Uh, I mean, honestly, I think that 5 million is a good marker. That 5 million is a good marker. You can really start pulling into it for, you know, a few years if it's like really aggressive, really bad, and you want to go to the best in the world. Um, so with that, you know, you can weather anything. You can, even if you blow through the five, hopefully you make it to the other side and you can start bouncing back. But that gives you unlimited flexibility. You don't get to do the crazy things that are super fun. You don't get to do the you can't buy a PJ. I can't buy a PJ. I can rent a short little trip. But, um, I don't think that's what drives happiness. It's a fun thing, moment of happiness. But, I think the true happiness that you actually can buy is security. And 5 million is a really good number to get to. >> It sounds like a massive number for people to feel financially secure. >> Yeah. But, you know, you can weather literally practically anything. >> That's the question. Like, you can weather almost everything uh with a few hundred,000 hours set aside. You can, you know, take a while to find a new job if you have a few hundred thousand. But I'm saying if I'm really thinking like you can weather anything, 5 million is a great number to have. >> Mhm. Yeah. I I totally didn't think about the fact that you can afford to invest in specifically the S&P, any kind of tracker if you're younger because there's going to be some movements. There's going to be periods of downturn, but over a long enough time horizon. And I mean, if the S&P goes to [ __ ] zero, there's much bigger problems than what you're doing with your money. >> Yeah. 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Right now, you can get a free sample pack of Element's most popular flavors with your first purchase by going to the link in the description below or heading to drinklnt.com/modernwisdom. That's drinklnt.com/modern wisdom. How much shame surrounds debt? And do you think that shame hurts people or helps people change? >> I think it it's pretty damaging that in our culture talking about money is shameful in general. Uh and in debt, I mean, I think it's good to have a good laugh on a Tik Tok short, things like that. That's fine. But I think if we have a whole system where people feel shameful to even bring up their close friends, their family, or even their therapist that they're in a bad financial situation, they're not going to get that emotional support. they're not going to get that encouragement that they actually need to change cuz they'll just be weathering it themselves. That's a very difficult thing. You don't want to, again going back to even just the cancer thing, you don't want to be going through that yourself. It's almost impossible. You need support. Anything you go through, any kind of support system is good. And if we have a massive level of shame around it, which I would say in our country, in our society, we definitely have. People aren't even willing to say what they make. Yep. you know, they're like embarrassed or they're afraid of making it too much and people look down on them for like they'll be jealous, you know. So, there's a lot of shame around personal finances in our society. And I think that's pretty damaging. >> It's interesting as a British person, we have shame, but in the opposite direction. We have shame about talking about how much we make. If we make a good wage, >> everyone's poor there >> because there is such a strong poppy syndrome that if you're seen to be too big for your boots or doing too well, that can often cause way more eye. It's like an interesting I understand why people would feel personal shame around talking about being in a bad position financially. What does this say about me as a human? What does this say about my habits? Maybe people are going to think less of me. But there is a like a a pro-social [ __ ] that person's down bad. Hey man, like I I really want to help you as opposed to dude, I just got this new job and I got a I got a 30% pay increase. I can't believe I I've been working so hard for this for a long time. If that's not someone that's got your best interest at heart, that triggers in them not pity, which is not an emotion that people want to feel, but it induces envy, which is way more active. You know, that's the sort of thing that can get you ostracized from a friend group. And again, this isn't everybody. I've got amazing friends in the UK, but I met a million people running nightclubs. I was a had one of the biggest events companies in the UK for a long time. met a million people, right, in person with a tight pair of jeans on, holding a clipboard, giving out wristbands and free champagne. I had a handful of close friends that I could talk to openly about everything that was going on, successes, failures, all the rest of it. >> That's good. >> That's not a great friend exposure to conversion funnel, right? A million people, handful of friends. >> Oh, yeah. >> And that's why at least >> you had them though, you know. >> That's No, a lot of people don't. >> That's true. Yeah. And as an only child that was like, [ __ ] like I've got some people that have got me and that's cool. >> Uh just the UK is a very inhospitable environment for people that are trying to uh do things financially. I got this line. I wonder whether you agree with it. Uh the UK is a great country to be poor in and a terrible country to be rich in. And America is a terrible country to be poor in and a great country to be rich in. >> Yeah. I mean, a lot of poor people move to and stay in the UK. a lot of wealthy people leave. I'd say the analytics just follow that in general. >> Bingo. [ __ ] nailed it, dude. Forget the py maxims. I just dialed the entire financial industry. Um I there's there's a a safety net in the UK which moving to America to me feels like quite brutal. Uh quite like >> why leave the Council of State? >> It's comfy. >> It is. National Health Service. I've got this stat. Britain spends more on working age welfare every year than it collects in income tax. >> Yeah. >> Working age welfare. And the difference gets borrowed every single year. >> Yeah. It's insane. And all the productive people that would actually contribute to the tax base are leaving. The the wealth drain, the brain drain in the United Kingdom is I feel bad for your country. That's honestly it's a place where I mean the majority of my life I wouldn't have considered moving there but there was a part where I was like this would be the best place to go living cuz you get the cool walkability of Europe and like the nice you know okay winter and nice summer >> and it's your language. Exactly. So I wanted to kind of go there for a bit. It's gone. >> I don't I if the UK comes back it'll be the biggest comeback story in the history of civilization. But >> yeah we're like 90 down at the moment. Yeah. In a game of football, >> there are, you know, I mean, there is the conversation where it's like, yeah, GDP per capita, there would be 51st state. Did you see that? >> Yep. >> Yeah. >> I got a lot of [ __ ] for putting that. >> Well, that's true. But there also are >> I got a lot of [ __ ] from Americans. >> Well, Americans are [ __ ] I don't know. Americans are rich and [ __ ] but there are some other true things. The UK when it comes to safety and a lot of things, you know, it ranks higher. So, there's not just like It's not all [ __ ] >> Yeah. It's not all [ __ ] but like no, it is true. I mean, unfortunately, it's going the same direction as Spain or southern Italy, one of those places where it's people go there or are born there, get educated there, and then leave to somewhere where they can make double the income. And why wouldn't they? We're such a mobile world, dude. if you're inhospitable. And this is the thing that I understand some of my leftyle leaning friends, Jimmy the Giant is one of them. And he thinks that taxing the rich, he means like the ultra rich, he means like 100 millions plus of liquid or whatever of held asset wealth. Um, but that that is something that's justified. That's something that would help to raise up the the underclass and and people that are unemployed and need that. But I think the bottom 55% of the population in both the UK and the US are net withdrawers >> from benefits as opposed to net contributors. >> Yeah. >> Like just that statistic. Income tax in the United States, the bottom 50% of earners contribute 1%. >> 50% contribute 1%. Like that's crazy. We're a very uh progressive income tax society in the United States. United States is actually the most progressive western major country for income tax. What we don't have is VAT tax which usually funds like the national health service and whatnot. So in Americans Americans, that's the fun thing about Americans including um especially populist Americans either left or right, we want the Scandinavian social programs, but we want to do it on like a Florida tax system. Americans are not willing to pay the actual taxes required for the systems. And it's never about the wealthy people paying a lot in taxes cuz that doesn't fund it all. >> Um it's it's all about the the flat tax, the VAT tax, the national sales tax where everyone has to pay an extra 1 2 3 4 5% or whatever it is on everything they purchase. That's what funds those social programs and the United States would never tolerate it at a national level. Have you ever seen what a set of accounts for a normal limited company that has to that's within the VAT threshold? So I think it's £120,000 a year £120. [ __ ] that was very unanglicized. £120,000 a year or above that your limited company makes and after that point >> your VAT reg you're registered for VA that >> have you ever seen one of the accounts submissions dude it is a as somebody that had a limited company for a decade and a half in the UK I still do my uh rental properties go through that although they don't breach the threshold so it doesn't matter >> it is a [ __ ] nightmare each individual transaction you charge the person who is getting the service from you an additional 20%, that's what VAT is, 20%. And then you claim back that VAT up to an amount from the government. So it's this [ __ ] ora boros, this endless >> financially uh uh bureaucratically in terms of paperwork. It's this huge overhead. And I understand what VAT is for. I understand that we have lots of services that you don't have in America. They need to be funded somehow. National insurance. That's another type of of uh tax that's not seen in America. >> But if you do the math, after everything that you get free in the United Kingdom, if you after people pay for it and the median income here, after the median taxes here, after the median paying for the private services here, we still end up with more money in our pocket in the end. >> No way. >> Yeah, it's it's pretty close, but it's still even with the health care is one of the biggest costs. Even though uh health care is the single most common reason that people go bankrupt in America as well, I think. >> Yeah. Which isn't surprising and honestly people make it sound more consequential than it is. As we talked about earlier, bankruptcy is actually not that even big of a deal really. It's really not. It's it's overblown. I mean, it's not great. I don't just like go get bankrupt. Like that's not wonderful. But it's like people make it sound like the scariest thing in the world when it's really not. But um I mean uh I looked into that two years ago. Maybe the numbers have changed today, but two years ago that's what it looked like. Can we still have like out of a major nation? Yes, you're going to have micro states where it's like Switzerland, you know, much smaller. Obviously, their GDP per capita, everything is going to be a lot higher in those kind of places or like Monaco, something like that. But as far as like a major nation, large nation, the United States like destroys when it comes to disposable income, the income you have after all the important stuff after you get taxed and everything, we just lead because we just encourage, our system just encourages that. But what's interesting when talking about the United Kingdom and you talked about uh your more left-wing friends that like want to raise taxes and stuff there. What's also interesting on the left right spectrum is during the great recession that 2008 2009 2007 um the United Kingdom went more conservative where the United States went more liberal with their spending. We pumped a lot of money into the economy. The United Kingdom uh I had it in my austerity. They went austerity. >> Uh, and you can see what the outcomes were. We went into debt for it as a nation, but we recovered in a couple years. The United Kingdom's GDP just recovered from 2007, I believe, like a year and a half ago, maybe two years ago. Yeah. So, the their more conservative approach of spending uh raising taxes, cutting spending during the recession, it failed. It objectively failed across Europe. In the United States, you know, Donald Trump coed a lot of money into the economy. We're very liberal with our spending. Yeah, we we chuck the money in. So, it's it's you know, we we're pretty progressive. I mean, 50% of our federal spending, yes, it's mandatory spending. It's not, you know, whatever, but it's still social spending. So, left versus right, it's not it's not always, you know, one side's going to always be in the right cuz the more right-wing running of their federal budget in the United Kingdom failed >> when it came to the Great Recession. It just it destroyed it destroyed the economy, destroyed productivity, destroyed spending. Well, even that now has kind of become quite squirrely because when you talk about conservative spending, a lot of the time that's more pro- capitalist. They're more prepared now to turn the money printer over. So, it's the like existing archetypes of what it even means to be left and right. Pick any pick stuff about which races you do or don't like, which cultures you do or don't like, which religions you do or don't want inside of your country, like everything that you the whole like tectonic plate underneath what used to be stereotypes and cliches, that's all moved. Oh, completely. I mean, you do see it in race. It was the more uh 90s liberal, which I'm po probably more aligned with on this uh perspective of we wanted a color blind society, you know, and it was the more right-wing people that were like, well, no, we see, you know, they're different than us, you know, that kind of stuff. Like, I don't know about the '9s at that point, but even still, that was the more '90s liberal perspective. Now, it's the more centrist, even right-wing position, colorblind society, and people on the far left, they're like, "No, we need black dorms. we need black graduations. We see race first no matter what. >> Um and it's it's very interesting how that shifted and I don't think with bad intention to be clear. I don't think they're evil for that. But I do think it's um sometimes when people get to the extremist they horseshoe around. >> Correct. Yeah. It far left and far right end up looking a lot closer than you'd think. >> Yeah. >> That just going back to the bottom 50% contribute 1% of the taxes. But then when you net it down in terms of what's given all different kind types of aid and assistance, I think it's up to the bottom 55% and net detractors. >> Yeah. It doesn't economy. >> And with we have systems made for that. The child tax credit is made for that. It is usually lower income people that have more kids. That's just how it is. And lower income people pay less taxes, but they get the same child tax credit. So this is more money is going to go to them in the end. Do you think that would surprise most people to find out that the bottom 55% of the population are net detractors from the benefit system as opposed to net contributors? >> Oh, of course, absolutely. Listen, I can I every time I take a political compass test, I find myself on a centrist, you know, slightly leaning right economically and then decently left socially, but I had like an extreme socialist on my show the other day. Episode's not out yet. And I was talking to her and I was like, "How much does the top 1% pay in taxes?" She says, "Nothing. They pay 0%." I'm like, "No, it's like 30% of all income taxes. Top 10% pays like uh 50%, top 50% pays 99%. It blew her mind. She has no idea because we're in such misinformation algorithmically defined places on the internet. There was a study done uh by some elite university um on the east coast where they were researchers were going into Tik Tok and engaging with leftwing content and then a different one would do right-wing content. And Tik Tok immediately found out in about 3 minutes whether you wanted if you're anti-men or it pro- left or anti-woman or proright and they would just put you into that camp where all of a sudden all the information you got all the content you watch was the extreme version of that and that's all you were getting >> uh cuz you show you engage with that and if you engage with that they want to give you more so you stay on their platform. It makes sense from their business perspective. So it's not surprising at all that people wouldn't be aware of that information if it goes against their worldview. Mhm. I've learned from over a thousand podcast episodes that the easier you make your health routine, the more consistent you'll be. It's like golf, right? You want to keep it simple and not mix a bunch of pills. You want the eye of the tiger, not the DUI of the tiger. That's why I'm such a huge fan of AG1. 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I don't know what financial education, what good financial education looks like because the incentives aren't necessarily aligned for somebody who feels like they're really struggling, who's comparing where they are financially to where they think their parents were at their age, where they think everybody else is at their age, what they think that they should have. So past generations, other people and my idealized version of where I want to be. All of that bundled together, you saying, well actually the top 1% of earners, they contribute 30% of the taxes and the bottom 50%, they're actually net detractors from the the system of the >> that doesn't make me feel any better. Like it's not a comfort to me to take a macro perspective when my micro experience sucks. >> Yeah. I mean, that's that's why financial audits about the perspective of the individual and their responsibilities and what they can change because, you know, some people comment, "Why aren't you talking about the systems that [ __ ] them in the first place?" And I'm like, "That's not what the show can change. You can go vote. >> Congratulations. You contributed to changing the system that you want to do." But the reality is on that show, only one person can change what's happening in that person's life immediately, and that's that individual. So, you're right. talking about the system, it it doesn't help anyone on that personal level. It's the actual choices there. There and there is good news. The United States is actually taking um a pretty important step towards it. We're close to 40 states that now require a personal financial education course to graduate high school. It's close to 40 states. It wasn't even half of America just a couple years ago. So, they're really >> syllabus. What do you think of the syllabus? I haven't looked at it, but I mean the governor of Michigan came on the show and you know she wanted to talk about it and you know uh she's Democrat, she's probably going to run for president and I was very impressed with how much she actually cared about making sure people needed to learn about basic personal finances before graduating high school. I think that's important and I'm glad to see that we're doing that as a country. Now, I don't know about you. I don't know what the grade system is like out there in the United Kingdom, but I was a [ __ ] [ __ ] who didn't give a [ __ ] about school. I would have done whatever the minimum thing required to pass that school and I would have or that class and I wouldn't have learned anything if I was in school. >> Like I don't know. I other than the things I was actually interested in, which is mostly history classes and music classes at that time. I did the basic bare minimum to pass and I wouldn't have learned anything. So there is that consequence, but at least we're trying. >> If you were to put together a syllabus of principles financially to teach young people, what would be the biggest ones? >> It would start with budgeting because if you can't budget, there's nothing else. So, um, budgeting is that, you know, we talked about the discipline, personal responsibility, that's a little harder to teach in school, but at least learning how to budget a household. Uh, starting with something like the 5030 20 method, which is 50% on needs, 30% on wants, 20% on investing. Smallest category is investing. You get to spend 30% of your money on [ __ ] Obviously, that changes in places like New York, LA, San Francisco, but that's a good place to start from. So, teach that concept. Teach what is a good car loan to get. I enjoy the money guy rule. You put 20% down, no longer than a three-year term, and no more than 8% of your income is the monthly payment. That equals a car you can afford. Actually teach the value of college and a degree instead of saying everyone needs to go to college and borrow as much as it takes to get whatever degree you want at any institution you want. and instead teach. Okay. A good general rule is don't get a degree of which you borrow more for than you'll get in your expected first year's salary. So that's a good rule. >> Oh, that's nice. >> Yeah, it's a it's a good rule to just not borrow more than you need. What's I don't know how America stacks up in terms of different courses at different universities. Can you give me some examples of low, medium, and and high and what would be expected? Because I there's no way. I've seen some of the [ __ ] student debt bills. >> Oh, yeah. >> There's no way that somebody's going to Some people wouldn't even earn that back in 5 years of being at work if they had zero costs and all of the money went back to their student loan. >> Yeah, absolutely. I mean, so strictly thinking college, let's get rid of trades or anything like that. Community college, you can go there for two years, you can get your basics out of the way. In fact, a lot of community college, you can get your four-year degree now at like nursing and whatnot. uh Austin community college here you can go for like a thousand bucks a semester or 2,000 bucks a semester super affordable super cheap many people can work their way through it and that's in Austin and it's in it's similar in other areas uh from there you want to transfer if you're going to transfer to an uh institution uh more affordable just standard maybe directional school like Western Texas you know something like that I went to Western Michigan um university where it's a little more affordable and you complete your final two years there and you take federal student loans for that uh and the big question from that well okay uh to finish your question so the four that more directional school finish your four years but >> beyond that then you're talking like you're going out of state at a four-year institution skipping community college out of state's like double the cost >> then you can go beyond that then we're talking private institution you actually go beyond that and think uh uh international which is why people really care about rankings in the United States cuz that gets international students since they care about rankings and they'll pay an extra premium to go to schools in the United States. So, that's why they really care. Um, but I try to stay down here. Try to stay in that community college for the first two years and then transfer to the instate institution. Federal student loans, subsidized or unsubsidized, at least you have the protections with federal student loans. Really try not to go private. The only reason you'd be going private is because your family already makes a decent amount of money. Um, so that that's how I would approach it. And that is degree selection. That's the important one. You have to look at the field you're going into. A lot of the um unfortunately there is a big gender division and this isn't anti-women. I don't want to be on that [ __ ] weird anti-women [ __ ] but there is an actual reality that women are getting lower return on investment degrees in the United States tend to get more things like social services, psychology, sociology, things like that that don't return where men tend to really think about the income post I don't know if it's ingrained society or culture or they to be the provider or whatever, but for whatever reason they tend to go, you know, more engineer uh things like that and women, you know, more teachers. So, uh, that's really important to think about the degree and the return on investment. And now, honestly, a thing to probably consider is how AI resistant your career field is going to be. Who knows where that's going to go? >> I think unfortunately women are going to be hit hardest by that. So, there is it's referred to as the lanyard class. >> Okay. >> People that wear lanyards to work. It's middle management, it's marketing, it's HR, and that is a big chunk that sort of white collar lanyard people. that is going to be a big chunk of what AI comes for first supposedly. Uh and that is gonna I I tweeted this and I got people got very mad at me about it that >> you're looking at your responses to tweets. >> Who cares if people are getting mad? >> I go on that once every two days and I see what fewer has occurred within the last 48 hours. Look, >> they don't matter. >> I post and ghost, but it's just interesting to see what the sentiment is. How close to a third rail or beyond the Overton window is this thing that I >> the internet is not real life. So, it's just so hard to take in account what is said. >> Very true. >> Like this last election in midterms, I swear it all went opposite of what you saw on Twitter. Like, you're going to think all these like out uh outsiders were going to win cuz they're so big on Twitter. It was nothing. It was nothing. Don't look at your response. >> The sexy campaign on social media is not middle America who are voting and actually have the time and the uh preparedness to be able to go out and have registered and are [ __ ] ready to go. Yeah. Um anyway, I said uh uh we've just got ourselves now we we've overshot it a little bit. I think women out earn men up to the age of now about 32 33. >> It's about £1,111 more to 29. I don't know what it is after that. And only then does it but that has grown. It was up to 29. Now it's up to 32 33 I think for women out earning men. Uh given that you've just about reached young people gender parity between men and women in terms of earning, you are now about to see that what probably to women feels like we finally arrived economically. >> Mhm. [sighs] >> Okay. >> Majority of degrees. >> Yep. Two women for every one man completing a four year US college degree by 2030, etc., etc. >> Mast's degrees, even more. >> Correct. uh PhDs also >> more but not more more uh that situation of par is maybe going to be at risk and I think a lot of fingers are going to be pointed that um we just arrived and now robots built by men >> have just taken our opportunity that is still so [ __ ] green that we haven't settled into it away from us that I think is going to be one of the biggest stories of the next decade I mean, there's going to be many, but one of the ones that people are going to feel the most is more war between the sexes. >> Oh, yes. The gender wars are so extreme. The political division right now in the most recent uh federal election, the gender divide in the generation Z is further than any other generation in American history. It's it's it's it's scary. I'm actually scared. And it it's impacting more things than just that. Uh, it's impacting reproduction numbers which impacts the overall economy. It impacts retirees, the retirey to worker ratio if people aren't [ __ ] And people aren't [ __ ] people hate each other. Now they have um you're swiping based on political affiliation on the dating apps, you know. Uh, so it it is very scary and it's sad to see. And unfortunately, again, it is usually like the white women that are calling me fascist online uh for personal responsibility financ. >> Yeah. But it's like it's a it's really weird because I really just want the best and we're talking about statistics or anything isn't sexist. It's not right now. You know, I didn't even say it earlier because it shouldn't be about the sexes. But when we talked about people struggling post college degrees and not get a job, it's actually not women. They're they're getting uh jobs at the same rate as new degree holders as traditional. It's men that have fallen off the cliff. But I didn't want to focus on that because this shouldn't be a big gender war. But the gender wars among Gen Z right now is insane and we're going to have massive consequences down the road just as we've seen in South Korea, in Japan. And I'm terrified for that as a hopeful future retiree. Yeah. Uh this was from my newsletter this week. Asian women now earn more on average than white men in the US. A finding that adds a wrinkle to common narratives about patriarchy and white supremacy. Asian women are winning. >> Yeah. Yeah, sure. Of course. And like I understand there's the history, right? So you got to put many people feel burdened by history. I get it. Victimhood's easier to have than you know saying like, "All right, we're doing okay now." Um I think I think it's it's very there's two there's two sides on that more uh I guess if you have to put it in a camp right-wing perspective is like you know, oh everything's good now, so you know, we don't even need to think about what came before, right? It's like okay, but there is an actual history. And then on the leftwing side, that's just as bad is like they don't even recognize that there has been progress. It's all victimhood. It's all bad. Women are oppressed. All this stuff. It makes no sense. You have to acknowledge the realities of history. And you have to also recognize when we're trying to change society that we actually have changed society and people are doing better than before. >> The thing that's kind of an unseen cost of always looking with a historical context that forgets the present. >> Mhm. is that it actually denies people who are in a good situation from ever feeling like they're in a good situation. >> Yeah, absolutely. >> You go, hey, hey, you [ __ ] arrived. I get it. >> Burdens from the past. Uh things that need to be remembered so we don't fall back there. The main fear is if we for if we don't keep talking about it, maybe we'll go back there, right? That keep a weather eye on that. Make sure that that's happening. But if you make progress in the present always neuted by what it where it came from in the past, you never actually give people the gift of feeling the opportunity for celebration. >> Couldn't agree more, but you're evil for saying that. So >> I'm aware. It's fine. I've been called it a lot. Uh people aren't [ __ ] >> Caleb Hammer. Like that's the I did I did a 4-hour debate about the birth rate decline. Uh I could have just >> Who? >> Uh it was uh Steven J. Shaw, who did the birth gap documentary, uh Simone Collins, who >> did they say people are [ __ ] cuz they're not. >> No, no, no. It was a demographer, a pronatalist, and a statistician. Uh it was broadly broadly in agreement, although the reasons were what was being debated. It was kind of I've been deep down this rabbit hole for a while. Um >> which if anyone knew the actual reasons, we would be able to fix it, right? And every country has tried to things and it's it worked in Hungary for a year and then it fell back. Correct. There's there is a number. So Lyman Stone would be an interesting one for you to talk to from a like economic implication. He's like Institute for Family Studies, which you may have referenced at some point. He's the man when it comes. He's like tip of the [ __ ] spear. >> Um there is a number that you can pay people to fix the birth rate and it's not that much, but it's [ __ ] loads compared with what we spend. It's like 10% of GDP. >> It's a lot. I mean, it might be required at some point, right? Because that's like collapse a human civilization at some point. I don't think, you know, luckily in the United States, we're like generally pro immigration. People want to move here, so we'll be fine. But places like uh South Korea are done. >> Yeah. For every hundred South Koreans, there'll be four great grandchildren. >> Yeah. >> 96% gone within a century. >> What's the same? >> So, have you looked at um the economic implications, sort of macroeconomic implications of a a declining population? >> Yeah. I mean, I'm more focused on the retirement when we were um uh these numbers. I'm going to have to be a little fuzzy on because it's hard to remember exactly, but when we first started a so a social program called Social Security that has good intent, not an evil program, mismanaged, not smart in the end. You know, we had like a worker to retirey ratio of like 100 to1. Uh what are we at now? We're like a it's close to like 10 to one or something. You could have these numbers. Um but the the closer and closer we get, the more burden it is on the individual. And if you have social systems that are solely reliant on a growing population, growing tax base, it doesn't work. They fail. So all the social programs are starting to fail. You're seeing them starting to buckle. Social Security is going to have a mandatory 25% cut in 2032 is what's projected. >> Why? >> So when there were more workers, we were contributing more money than was going out. So that money was starting to build >> because old people don't work, but they do need caring for. >> Yeah. Which makes sense. and the that social security uh fund was starting to build. But where was it like around early 2000s or something, we started to take more out of it than was going in as the baby boomers started to retire and also there's just less people replacing them. And by 2032, unless the retirement age changes, unless the cap on social security tax changes, unless we >> reduced the cap on social security would be brought down >> or or we also cut benefits to those who are already high incoming. you know, all controversial for different reasons, whatever, that's not the point. But unless something changes, the fund goes to zero and then the only money that goes out is the money coming in. And that's projected to be a 25ish% cut by 2032. >> [ __ ] me, that's going to be unpopular. >> Oh, it's it's whoever's president is going to get killed. I mean, it's going to be bad. We'll probably just honestly, they'll probably write a law. We'll borrow the difference and our debt will just go even further. Probably what's going to happen. The last time we made a compromise was during the Reagan administration, if I'm not mistaken, where they barely w raised the retirement. You have to remember the average lifespan for 65. >> Yeah, right around there. And we raised like two years. The average >> lifespan for when we started social security was like if you actually make social security, you're going to live for another two or three years. Now you're going to live a couple decades. So it just doesn't it doesn't make sense anymore. it though. Even though it's super unpopular among the highest voting base, the boomers, social security retirement age for what it was actually intended to when FDR signed it into law should have been raised almost like 70 by now, >> which sounds evil. >> Yeah. Does anybody like the idea of working and working and working? This is >> I've still not been able to thread this needle properly. I've done 4hour [ __ ] discussion with the best on the planet as far as I could find to talk about this stuff. endless episodes with Steve and I've had Lyman on before. I've had Simone's husband on. People that are skeptical, critical, all this stuff. I'm like, dude, like if you care about the quality of life of people, more people are going to be old in the future than ever before. We're going to have more old people than ever before. And where do you think the money to support them comes from? Like, do you want grandma? And nobody I've said this a gazillion times. >> Nobody should have kids that doesn't want to have kids. >> Nobody should have kids that doesn't want to have kids. There is a more extreme position than that which is it's your duty to have kids to feed the economic engine. I don't subscribe to that view. But like >> just the fact that birth rate decline is not a problem is kind we shouldn't we shouldn't consider it especially from a left-leaning perspective. We shouldn't consider it because it's good for the environment. Like [sighs and gasps] I I've really I've really struggled to thread this needle like properly. >> It's a hard one. The thing that disappoints me is, you know, before I was even born, right around when I was born in the 90s, they considered taking that social security fund and having it having that money get put into something like the S&P 500, >> which at this point it would be insanely large [laughter] and we would have enough money to do whatever we want. We would have like a Norway level uh sovereign wealth fund. It'd be incredible because Norway is actually capitalistic and smart with their money apparently via the government. But we said, "No, let's tie it to the low t bills like Mr. Ori was talking about which is another reason why I'm against like low tea bills cuz guess what didn't grow now it's being drained. >> I saw some stats around uh Samachman Freed's investments with FTX uh Anthropic was one of them. I think SpaceX was another one. And because during administration bankruptcy whatever the [ __ ] it's called what's it called? Liquidation. Like when we sell it all, sell everything, get the value of it right now, and just give people the pennies on the dollar to what it is that they're owed by this bank that goes under that was run by a guy that played League of Legends while he was on Skype calls. >> If they'd held to now, everybody would have got their money back. >> Mhm. >> I mean, you could have paid people probably double, triple, quadrup. Their investment in Anthropic is worth like a [ __ ] insane amount of money. The same thing goes with SpaceX IPO that just occurred. That's a question. What do you make of having the world's first trillionaire in existence right now? >> Yeah, it's interesting. A lot of people are very angry about it. Um, you know, uh, a lot of I I'm happy that you can get rewarded in this country for the things you do. We're getting internet beamed from space. I love my Tesla. The self-driving is insane. people haven't been in a recently updated self-driving Tesla. Like you can read, eat, drink coffee, scroll on TikTok, and the car will get you somewhere perfectly fine with without looking at the road. It's one of the crazy that's technology no one would have even dreamed of 20 years ago. The things that we're doing, the private space, like I think you should be rewarded for it. Trillions a lot. It's crazy. But even if the argument is you're against someone being a trillionaire, what's then the action? The action is you're forcing him to sell a position of his own company. You're saying we're taking a gun and we're saying you must sell a position of your company to pay tax on it. I'm against that as a philosophy. That doesn't make sense. Should a trillionaire exist? I don't know. But if you decide the answer is no, the actual action that comes from it is the world's worse than whether or not a trillionaire should exist. Forcing people to sell their companies crazy. >> It's a really interesting argument. I understand inequality is one of the craziest disorders of human behavior. So one example from Candace Blake who's out in Australia uh she looked at levels of uh self- sexualization and beautifification of women and correlated posts on Instagram and Twitter at the time with the geoloccation it came from and looked at the wealth inequality in that area. women that were in higher wealth inequality uh ecologies posted more sexy selfies did more self- beautifification and more self-exualization. The reason for that her theory was when you see both how high you could climb and how low you could fall if you pick the right or wrong mate that on average will be at least contributing to the household or maybe the bread winner and the primary provider for you and your future family. You start to turn on the taps in terms of the way that you work. And that's one example in one very small niche of one very small study when globally everybody is now aware that there is a guy on the planet right now that could lose a trillion dollars and still be the richest man on the planet. >> That you and me and everybody is closest to the second richest man in the world than the second richest man in the world is to the first richest man in the world. That is deranging. It's deranging to the way that people see their place in society. >> It is. I just try to put it in perspective. And if the thing the thing is I've I'm I do well and I'm okay with paying more in taxes if that's the argument. I'm not okay with it if we're not even able to investigate fraud. If we're not able blah blah blah, you know, there's a lot of things. The bureaucracy is insane. [ __ ] So, I would rather not pay more in taxes until we actually get our [ __ ] figured out. But even still, I would be okay with paying taxes if we say it's going to fund something that's going to help people. But the conversation's gone away from that to saying that man has a lot of money. That's evil. Let's take it. That's no longer the conversation. I want to fund something that's actually good if we're going to raise taxes. So, it's I they they've lost me at that conversation. And also, they think like where does him being a trillionaire affect you? For me, I think what actually affects someone's personal life is they have to call a cashier to unlock a toothbrush at a corner shop. That's actually impacting you on a daily life. zoning laws is impacting you because it's preventing houses and higheres being built, which impacts your housing costs, student loans being tied basically to hiring more administrators. That impacts you. There's so many more things impacting you than someone whose companies that he owns, you know, large stakes and went public and they're being valued high, which made his net worth go exponential. There's so many more things to address first than freaking out about that. But something in the human nature, especially of the more extremists, I will say, and more populous, is like that person has a lot of money. I don't let's take it. But even if they took all of his money, I think everyone gets like what is it like a,000 or 2,000 bucks. It's something it's something that it would actually be really nice and for a lot of people could be life-changing, but that's one time. It would drive inflation extreme and uh it would actually just be damaging in the end cuz then we don't have life-changing technology. >> Why would it drive inflation extreme? Speak to me as if I'm five. Well, you know, >> talking to you like you're a [ __ ] LLM here. [laughter] >> Can you imagine if you had a Caleb LLM just shouting and screaming at you all the whole time? >> A rapid supply of 350 million Americans spending a couple thousand bucks just out of the gate. Like a trillion dollars just pumped into the economy like that. I mean, that'd be brutal. Just look what we did during the pandemic, pumping hundreds of billions. So, it'd be pretty brutal. >> Whilst also sounding like the sort of thing that we would want, >> but not. Yeah, you need people to spend money. >> One in the micro, but not in the macro. >> Yeah. Not so much that it drives insane hiring sprees that pushes everyone's incomes to insane levels. That pushes inflation higher. >> What are the biggest financial red flags in dating? >> Uh, high car debt would be absolutely horrible. If I pull up to that TikTok girl we saw earlier in $50,000 car, financing a $50,000 debt on a car. Like, we'll hook up, but we're not staying for a second. [laughter] So, Okay. >> It's a big red flag. >> High cod debt. What else? >> Um I think it's nice for people to offer like splitting the bill on a first date. You know, I like being I guess the man in like paying for it, but I think it's actually it's a green flag when people, you know, if they expect you to pay for it, I think is a bit of a red flag. You know, if they're thinking like they're that special thing >> in entitlements, >> I don't know. It just kind of turns me off specifically if when people have that main character syndrome and it gets tied into the financial situation of like expecting things, you know, that's kind of gross to me. A [ __ ] degree. I mean, less less [ __ ] Just toss that out to the side. >> Yeah. >> What did you do your degree in? Yeah. No, sorry. This is not going to work. No, you meet me on an imaginary imaginary. >> Would you date me? I dropped out. >> Uh, how much debt you got? >> Uh, 25,000. >> That's all right. I dig you. >> Okay. >> Yeah. Nice tits. Thank you. [laughter] [snorts] >> Um >> car payment [ __ ] degree. >> Yeah. Um and that entitlement of like expectation around spending. Okay. >> On them. >> Anything else? What what uh >> low ambition? And I know that's kind of tied to finances in general, but if someone's that ambitious, I don't need someone to be ambitious to want to go make a million bucks a year, but if someone isn't driven in their career or even just hobbies, if they're not driven, what a turnoff. I think going uh low ambition, high materialism is the perfect cocktail. It's like, hey, you're allowed to be materialistic as long as you've got the conscientiousness to know where the limit is and to be able to keep the front of the funnel pouring in. >> Yes. You've described a gold digger and [laughter] we've had lots of them on the show. They're the Oh, I love a couple with a gold digger. I can just I can just verbally punch all day. >> Why? >> So much fun. It's just so much fun cuz I see the person the typically unfortunately a man, but I've actually had the reverse a few times, but usually the man's actually working, making a lot of money, and she's over there feeling entitled, and I see all the spending in their own statements. I see proof in front of me of her just spending all this money and feeling like they should do all this while this guy over here is struggling working two jobs. It is just it is a brutal thing. And the nice thing, the thing that I love about it is seeing that light bulb go off in his head when he notices this person's just using me. >> How many couples have broken up because of what you revealed financially? >> Uh very rare on the show. We've we've had a couple had one divorce. It wasn't from the show and it was a couple years ago. Just a bad marriage, but it's actually pretty rare for people to break up. M you should couples merge finances. >> Uh at some point it's nice to have a joint account that incomes go in and then bills come out of and then we can send uh fund money to our own accounts from there. I think after marriage makes a little more sense at least common law marriage cuz then you have some uh some of those protections in the case of death or whatnot. But um yeah, I mean it's fine and it's fine if people want to keep it separate as long as they can actually budget the household. People just usually fail at that without getting insight on the full thing. >> What's your perspective on prenups? Yeah, it's fine if there's like a big wealth divide. >> Yeah, big wealth divide it makes sense. I think if you're both making 100, it's a bit weird. >> Do you often see financial infidelity like hiding purchases or debt? >> So common and most people don't think it's actually much of anything, but the other person feels really hurt in the end. They just don't realize it because spending is just one of those things where it's not it's not viewed as extreme as cheating. It's not as extreme as cheating, but it does impact the other person that they're hiding it from more than they think. The moment it's exposed on the show, you can see the pain in their face. >> It's still trust, right? >> Yeah. It's trust. It's exactly trust. Not talking to the person. It's a lot of things. And it it hurts them personally. >> If you're not being honest with me about this, how can I be >> certain that you're being honest with me about anything else? >> Oh, yeah. >> Absolutely. >> It's a vicious cycle with that stuff. What uh is there a like sex difference in what men and women go broke doing? Honestly, no. Not really. I mean, I'll get a little >> They're able to be equally [ __ ] in similar directions. >> [ __ ] I mean, they everyone loves collectibles. They just get like different. I got L booooas on the women and I got Pokemon cards on the men. >> Everyone loves collectibles. >> Well, no. No. No. But like, you know, it's like split down the genders. Like, like both genders love it. Does everyone >> obsessed with Warhammer 40k and other's obsessed with Beanie Babies. >> Exactly. So, I mean, you'll get some more frivolous spending. Maybe a guy will put some more into his car, a girl will get more extensions, but it's similar levels of [ __ ] What's actually interesting is, you know, talk about young men gambling issues, but the it's actually pretty similar in terms of percentage. Young men and young women, it's just not talked about. Men is higher, but it's pretty close. >> It's pretty close. >> What do you think of prediction markets? What's your >> It's fun. Just like drinking, just like smoking weed, um, anything like that. I think it's cool if you can control it. If you know you have an addiction or an addictive personality, you need to keep yourself away from [ __ ] like that. >> Yeah. Mental health issues impacting spending. >> Is that true? Like shopping addictions and stuff. >> Yeah. Or if you're depressed, it feels good to get that dopamine spike of a quick purchase. Absolutely. Um yeah, mental health affects everything in the end. It's kind of that that discipline thing, right? Everything stems from the discipline when it comes to personal finances. If your mental health's bad, usually your discipline's going to be bad. I can't remember where it was I read this. I think it might have been the UBI test study. There was two that were done 2024. And uh one of the points there was if you're poor, you can only really get small doses of pleasure from small things, but that means that you're more likely to spend frivolously because you need to relieve the stress. that point that we made before like if you have not that much pleasure in your life and you're burdened with worry and you don't know what the future has in store for you, yeah, you're going to go and buy cigarettes because the cigarettes alleviate your suffering. >> Mhm. >> It's there's certain things I remember there's this example from Sam Harris [ __ ] years ago. It was during the some of the more crazy race conversations around mid2020 and I was struggling to see uh philosophically consistent arguments about um white privilege and he came up with one that I thought was so [ __ ] cool. And he said, "If I've ever gone through TSA and I've had my bag pulled, I've never once thought that it's because of my race." Interesting. >> Isn't that an interesting kind of white privilege? I've never once thought that. Like, oh, I I [ __ ] up. Like, I left water in the water bottle or it's a random check by TSA cuz they've got to do like this is what they do. >> Yeah. >> That is not true if you're of a different race. >> Yeah. >> That's just straight up not true. And the same thing, the same thing to a degree is also true when it comes to being poor. that there are these sort of secret psychological loops that people go through about what their financial position means to their identity, how they then cope with that identity, with their behavior, which feeds back into the financial position. Yeah, >> that seems to be the >> one of the very unseen death spirals, and it's too it's too complex to put on a billboard. It doesn't sound sexy. Like what what [ __ ] intervention are you going to have as a politician or as a a potential president going and we are going to teach people how to intervene in their conscientiousness when they begin the downward death spiral of sedating themselves from feeling bad about their financial position doing things that makes a financial position wise. No is way too complex despite the fact that it might be one of the key driving forces. Okay, how can we how can we give people I mean we do we give people [ __ ] social media which is some of the freest dopamine that you can get on the planet but I think all that that really does is raise the waterline of minimum dopamine that you now need an even bigger dose to be able to break out the top of it. I wonder whether we would be in better financial positions without social media. >> Oh probably. I mean, we see things. We see the lifestyles that people pretend they have all the time. And [laughter] we like to chase lifestyles. We're jealous. We're jealous people, jealous species. It makes sense. >> I think that's one of the drivers of lifestyle inflation. >> And unfortunately, poor people will go broke trying to look rich. >> Oh, yeah. The car especially. Absolutely. >> Is that What's the dumbest purchase category that people constantly overspend on? >> Constantly in America. It's certainly the car. Well, and it's baked into our infrastructure. You have to drive. You have to drive to have a job to have to drive. Like that is the reality. But people will overjustify how much car they need. Needing the new car because of the new safety rating. Like cars would literally kill you 5 years ago or something. Like I don't really get that. Um fuel efficiency. Like you can make some arguments and stuff especially in times like now where gas is up. But people will justify the heck again like her out of getting a $50,000 car loan for a car that you do not need. >> What is the rough rule of how to work out what price of car you are able to afford? >> It comes down to the monthly payment. If you get a debt, as long as you put 20% down, it is a three-year term. The minimum monthly payment should be no more than 8% of your income. If it is, then you're getting a car that's likely too much out of your affordability range. >> Seems like a pretty simple formula. >> Yeah, it's easy. It gets most people that a pretty good car. >> What does that get an average earner making 50 grand a year? >> I don't know. Should we do the math? I can do the math. >> Do the math. >> Uh, okay. Um, well, [ __ ] Then I have to like understand what 20% down would be. So, it' have to be post 20%. Okay. Okay. Okay. $50,000 because it is gross income. talking eight. So that's 40,000. You can do 40,000 divide that by 12. So I mean that's pretty chunky. Um, no, no, no. Sorry, that's not 8. I did 80%. Okay, so $4,000 by 12. That's $333, but you have to come. So you as long as you put 20% down. So three year your car payment $333. >> You can probably get a good bit of car for that money. >> Decent. Decent. I mean, interest rates depends on your credit score. You might have to go a little higher. Then you just need to pay it down quicker. And I'm okay with that. You just got to put extra towards it. You just don't have to freak out about it if you're doing that. If you're following that rule, >> I guess a lot of people need credit to build a financial future whilst also struggling to build credit to qualify for it because they lack credit history. >> Yeah. But there's credit builders now. There's charge cards now where, you know, you put the money on there to spend, but it's building credit. Uh, so there's a lot more resources today than before if people are just willing to look. >> Can someone become obsessed with financial optimization to the point where they make their life worse? >> I mean, our friend, our friend Graham Stefen, I think a little right. I mean, I don't know is uh I don't think he needs to I love the dude. I love the dude, but everything you see on camera is actually what you get in reality. And he will micro freak out about just a little penny he's going to spend on lunch or something. And he'd make more money if he used that mental effort on producing a piece of content. Isn't that a hidden cost? A strange kind of hidden cost of obsessing over finances too much. >> But you know what? He has fun with it. So, it's actually probably not making his life worse. >> Well, yeah, because his enjoyment from scrutinizing and saving is greater than the enjoyment he would get from the spending. Yes. >> It's this weird I mean, he was built to be a saving engine. >> Yes. >> He's like the [ __ ] LeBron James of saving money. But I think for some people if you get to that way and it's not actually your passion and it's more coming from like let's say I don't want to overuse the word trauma but trauma of like growing up poor. So now you're just freaking out about it constantly. I think that could you know hurt your lifestyle. >> Interesting archetypes of people that grew up without money. I I grew up without money. And uh some people grow up to I've never had this before. [ __ ] it. We ball. >> Or I've never had this before. It might be taken away. I'm not going to spend it. >> That's us. Yeah. You read Die with Zero by Bill Perkins. Oh, dude. >> I know, but I haven't read it. >> Really fun. It's three-hour read or listen or whatever. And um he's just got some interesting ideas that >> I would be you I know you're doing financial audit. Are you sitting down with other people that are Morgan Hels of the world, the Bill Perkins of the world? Have you got any desire to do that to because I would love for you to scrutinize financial philosophies from people that have got popular financial books. It'd be it'd be fun, but I also have to acknowledge even though there's some topics that I'm interested in learning from experts from, I'm no different from just a dude off the street. I'm not a [ __ ] expert. Like, I'll listen to people, but it's hard for me to like push back against a true expert in their position. That's why I like keeping to what I do. It's basic. Personal finances is so basic until you get to the crazy [ __ ] It's so basic until you get to the top 0.1%. Is this budgeting, control, discipline, low index funds, lowc cost index funds, target date retirement funds, emergency fund? That that's the [ __ ] I'm into. Bread and butter. >> You've exited all of your rental properties. >> Exiting. Yeah, exiting. Um, better return on investment in the stock market all day, every day. No hassle either. I mean, I'm not the one fielding the calls when something breaks, but you know, it's just every month is up and down depending on what needs to be repaired. And just even if nothing needed to be repaired, the only thing you take advantage of is some leverage there, which can be nice, especially if the market booms. But in general, real estate has lost now to the S&P 500 just consistently. I would love to own a piece of commercial like you do. That's great. You know, you get some some uh quick depreciations on there, which is really nice. Uh so that's something I'd be willing to get into at some point. >> I'm unwinding all of the houses I have in the UK except for the one that I I still live in. That's like that's still my my place of >> well that's a collapsing country. So >> that's true. That is that is true. But I mean I there was a period and this was sort of what I grew up with. I was very fortunate that when I started doing business the guy that was my partner was 5 years older than me. am in the exact same industry. I'm very very financially responsible and I only child so didn't have anybody that was entrepreneurial understanding the UK system and working in the same industry with the kind of cash flow and and the sort of pacing that we would get. So I just followed the same path that he was on and his was every time that you get to about £30,000 of spare cash deposit on a berlet student property between two and five bedrooms in a good student area hand it off to a management company. They'll take between 10 and 20%. >> And away you just >> 20% is fine. >> Rinse and repeat. I managed to negotiate to 12. But uh rinse and repeat. Okay, that's that's pretty good. And let's say I never talk about money. This is my British, but I've got you here. So, let's say uh the best purchase that I made was £150,000 a five bed student property in Heaton in Newcastle and I would have put 25% down. So, I I think I I think all in with stamp duty and fees and all the rest of the stuff. I think I put somewhere in the region of like 50 grand down and that would make after everything £1,800 a month and then there would be maybe some repairs that were needed on top. So let's save 1,500. So that's like 18 grand. >> Mhm. >> 18 grand a year. Great cash vehicle. >> Yeah. >> But what you were really doing it for was to tie because it's an interestonly mortgage. So, you were just hiding over hoping that everything would be kept and maybe it would spew out a little bit of cash and that would be lovely, >> but you were waiting for the capital gains. That was what you wanted. I'm going to hold this for 10 years and it's going to go from 150 to 200 to 250 and then it's going to be and I'm unwinding all of these properties and like the future that I promised myself has not come to fruition. It's they've all appreciated. Hooray. But Karma's changed the capital gains tax. I'm getting fist [ __ ] off that. and the gains that I thought I was going to make didn't occur. And I'm in the exact same position as you. I also now, this is my fault, I have to pull the [ __ ] money across from pounds to USD. >> So, I'm going to get fist [ __ ] on the exchange and I'm going to have to do something creative in order to be able to I it's company to company, so it's relatively like linear to do limited company in the US, the UK to an LLC over here. But like I was thinking this is going to be, you know, retirement fund stuff and maybe if I'd held it for the rest of time and I never left the UK, that would have been it. But it when I started and I was behind Dave, business partner that was sort of laying this groundwork for, hey, this is how you get to a financial level of of real comfortability. That that route is is not the same anymore at all. And and everybody [ __ ] hates landlords. So, like something that used to be, hey, you're holding on to this property. You're making sure that it's kept to a a high standard. You're u making sure that we're well looked after, you're a good landlord, even if there's a management company in between you and us. Uh there's no prestige really associated with it now in the same way. >> No, which is kind of interesting. I mean, I got [ __ ] from the landlord thing, too. I mean, I don't really care because it's usually coming from people that have no impact on anything in society. But uh a couple of the places I bought were basically unlivable and I brought them up to be a place for people to live in. And people like literally they were on the market. People were not buying them to bring it up to live in cuz it was in the student area of Western Michigan University. No one was going to live in the student section. No one was buying a house to live there. >> Uh so it was places that just weren't being lived in that I made livable and actually benefited. There was a period in the UK and I came in after this which is it does make sense. One of the big criticisms you took a uh two bed or three bed classic family home and you rejig all of the walls and the construction to turn it into five or six or seven bed student properties. >> Mhm. >> There's no [ __ ] family in Newcastle that needs a seven bed house in Heaton. >> Uh that is basically locked in for the rest of time that this is going to be a student property. And now if you ever stop you, it's what's called an HMO. It's a house of multiple occupancy. If you ever take it out of that, you can never get the license back. So they're now trying to reverse that back to try and encourage families to buy these houses. But the problem is I'm never going to sell one of my houses. Well, that's not I would sell it to whoever wants to pay the price, but no family is going to pay the price that I can get from somebody that wants it as an investment property because they are going to have to knock all of these [ __ ] walls down and turn it back into what it was before it was turned into a student house, which I didn't do. Governments will do any rule, regulation, tax, whatever to think they're trying to encourage something other than literally just make zoning laws better for people to just build what people are demanding. I will never understand it. That's why that's why I love this town. I love Austin cuz we let people build more houses on units now on lots. We let people build higher houses. We got rid of parking minimums where the government force you to have a certain amount of parking spots. It's so stupid. They'll do every policy besides just letting developers build what the market demands. Dude, there is a a lot near Zilka that I drive past sometimes. And it used to have one old style ranch house that probably had two beds. It was up on sticks. Walk up a little set of wooden stairs to get to it. Classic wooden ranchy house. And it had a trailer thing that was for some for pancakes or it must have been a business that the person had started at some point. And there was a bit of a yard outside or whatever. And then one day, no house, no trailer, just flattened. Like there'd been a miniature atomic bomb that went off. >> There are now three ground floor, first floor, second store story >> houses built on this one [ __ ] plot of land. >> Yeah. >> And they look nice. They've I mean, it's still all green and insulation and wood and [ __ ] at the moment, but >> And that's nice. That's due to literally Texas and the city of Austin just a couple years ago, like passing those kind of reforms. I heard that the housing problem in America would be fixed if the zoning laws were changed. That there's enough demand and enough capital to be able to make the houses. The only issue is that the nimi problem. Yeah. It's the nimbies. Yeah. Which makes sense. I mean, if you're thinking about your own interest in California and LA, you want the cost of your house to continue going up forever. That's usually where the majority of your wealth is. You can borrow against that. So, of course, you don't want more development coming in, housing prices to fall. Well, it's economically against you and you're usually a big voting block. You're a big uh important part of local elections and you can be a loud voice at the city council meeting. So, it makes sense that people are against it. But, I don't know. I'm MB all the way. Build what the market demands. I think a couple restrictions makes sense. I don't want like a uh you shouldn't be drilling for oil in someone's backyard, you know? I don't know. I I'm overall pro data centers cuz the information around it is a lot of misinformation, but do I want a data center in my exact backyard? No. I'll build them in the middle of [ __ ] nowhere. That's what I like. Um, so it's just like, yeah, there's some restrictions make sense, but let the market build what the market demands. >> I wonder how many people are eat the rich. They're taking the money that young people need in order to be able to buy houses whilst also being I don't want any houses built near me. >> Oh yeah. Usually the biggest nimbies are the ones that say in this neighborhood, you know, the signs, what is it? In this neighborhood, we accept >> science is real. Women are women. >> Women are people. >> Black people are >> I there's I know the exact sign that you mean and >> they're usually the nimbies. >> Yeah. Yeah. Interesting. How much money do you need to raise a kid? >> Um well uh definitely less than people think for sure because I mean forever throughout human existence, you know, we were just having kids and it was fine. It is a little harder today. But going through public school, um, getting them on your insurance, all that good stuff, if you're not thinking about having to get parent plus loans, like you could you can do it on just a normal middle class salary for sure. You can have quite a few kids, but an exact number, I don't have that. >> I think people believe that it's more expensive than it actually might be. But again, a lot of that is >> what do I think I need and what do I think that my kid would need versus what what is actually needed. This is an interesting part of that birth rate debate that we had where in order to have the kid realistically assuming that you don't have some huge windfall of money, the total pie of money that you have to spend is not going to change all that much. In fact, it might go down is one partner needs to take time off work in order to raise them and then child care costs and all the rest of it. That means that your lifestyle needs to take a hit. You need to I'm not going to be able to go out for dinner as much. I'm not going to be able to upgrade the car as frequently. >> And that feels like that feels like getting poorer. >> Yeah. where what you've done is you've just reortioned the money from what would have been car to now what now is child >> which I empathize with it makes sense so if you don't want to have kids don't have kids that's kind of what you said earlier right you know we shouldn't force people to have kids but we also should shouldn't be doing misinformation of people thinking they need to have an endless supply of money to have kids like >> we're richer than ever before and people have had kids when we were poorer than ever before like you do need money you need school supplies You do need to make sure they can be on your health insurance. Like there are a lot of things you need money for, but we overemphasize it for sure. >> Forcing people to have kids is horrendous, but scaring people out of not having kids when they could >> because of misinformation is also something that never gets spoken about. >> Oh yeah. >> Yeah. Caleb Hammer, ladies and gentlemen, dude, you're awesome. I appreciate you. I think what you do is great. Where should people go to check out all of the [ __ ] you've got going on? >> Caleb Hammer on YouTube. And I recommend everyone download. Change their lives. Unreal. Until next time, man. Appreciate you. >> Thank you. >> Goodbye, my beauties. >> Dude, >> that was fun. >> Thank you very much for tuning in if you enjoyed that episode. Another one that I know you love is just here.