Dumb Financial Decisions That Americans Make! (Do You?)
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- เผยแพร่เมื่อ 1 ก.ย. 2022
- Dumb Financial Decisions That Americans Make! (Do You?)
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One thing I am learning is to be very picky about “picking your herd.” I recent lost my entire friend group due to death, betrayal, and other BS. It has really taken a toll on me but I am realizing that this is the perfect opportunity to be very intentional about who I let into my life from now on. I now have the opportunity to find and engage with folks who have the same financial outlook and behavioral mindset I want to cultivate.
I felt that! Congratulations on having such a positive mindset. You deserve a wonderful friend group. ❤️ keep going!
just a little note, the show at about the 2 minute mark is called the curiosity show from australia. was fantastic in the 90s, taught us kids a lot about science and how everything worked.
The rich stay rich by spending like the poor and investing without stopping then the poor stay poor by spending like the rich yet not investing like the rich
People prefer to spend money on liabilities,Rather than investing in assets and be very profitable
Despite the Economic recession ,I'm so happy☺️. I have been earning $ 60,000 returns from my $70, 000 return from my $6,000 on short term
How do you do that?. I'm interested??
This must be an investment with Mrs Margaret
Yeah I’m surprised you mentioned her wow she must be very popular 💯
I have come to the conclusion that social media and services like Tik Tok are poison to my psychology. There's just WAY too much negativity out there and people tend to let it sink into them. I decided to go cold turkey last year for an entire month. It was one of the most peaceful and positive months of my life. I rarely ever look at FB, Tik Tok, Insta, etc these days. It's a profoundly better way to live and I don't feel the weight of the world is crashing in on me. I only have worry about and deal with the obstacles that are right in front of me and then move on with my day.
8:50 actually in the case of eating the food that you don't like, it DOES make sense to eat it anyway because it's providing calories/nutrition, regardless of how you feel about the taste, so it DOES make sense to eat it anyway
Agreed! Do not waste food
I wouldnt say regardless, you might not be liking it because it was made with ingredients that were going bad. Spare yourself getting sick and throwing up or worse, then youre out the money for the food, doctor visit and the calories
I feel like the bit about loss aversion is misleading. If I can play the coin toss game at least 10 times, then yeah, I'd definitely play; but if I can only play once, I won't. Mathematically, the expected outcome is positive after many rounds, but after one round, I still have a 50% chance of losing $1,000 I didn't need to lose. This is exactly why the standard advice is to not invest money for less than 5 years -- there's too high of a chance of it going down over a small sample size, just like a single coin flip.
These points they bring up are biases, not flaws. They're things we should be aware of when making decisions, but we shouldn't treat them as always leading us to make bad decisions.
Congratulations on 250,000 Subscribers
Can you do an episode on whether you should put money into a traditional 401k vs roth for someone who will recieve a pension at retirement age... please and thank you!!!!
Do the Roth. Since you have a taxable pension at retirement. The tax free Roth will help with lowering your taxable income in retirement.
You are almost always going to be better off with a Roth. For a number of reasons. If you don't need the money at retirement due to your pension, then leave it and let it ride.
The tricky thing about 401k's is they are taxed as regular income and they have mandatory distributions after 72.
If you don't have much in there it's not a big deal. You might end up in the 22% tax bracket depending on your pension.
If you can mass millions... then these distributions could force you up into the 32-37% tax brackets and the government is going to take a HUGE cut.
Roth IRA's are just about always the best retirement investment because you can pull from them tax free.
I had a coworker whose husband had a great job he loved and intended to work into his 70's in order to avoid the 32+% tax bracket when he hits 72 they started doing Roth IRA conversions. They used the extra room they had in the 22-24% tax brackets to shift enough money out of the 401k that they avoided the higher tax rates. The result is they saved 10-15% on taxes and now have millions growing in a tax free Roth IRA. Mandatory 401k distributions shouldn't force them into the higher tax brackets anymore.
OMG The Curiosity Show! I haven't seen that since I was a kid 😊
Good morning! Happy Friday everyone!
The dumbest financial decision I’ve made is paying off my $10k student loan over the past 4 years. That decision cost me about ten thousand dollars.
The plan includes payments you may have made since March 13, 2020, so you should be able to get at least some of that back.
So many in the same position. Parents too who sacrificed to pay , and I feel for all the people who sacrificed body and soul in the military partially for free education. I can’t imagine how they feel. Or the people who just didn’t go because they were smart enough to avoid debt and go another way. So, so ,so many parts to the other side here. I’m dumbfounded by all those who claim not to see the “other side.”
@@CAGChannel1 So you're saying it was a lot of hardship, strife and stress. Well, maybe consider the fact that some people will not have to suffer through that. Unfortunately, sometimes to make things better in society that means we need to accept that others won't have to struggle like we did. Isn't that what we want for future generations? For life to be better? Why do we all have to struggle? How does millions of people struggling through debt just like you had to, validate your life any more? It seems like you're perceiving life as a zero sum game. It's not. We should hope that others don't have to suffer through things like we did, otherwise what is the point of working towards a better future
@@fray3dendsofsanity I probably have several decades of life on you, I’m guessing. So, it’s really not possible until…..well, life. But I hope you have a great life and much insight will come like it does to us all as life happens. You will see more sides of many issues for sure as most of us do just through living. I didn’t say I had debt, by the way. Just please always, always. try and see both sides of the pancake, no matter how thin it may be.
@@fray3dendsofsanity just as a side note, the current loan forgiveness program and the idea you described are not aligned in spirit or particulars.
Herd mentality: I am sure it happens to me sometimes, though I am not aware of it when/if I conform. But I am vividly aware of the many times I do not conform, including when watching movies at theaters. I hate clapping, yelling, cheering, and standing up in theaters. I just want people to sit there quietly. If I saw weird standing behavior like in the clip, I would ask the people doing it first. Then I would ask the secretary why people were doing it. And I would try to move to another chair away from the weird standing people. I just dont participate in things like that, and I dont mind standing out in a crowd from non-conformity.
beanie babies, NFT's, etc. I have never participated. I am exempt. I just dont participate unless fundamentals makes sense
I definitely eat leftovers when I don't want them because I don't want to waste money 😩
great episode!!
I don't know if I'm smarter than the average person. But I do avoid actively managed mutual funds like the plague and just invest in S&P 500 index funds. I also have zero interest in flipping houses.
Im 22 years old and have 100% in snp500 set forget and dollar cost average i have outperformed everyone in my family 😂 if you cant beat the market join the market
Warren Buffet would approve 👍
I just lost $13,647 in flipping a house over 21 months after being told it would 120 days. Smh
A bad tasting burger isn’t sunk cost. You would need to replace the food if you don’t eat it. Meaning you will spend more just because you’re being spoiled about taste.
Read the book Nudges. It will change your life.
Jim Rohn says it's just as valuable to study how people fail as how people succeed.
Wow I just noticed the 250k subs in the background. I’ve been a watcher since like 60k. Great job! Glad you guys are growing!
The pen looks like its spinning and I can force the window to spin as well to overcome to illusions.
I really appreciate all the good advice both of you guys give here in your channel. Thanks a lot!
George Carlin has a bit about this too 😁
The amou8nt to have saved by every age and the amount required to retire. Is this per person or per couple?
It’s a good question. A married couple will have a budget as one, but plays by a different set of rules.
Don’t go off of fixed dollar amounts, but do the math on your own financial situation, your goals and desires. A good rule of thumb is 1x the annual salary at age 30, 3x at age 40, then exponential growth to 20x your annual income by age 60.
every time Bo says because i get reminded of the who makes the chicken joke
I can write a book on my mistakes 🙈🤦♀️
Incorrect assessment on the Burger scenario. It was correct to eat it, because you paid for it and it had the protein and other macros needed. Forgo the taste concern, which is only sense preceptory, and get the VALUE from the purchase and saving spending, as the MGS states, on another burger where my money will turn into $XX.
Hi from AUS . I know that guy in the video. Loved to watch his TV show.
Aggressive Marketing and Master Sales Gimmicks causing Consumer Bankruptcy.
4 wheelers, jet skis, boats, golf carts a new zero turn riding lawn mower all come to mind lol
It's not dumb if you use them. If you enjoy jet skiing, or boating/fishing it's not dumb. If you own acres of land zero turns make sense.
1. Getting married
2. Getting a divorce
I made the decision to short starting early December last year based on Topping indicators and the fact it was a Super Cycle degree. Was that Dumb...lost nothing in 401k and shorted in personal account. Problem is that its NOT random but knowable. When you are wrong thats knowable also, so you can easily gt back in until it finishes dividing higher to the next impulse 5th wave.
I can actually see the window spinning in a circle.... 👀
Love your show.
That first video 🤯
Behavior ingredient ,deferred ,gratification,
At $1,100/-$1,000 a flip, I was willing to do it, and would hope I could do it over and over. At $2,000/-$1,000 I would be begging for as many flips as possible even if I lost the first 10 in a row, I would keep going.
Great video. I always tell people, the best book on investing I ever read (and perhaps the only one I ever needed) was "A Random Walk Down Wall Street" by Burton Malkiel". Also, we all fall pray to these pitfalls. I always say that everybody is "funny" about money, including myself. There are things that one person will spend a lot of money on that others would never, and then vice versa. I've wasted money on individual stock plays or hot mutual funds, luxury items. I've learned hard lessons, and I'm still learning, but I recognize how wise a show like this one is.
My biggest financial mistake i made was purchasing a brand new 2019 car. luckily i paid it off in 1.5 years. Now i invest at least $1,500 each month; not counting my ROTH IRA, and 403b
Brian I AM SO EXCITED
I bought a truck that cost about what I make in a year. But I don't make much and it was a brand new model. I broke some rules but I love it and I did put about 25% down.
"Don't buy depreciating things". I've never had a car payment, in my life.
Talking way too much during the window experiment. Thought it was interesting but didn't get the trick.
My biggest financial mistake I made ? The biggest mistake, if your a man, is divorce court. Nothing compares to that loss. Nothing.
OTOH the best financial decision I ever made was getting married over 30 years ago to a woman who had and still has similar philosophies on financial matters.
Always have a Prenup.
Also, when you're married you don't own 100% of your assets. You don't loose what you don't own.
Is it cheaper to keep her?
Probably also expensive for anyone to go through divorce
Is it the mistake of getting divorced, or is it the mistake of getting married? Honest question.
you need to update your sub count in the background. also congrats on 250k
Or, more likely, they film in advance...
The problem is too many Americans outsource their thinking.
With the pen in the window, I could see it going around.
Gonna be honest that pitch at the end made me think it was Sunday morning and the preacher was asking us to come down and be baptized lol
Real estate is a tough game. It's certainly not passive. It requires intricate knowledge of the local area, asset type and strategy to really be successful. Then there's a lot of risk. I own 3 properties and can attest to very expensive mistakes I fell into
Isn't the American motto "If I can finance it, I can afford it?"
I have never heard this before.
I really appreciate y'all's content and the way y'all deliver it. No offense to Dave Ramsey, but when I hear him and his team talk only about 50% of it makes sense, the rest is not logically correct to maximize wealth creation.
Almost everything y'all say including FOO makes logical sense to me.
how do you feel about spending money on a 0% credit card and paying off high interest debt with that money instead?
ive been paying rent on my 0% credit card and putting that rent money on my 10% card - the plan is to do this for the next 3 months until the high interest rate card is paid off
I personally don’t think it is necessarily a bad decision. It’s really impossible for anyone to say one way or another without knowing all your financial details.
Does anybody else listen to these videos at 2x speed?
This episode should literally be taught in every highschool nation wide.. been watching for YEARS and this is absolutely foundation level content that every single investor should understand. Well done!!
OK, I haven't watched this yet, but I am assuming somehow they got to my friends and family and asked them for a list of some of the financial decisions I have made... ;-)
Great stuff guys. This is the kind of thing that even if you’re successful you have to revisit every so often to keep your financial life in check.
Gee, that clip at 2.30 brings back childhood memories. The Curiosity Show, which was a kids science and education program in the 1970's & 80's here in Australia. Can't believe us Gen Xers have hit our 50's. Maxing out our superannuation (your 401k) contributions has set us up for a tax free retirement in the coming decade or so.
Good thing for me the overpriced cars and a lot of the high-end expensive stuff doesn't appeal to me. A lot of it falls in that category of trying to impress other people and it just doesn't work for me.
Humphrey rules
Ahhhh don’t talk while playing video that has sound. Very unpleasant.
Brian, you don’t need to hedge. We are in a recession. What an opportunity.
Brian, Bo, please discuss your thoughts on Bank Of America offering mortgage loans to minority communities for Zero Money down and No minimum credit score. Sounds fishy my friends. Would love to view your thoughts!
They ain’t touching that with a 10 foot pole
Haven't heard of that, but sounds unlawful to offer different products based on ethnicity.
Check it out sometime. Blew my mind when I first heard about it. I feel like there’s going to be some sort of hidden fee somewhere. We shall see how the pilot goes.
@@jillpatton3432 epitome of racism.
Sure seems like Bo should be in the intro too
The complexity to this discussion is that sunk-cost isn't always a "fallacy." If your time is more valuable being spent elsewhere rather than watching a shitty movie, by all means, leave. If you don't particularly like the burger you're eating, it's still providing you some form of nourishment (at least in theory). Granted, if continuing to eat something you don't like risks making you sick, cut your losses.
If your Tick Tock dancing video were a financial decision, you both would be bankrupt.
I am sooooo glad that Bo is excited about this show !!!! 🙂 ROTFL
but this is a good show. -- unconscious perceptions / behavior requires de-programming w/ self-perception.
My first two marriages
Could not agree more. I am pounding every dime I can get my hands on into the market. I'm wearing Wal-Mart t-shirts, eating tuna sandwiches, and driving a 27-year-old vehicle so that I can get as much as possible stuffed into the market while it sucks. As soon as the market soured I immediately pulled out all the stops to limit spending in favor of investments. I'm averaging about 60% of my net each month being put in.
I also agree with another commenter - don't get divorced if you can avoid it. It's catastrophically ruinous.
If it's not 'deferred gratification' does that make it preferred gratification?
Coining the term now xD
I'm laughing out loud about your comments on your own tiktok haha
Is that how the retrograde loop for Mars works? Is Mars retrograding now (and supposed to be getting brighter in the pre-dawn sky)
a very dumb and i suspect common financial move that i have seen in a couple of relatives is carrying credit card balances at a high interest rate( mid teens) and keeping money enough to pay off those balances in the bank with it's paltry interest and persisting in this pattern for a long time. they say it makes them more comfortable to have a lot more money to dig into "in case". in the meantime, the size of the carried balance also doesn't aprreciably get less.
Rent a tire and finance those 24s rims.
I love to buy low. Keep this bear market coming!
Loss aversion--- got to say half my life i feel 2 steps behind where i should of / or could of been . Than i move and the incorrect response happens sometimes.
20:29 when you talk about the bull having 155% return, this means you end up with about 2.5x more than what you started with, correct? Thanks in advance for the response!!
Indeed, it turns every 1$ into $2.55
i wish you didn't talk through the demo.
I was dumb enough to pay off my student loans.
Pain
The concept of loss aversion and the magnified pain caused by financial loss is fascinating to me.
I’ve got to think every hedge fund understands this concept and knows that if their algorithms can push a stock down by X percent then Y percent of people will panic sell.
I would love to see the database they have inevitably developed.
I'm actively searching for a new job and am not investing new dollars outside of an employer match right now (to beef up my cash in case I either choose to quit prematurely or get fired for quiet quitting), but I always follow the below rules no matter where I am in my investing journey:
1. Only invest money I can afford to lose in the short term (even if I expect long term growth from the investment)
2. Don't be cute
Although it's ideal to dollar cost average all 12 months of every year, I'm not trying to be cute with my decision to invest less right now. I'm not trying to be cute timing the market. If anything, I'm fearful that I'm not dollar cost averaging right now.
All dollars that have been invested already is staying invested. It's ideal to buy when the market is low, but at a minimum at least I'm not selling.
Herd mentality: no one actually stands up for the national anthem while at home, but they’ll do it at the sports stadium so they don’t look like jerks.
Meh. I've been burned by the herd mentality, so I don't follow what others do. Usually 😁🤣
.... I'm with you .... uhh ohhh ooops 🙂
“I am so excited because we have a LOT to talk about”
Hey Guys, great video! just got a bit of a nitpick about the sunk cost on food.
I mean it makes sense for a movie since the purpose of watching a movie is entertainment and you are not getting entertained, however for food it is different.
As long as the food is not making you sick, eating it will give you sustenance that will make you not have to purchase another meal for hours.
I understand some people eat for the experience or eating good food brings them joy, but as a FINANCIAL mutant, unless youre past the building phase, that is NOT a sunk cost fallacy.
Making a decision to do a show about the Student Loan Forgiveness Program.
Getting people to change? Good luck with that.
Better to learn how to make money using how most people think.
Believe it or not, I cannot understand what you're saying when you're talking over a video. Shocking. I know.
He's actually wrong about sunk costs. In the case of the movie or food, you can usually get a refund if you ask :)
You can also get (nutritional) value out of food you don’t like. It makes perfect sense to keep eating a meal you didn’t particularly like in place of buying an entirely different one.
@@Krashoan Sometimes that's how you get salmonella though...
@@amireallythatgrumpy6508 Last time i checked you don't get salmonella from "food you don’t like", albeit there is the off chance that in a particular situation you might not like the food because your body is warning you of danger.
@@Krashoan Your recomendation was effectively to completely ignore your sense of taste...
@@amireallythatgrumpy6508 I did not recommend any such thing. Try reading again. "Eating food you don't like" is not "completely ignoring your sense of taste," and as I pointed out, is not reasonably related to salmonella. Last time I checked your taste accounts for factors other than things that are dangerous to you. The original story also didn't give indication that the food was bad because of dangerous contaminant, but rather that it was just a poor quality piece of meat.
A great example are the fact that there are industries literally designed around LATE FEES, because they know how humans typically operate.
you guys talking over the video was annoying as hell lol