Recessions are part of the economic cycle, all you can do is make sure you're prepared and plan accordingly. I graduated into a recession (2009). My 1st job after college was aerial acrobat on cruise ships. Today I'm a VP at a global company, own 3 rental properties, invest in stocks and biz, built my own business, and have my net worth increase by $500k in the last 4 years.
Let's face it... buying more stocks & index funds during stock market corrections and bear markets is scary. Which makes it really hard to do for most people like me. I have 260k I want to transfer into an s&p but its hard to bite the bullet and do it.
You need a Financial Advisor my friend so you don't get ripped off in the market. They provide personalized advice to individuals based on their risk appetite, placing them among the best of the best. There are bad ones, but some with good track records can be very good.
I know I've wanted to start investing for a few months, but just haven't had the courage to start because the market has been down for most of this year. Please how can I reckon with such skills and what are his services like?
This would be super helpful. I watch Philip Defranco's news videos, and having each video split up into chapters makes it so much easier if you're going back to show someone the video and you want to find a specific part really fast.
"We must all suffer from one of two pains: The pain of discipline or the pain of regret. The difference is discipline weighs ounces while regret weighs tons." - Jim Rohn
Social media is not an issue. I am on SM all the time and I don't spend needlessly. It is like saying credit card is the problem but the culprit is the dumb spenders that spent money they cant afford
I deleted IG off my phone and installed it on my iPad which is always off and not always charged. That way I can still find inspiration for my hobbies, find out some cool local events, connect with people I need to contact, but not wasting time doomscrolling on mindless garbage.
1. Having kids 2. New cars (especially trucks/SUV's) 3. Eating out Eliminating those three things from your life can make you wealthy beyond your wildest imagination! I'm a Millennial DINK and my wife and I have so much $$$ saved for retirement and we paid our house off last year! It's the easy life from here on out boys!!!
@johnsonspark171 I would add both arrests and vices/addiction to your list. And expand having kids to 'having kids at the wrong time' and 'marrying the wrong person.'
Take head that you have to pay a fee just to sit in the office outside of the doctor's office and just outside of the emergency room hundreds of dollars. Just to sit there it's called a facilities fee...not covered by health insurance
To be fair, the bigger reason for that is that medical bills in the USA are absolutely ridiculous. Our healthcare system needs a LOT of changes. Even those in good health can fall victim to this.
@@mialovestravel The US healthcare system is overwhelmed with treating unnecessary and avoidable health issues. The availability, quality and timeliness of care would greatly improve if people simply started taking better care of themselves.
you are getting this totally wrong. Medical bills are a problem in US not for poor health but for absurd pricing and insurance payments with poor coverages, with most good insurances tied to good jobs. You get laid off and you get a health scare like emergency room or a surgery or cancer and now you are looking at $20K to $30K medical bills easily. I got an emergency gallbladder surgery due to infection spreading 3 months ago that came out of nowhere. Got billed for $50K but I only paid $6K deductible and coinsurance due to having a good insurance. If I did not have a job with a good insurance like that, I would also be bankrupt now. I could also do the same surgery back in my home country in Asia for less than $500 only.
Seen people drive a Tesla Plaid with car payments $3900 a month, rent $1600, on a $7000 net monthly income and then complain about inflation. Also seen where people buy a $900K Townhome at a mortgage payment of $5000 a month and then complain that $160K is not a good enuf pay.
My neighbor is a renter like me. We both pay $1900 a month. Not bad considering how expensive things are. We just bought a 2023 Tesla model Y, a 2023 Corvette, a 2022 Dodge Ram and a 2022 Porsche Panamera. The guy has double his rent in car payments over his rent. He could be investing and be retired in 10-15 years but instead would rather look flashy and remain poor.
it's impossible for someone to become wealthy suddenly. A valuable lesson I've picked up from billionaires is to always invest in a diverse range of securities and to put in background effort, even if we usually just see the final product. I intend to profit from the approximately $200k that I want to put in stocks this year.
Having an investment advisor is the best way to go about the stock market right now. I was going solo, but it wasn't working. I’ve been in touch with an advisor for a while now, and just last year, I made over 80% capital growth minus dividends.
I am definitely not perfect in my financial life, however there is one thing I am so proud of myself for. I am slightly under 15% for my mortgage. 25% would be double my mortgage payment. And that is something that I will always be grateful and blessed by. And believe me I had to accept I wouldn’t get anything with all the bells and whistles and a nice “show home” like you see all over social media, but it’s mine and I am not house poor.
I would put "not earning enough" in the top 5. It's not popular to bring up but the reality is that you're going to struggle if you're below the median income in your area. The baseline cost of living settles at the level that below-median earners can afford by spending all of their income, which leaves very little room for saving and investing. My top 5: 1) Buying too much house, which is basically expert level lifestyle creep 2) Divorce (being single in general doesn't help) 3) Regular use of credit for lifestyle spending (car payments, credit cards, HELOCs, cash out refi's, etc) 4) Not taking care of your health, which will gut you in the long run 5) Not earning enough income
A big key to our wealth-building success - the only debt we have ever carried was a 20% down on our home and our monthly payment including taxes and insurance was never higher than 15% of our income, ultimately less than 10%. And we did not move every 3-7 years like so many folks do. Selling and buying a home can easily eat 8-10% of your equity every time you repeat it. (Caveat: I did have student debt prior to getting married, but I paid it off within two years after school.) This enabled us to max out retirement savings by the time we turned 30.
Great episode, I love how enthusiastic they are about rather mundane things, but it is those mundane things that will get you financial independence. I have done fine, retired at 55, but I regret not being aggressive enough when I was in my 20's. In hindsight, it should have all gone in an S&P index back then. Did some things right, waited on buying a house, and bought modest cars that I drove forever, home mortgage was really the only debt I took on and that was on a modest house. Over the years I have listened to many friends and coworkers lament about their financial situations and I am thinking to myself "yeah, but look at that house your living in and that car your driving, was it necessary to take on all that extra debt for those things? Did they really make you that much happier?".
I've been watching you guys for years, and I can safely say this is one of the most concise episodes you have with some of the most beneficial wealth building information. For those of you who are new to channel, do yourself a favor and take heed of this information, and then start applying it. You will thank yourself later for it.
If most of the money someone has in retirement comes from the compounding, could we see a graphic or Case study showing what percentage of the money came from the year the money was invested? For example, if every dollar invested at 20 years turns to $88, then those dollars represent a higher portion of the portfolio than the dollars invested at year 60. I think this would help illustrate why starting earlier is so important. Showing that the majority of someone's retirement comes from compounding can be unintuitive so putting it in terms of "dollars invested" by year/decade can light a fire for young people. Thanks for all the great content over the years!
Sooo many are spending money on eating out, multiple times a week or every day. Even paying premium for delivery. I've never seen a wealth killer as bad as what people spend on food, to be honest. Even worse than money spent on a car, which is also "stupid money" - Inflation isn't an excuse here. No matter what. It's cheaper to go to the supermarket and cook yourself. It's a myth it's more expensive than eating out.
It's insane what people spend eating out and on delivery. Sure, if you're in a high enough paying job working long enough hours, then eating out or outsourcing your food costs makes sense. But, too many will claim that they have no time to make food and/or it's more economical to eat out are simply too lazy or bad at math.
My wife is a chef. We both love to cook. We go out to eat once a month for date night. I agree though even once is expensive. Paying for delivery is insane. Especially if you are in debt.
Basically every episode of financial audit with Caleb hammer is people spending an outrageous amount on food. It comes down to laziness and/or can’t handle having a basic sandwich for lunch or dinner
My kid is 20. A software engineer student. Rarely ever spends. We talked about lay offs, AI, job market and most importantly FI/RE. We live in a tech hub. Average pay is about 200-350k. I told the kid, if you’re smart with money, save and invest you can retire early, and do your amazing hobby as a side job which can be very lucrative, she agreed and said that actually sounds like a great idea. Talk with your kids! Set them up for success. They don’t have to retire at 65!
Gas is a bad example for inflation... It is influenced by supply(cuts/increase), war, demand, all that. Inflation has all to do with money supply anyway....
Agreed, I've noticed a lot of people/places do it (not an attack or defense of the money guys, just an observation). I remember paying less than $1 per gallon for a week or so during covid... I also remember paying $3.75 spring of 2014 (or something like that. I remember it was the most I had ever seen gas, and was concerned it was going to keep going up). Gas is too volatile to use, unless actions are taken to smooth the peaks and valleys.
@@iceblade6330and does anyone remember the war that was going on in 2014, Crimea and Russia and Syria issues and still Afghanistan. Those drove up gas prices
@@Kipketer911 Yeah exactly -- I remember that stuff now, but no, I don't have that in my memories of it impacting gas prices (at the time I was definitely more focused on how I was going to pay my bills, including gas to get to work :) )
The Corvette commercial for this gen will be accurate in like 15 years lol. Younger people do buy them but the cars are usually 15-20 years old by the time they can
I think a big one is student debt. We need to drill down the ramifications of carrying such debt to our kids. There are other paths in life other than a 20k-80k a year university.
I find it weird that I spent 7 years as an undergrad and borrowed every single semester, except the semester I graduated. When I graduated I only owed $46,500 in principal and accumulated interest. 2011-2018. Changed majors many times, but i always worked part time and made efforts to reduce the amount i needed to borrow. I only had a few scholarships amount to around $6000 over the 7 years. I graduated with an electrical engineering degree in 2018. In 2022 I paid off all student loans. I started in the liberal arts and sciences, and wanted nothing to do with engineering freshman year.
That’s why my kids have decided not to have any kids. They don’t have the energy and capital to raise new kids. They are worried about their own survival and bringing new kids in this expensive world feels like crime.
I was all in on becoming wealthy until 13:45 in the video. At which point I paused the video, went and watched the 2024 Corvette e-ray commercial and realized I'd rather be broke driving that car. Man was that commercial convincing!
Car payments are the number one thing IMO. Everyone brushes it off as normal, and a fact of life that you're always going to have a payment. Everyone claims they need something reliable, but i am here to tell you that alot of new stuff is absolute junk. I have owned new, as well as used, and if you keep a used car on a proper maintenance schdule it is FAR cheaper to own and drive. I am a car enthusiast through and through, but the pricing these days is just out of bounds. Don't saddle yourself with car debt! The best thing you can do is buy a lightly used toyota or honda for a commuter and keep it until 250,000 miles or more.
Can someone explain to me why the money guys (who are financially savvy) are using GROSS INCOME to calculate housing and auto payments?! The bills are paid with NET INCOME (after tax money) not gross
i worked in the mortgage industry from 2007-2010 and now in credit card collections and the stories will scare you to death on how they ended up in that situation
Procrastinating in your career is also a wealth killer, I am struggling with that which is not allowing me to push myself for higher paying positions that my peers at the same level have
Is it possible to make your cut up videos on a separate channel? Like I feel like I watched the longform version and then my feed is overwhelmed by all these short videos. It’s also hard to find the longer videos because I have to sort through Short cuts before I find the long one
On the last point about Fear, kinda surprised you didn't expand it into where Fear and Greed have a monster child - Fear of Missing Out (FOMO). People can sometimes try to make up for "lost time" by taking a huge gamble on something speculative and end up losing way more than they would have if they just stuck to a conservative plan.
More and more people might face a tough time in retirement. Low-paying jobs, inflation, and high rents make it hard to save. Now, middle-class Americans find it tough to own a home too, leaving them without a place to retire.
The increasing prices have impacted my plan to retire at 62, work part-time, and save for the future. I'm concerned about whether those who navigated the 2008 financial crisis had an easier time than I am currently experiencing. The combination of stock market volatility and a decrease in income is causing anxiety about whether I'll have sufficient funds for retirement.
This is precisely why I like having a portfolio coach guide my day-to-day market decisions: with their extensive knowledge of going long and short at the same time, using risk for its asymmetrical upside and laying it off as a hedge against the inevitable downward turns, their skillset makes it nearly impossible for them to underperform. I've been utilizing a portfolio coach for more than two years, and I've made over $800,000.
There are a handful of experts in the field. I've experimented with a few over the past years, but I've stuck with ‘’Colleen Rose Mccaffery” for about five years now, and her performance has been consistently impressive. She’s quite known in her field, look-her up.
I work, go home, provide myself with a little bit of entertainment to relax before bed and do it again the next day. I have become far better off financially by cutting off expensive hobbies by doing the bare minimum. Continue this for my last 20 working years and once I'm a millionaire, then I can start doing whatever I want.
I am very similar but I also consider myself easily entertained/don't get bored easily. I think this really saves me a bunch of money over a long period of time.
So I have a question... have you done videos on people with pension plans. I'm a firefighter and a big fan of what yall put out. But there's not alot of info on people who have a pension. So wanted to see your thought... i would be willing to email more info if needed. thanks.
Best thing for me is to actually compare myself to people in worse situations, like just being a healthy person with family and friends to support me is a lot more then some people have
Something funny that I have been seeing is some restaurants lowering their prices recently. Not back to pre pandemic levels, but enough to notice. I think a lot of restaurants jumped the shark and raised prices too much too fast and their customers stopped coming. McDonald's is even now claiming in their investor calls that they raised prices too much, which I find hilarious.
As someone that rarely eats at restaurants I also find the greed hilarious. Instead of just raising prices as absolutely necessary when their costs went up, they just arbitrarily raised prices to make record profits and blamed it on supply chain issues and inflation. I won't be sad to see many of these places go out of business.
Does principal payment portion of the mortgage count as saving or debt servicing? I keep the Intetest, taxes, and insurance part of the total mortgage payment under 25% of my income, but if you include principal, its like 35%. My principal payments account for like 45% of the total mortgage payment. I look at principal payment as forced saving that ill get back when I 1031 or sell it. What am i missing?
Great highlight on the crucial role of financial guardrails in navigating wealth killers like inflation and housing affordability! 🛡 Staying disciplined with spending and investing consistently despite economic fluctuations is key to long-term financial resilience and growth.
Solution: 1) Work from home and most things delivered. 2) Live at home with parents for free. 3) Debt? 4) Happily single 5) Still under parents health plan and no transportation liability.
These are all good if they're options to you but many people don't have these options. Most parents want their kids out in their 20s and work from home jobs tend to pay significantly less and be significantly harder to get on average. I make $23/hr now but when I worked from home I made just a mere $7.50/hr. Granted, I was working from home in 2020 and now I earn my larger pay rate in 2024 so part of that difference is inflation, but it certainly isn't all of it.
1. Doordash/dining out for every meal. 2. Jordans 3. Video game systems/games/memory/live time 4. Cars 5. Salon nails/color/massage/tanning/make up. 6. Paying for lawncare, housecleaning, car cleaning 7. Amazon/things you don't need 8. Not appealing taxes and shopping insurance.
Those things aren't wealth killers as long as you do things in MODERATION WITHIN YOUR BUDGET. When it comes to services, sometimes you need to buy time to manage stress levels and be able to perform better at work, have time to complete other things that are higher priority, and seek new opportunities. This whole thing of "save any way possible and suffer" is just weird and toxic. Have a budget, avoid high interest debt, and invest in yourself by getting relevant education that can supplement your work experience. It's easier said than done but let's get away from saying to deprive yourself to build wealth. BTW, video games have an extremely good ROI compared to a vacation to Europe or concert. Nothing wrong with either but calling video games a wealth killer makes you look absurd. Do things that you enjoy within reason and logic.
I agree with everything except for buying services that improve your life. I'd rather work extra doing what I do best (and makes me money), and hire someone else to clean my house or mow my lawn so I can enjoy free time. One Saturday of working PRN at another hospital was much more valuable in time and money than cleaning my own house or mowing my own lawn. I very much agree with everything else on your list.
As far as avoiding comparison goes, nobody lays it out better than the late Thomas Stanley in "Stop Acting Rich," the last book in the Millionaire Next Door series. For those trying to keep up with the Joneses, Stanley admonished, "Get Out Of Jonesville." I have always meant to have a T-shirt made up with that message.
Procrastination: number one income killer? Not periodically changing companies. I worked for the same company for 25 years. While it provided some stability and I fully funded a comfortable retirement for us, the contemporary corporate world has zero loyalty either direction - EE to company or visa versa. The fact is, jumping companies, particularly when employee-initiated, typically bumps your salary.
I'd never recommend anyone buy a luxury car unless they can pay cash. You don't borrow money for luxuries. Just my opinion. That's like borrowing money for a vacation.
Interesting that you used food and energy prices in your inflation example, when those are usually excluded from the core inflation rate due to their high volatility.
The Gas one is super annoying. America makes enough oil to supply all of our needs 100%. We just export it. Also, if we got rid of oil subsidies, the last calculation I saw was that oil prices would drop by $.50 per gallon. We shouldn’t have to subsidize oil companies when they make billions of dollars every year.
I wish their was a class for young adults to attend that can be added to school curriculum. Now that I have a budget and doing everything for retirement. I can say that I am not a rudderless boat in this ocean of finances I feel like I’m heading to that island of retirement. Thanks again
As someone who graduated college in 2021, it sure seems like it was the absolute worst timing. Couldn’t afford to buy a home before graduation, and definitely can’t afford to buy one now. Won’t bother trying to compare myself to anyone unless I want crippling depression. Costs have gone to the moon in nearly every aspect of life. How can any in this generation expect to live ‘the American dream’ unless they’re looking at run down shacks for homes?
Key point to remember: inflation only apply to what you spend (e.g food and utility), while pay increase applies to 100% of your income. I'm a first gen Asian American. You want to know why I'm ahead these few years despite inflation? This is how. When you save 30% of your income, then the max inflation can impact is only on the 70% you spend. Then when much of the 70% spending is/can be locked in/refinanced later, such as mortgage interest rate), the effective inflation even less than 70% of actual inflation. In fact, the effective inflation over last 3 years is LESS than the average 4%/yr pay increase company paid. This is how high saving's rate dampens inflations, and benefit saver/investors. Unfortunately, while this is a common trait among high-savings/debt-allergic Asian Americans, most Americans are doing the exact opposite, spending more, borrowing more, increasing the leverage of interest rate on debt instead of dampening it by high savings rate.
I'm going to push back on their advice to have a 3 year car loan. Yes you should budget to pay the car off in three years or less BUT if you sign a 3 year loan it can and most often times does have a pre-payment penalty. If you sign a loan for 60 months or more it CANNOT have a pre-payment penalty by law. It is better to sign the longer loan (which often times has a lower APR) and just double up on your payments.
@MoneyGuy, is it ok to carry a mortgage into retirement if you have a federal pension and make more in retirement than when working. This considers a healthy TSP on top of the pension.
My crystal ball gave me visions of Brian flooring a Corvette while blasting Nirvana and I am very happy about this. BTW, I'm in my early 40s and am already saying I didn't start early enough. Makes me consider cranking up the savings rate even beyond 25% if I can help it - but that isn't always easy. Anyhow, what did Bo mean when he said "total debt payments below 36% of gross"? How is that total debt defined/broken down? Is it all out-bound payments including housing, utilities, and credit cards?
At 2:32 I think thats a little disangenuous. When the quarantine hit, nobody was driving. Previous to it gas was above $3 a gallon around me and went down to below $2, then jumped to almost $4 and is now mid $3.5. If your going to grab a year. Grab 2019.
Did you all not hear the part where they explained why they started from 2020? It’s just a continuation from the last time they did a comparison. You can look at the previous episode if you want a different reference point.
I’ll be getting a 2.5% raise in July, I’m only contributing 1% to my 401k, and working to pay off 43k in debt. With this raise should I up my contributions (employer matches up to 3.5%) or pay off debt (should be debt free by 2027)? I’m 31 in May.
The scarry thing about buying a house right now is that averages to revert to the mean. So if houses typically appreciate 4-5% on the long term average, and we have been well above 4-5% the last few years, then it means that we may see "less than stellar" returns on housing the next few years (not that 4% is great to begin with). Buying now, and then seeing your home value sit relatively flat the next few years would hurt a lot if you were already stretched to get into a house in the first place.
If you plan on living in your home 10+ year then why does the appreciation value even matter? I don’t care what my home is worth and never think about it. I’m living here until death do us part or I hit the lottery. FYI I don’t play the lottery.
Maybe I’m wrong, but the way I think of a “case study” is when you look at a real individual case (i.e. person). In my mind, when you guys say “case study”, you’re actually talking about a hypothetical, not a case study. Is it just me…?
I miss a bit of macro economics in this video. Sure, inflation is a wealth killer, but what caused inflation? One of the factors is rising housing prices, but what causes that?
Please help me to understand this approach to inflation the Federal Reserve is taking. They increased interest rates to fight inflation in a distal way as relates to consumer products, but this had a proximate effect on home mortgage rates. So are we materializing the risk to have home costs be hundreds of dollars more per month than they were by trying to mitigate the risks of a dozen eggs costing $3 instead of $1.50?
Their strategy worked, because it discouraged borrowing for large assets like homes and equipment, to cool demand. We don't have $5 eggs for that reason. Lower mortgage rates encouraged people to get way more home than they otherwise could. The problem is that developers are not building starter home stock anymore, and the existing starter home stock needs major updates right around now.
@@vulpixelful Ok, fair enough. I don't know that I am convinced that there would be $5 eggs, but even if that is the case is it not better that people have $5 eggs than a $3000 mortgage when it otherwise would have been $1500?
@@docmartin42 It's more like people should be finding homes where that $1500 mortgage is possible. The problem is that those starter homes aren't being built. If on the other hand people could continue to make up for that by buying more home with lower rates, it doesn't set them up for success--they may not be able to comfortably afford the new payment once the property taxes are reassesed. That's a contributor to the cost of living crisis. A lot of people got a rude awakening with their property tax bill increases.
In the time I have been in the US, here are the top 5 1. Social Security taxes. FICA taxes prevent most people saving in a private retirement account 2. Property Taxes. There's no good reason people should be paying $1000 per month property taxes to a local government in perpetuity 3. Infinite government spending. That causes more and higher taxes which instantly reduces your standard of living 4. Credit Cards 5. Inflation. Normally tame but under the current regime it's a massive wealth killer. Could be #1 soon.
Regime has diddly to do with inflation since its a global thing. Property taxes where I live pays for infrastructure. Do I want a separate fee for every repair and upgrade? Nope I sure don't.
@@laundrygoddess4 I think the poster is saying $1000 per month is more money than it should be for the services it provides to the residents in that area. Not that property taxes should be nothing.
You don't have to watch influencers on social media trying to get you to buy stuff. You can watch money guys, and there are all sorts of frugal, frugal retired living, minimalist mom, cheap RV living from Bob Wells, living big in a tiny house, never too small apartment living, and all kinds of channels about how to live cheaply, retire cheaply, how to live as an expat in pretty much every country, how to learn new languages for free tutorials, less is more, etc. My TH-cam feed is filled with that stuff. TH-cam is great. I also like to put on a cleaning video when I have to clean lol. Search for these videos and watch them and your life will improve. Totally stay away from the architectural digest channel lol.
I wouldn’t compare gas, milk, eggs. After all, how much individuals really spent on those? I remember gas was $3 even in 2013ish. It fluctuates. Most people got in debt is generally for large purchases or labor cost increases. I can’t really afford professional to do my shower for example, I can’t pay $13000 for a shower redo. Or plumber/electricians, real estate, etc.
"Have financial guardrails in place"? Guys, the whole point is that people are having financial guardrails imposed upon them. Maybe it's time to create a "plan B FOO" that better reflects what so many people are facing. People would appreciate it.
Recessions are part of the economic cycle, all you can do is make sure you're prepared and plan accordingly. I graduated into a recession (2009). My 1st job after college was aerial acrobat on cruise ships. Today I'm a VP at a global company, own 3 rental properties, invest in stocks and biz, built my own business, and have my net worth increase by $500k in the last 4 years.
Let's face it... buying more stocks & index funds during stock market corrections and bear markets is scary. Which makes it really hard to do for most people like me. I have 260k I want to transfer into an s&p but its hard to bite the bullet and do it.
You need a Financial Advisor my friend so you don't get ripped off in the market. They provide personalized advice to individuals based on their risk appetite, placing them among the best of the best. There are bad ones, but some with good track records can be very good.
I know I've wanted to start investing for a few months, but just haven't had the courage to start because the market has been down for most of this year. Please how can I reckon with such skills and what are his services like?
Rebecca Nassar Dunne is the licensed advisor I use. Just search the name. You’d find necessary details to work with to set up an appointment.
I looked up her name online and found her page. I emailed and made an appointment to talk with her. Thanks for the tip.
Please add chapters to your videos.
They split them up into shorter videos, but still would help.
This would be super helpful. I watch Philip Defranco's news videos, and having each video split up into chapters makes it so much easier if you're going back to show someone the video and you want to find a specific part really fast.
1000%
YES!
@@thebraveguy9808or if you are disinterested in a story skipping right to the start of the next one 😅
"We must all suffer from one of two pains: The pain of discipline or the pain of regret.
The difference is discipline weighs ounces while regret weighs tons." - Jim Rohn
What about the pain of regret in discovering you were in the WRONG discipline?
Getting off social media is key. It's such a waste of time and awful for people. The people I know on social media the most are great consumers!
Good point! I think TH-cam still counts, but Instagram, FB, and TikTok are constantly bombarding people with endless marketing.
TH-cam is still social media
Yes im guilty of wasting too much time on social media, especially TH-cam. Great point.
Social media is not an issue. I am on SM all the time and I don't spend needlessly. It is like saying credit card is the problem but the culprit is the dumb spenders that spent money they cant afford
I deleted IG off my phone and installed it on my iPad which is always off and not always charged. That way I can still find inspiration for my hobbies, find out some cool local events, connect with people I need to contact, but not wasting time doomscrolling on mindless garbage.
Yes!! I’ve had roommates for 3 years …after the hit to my pride, I’m SO grateful for the freedom it’s given me
0:45 Inflation
9:36 Comparison
17:15 Procrastination
24:46 Debt
31:54 Fear
1. Having kids
2. New cars (especially trucks/SUV's)
3. Eating out
Eliminating those three things from your life can make you wealthy beyond your wildest imagination! I'm a Millennial DINK and my wife and I have so much $$$ saved for retirement and we paid our house off last year! It's the easy life from here on out boys!!!
@johnsonspark171 I would add both arrests and vices/addiction to your list. And expand having kids to 'having kids at the wrong time' and 'marrying the wrong person.'
1. Poor health (particularly in the US). There is a reason why medical bills are the number one cause of bankruptcy in the USA.
Take head that you have to pay a fee just to sit in the office outside of the doctor's office and just outside of the emergency room hundreds of dollars. Just to sit there it's called a facilities fee...not covered by health insurance
Edut: heed
To be fair, the bigger reason for that is that medical bills in the USA are absolutely ridiculous. Our healthcare system needs a LOT of changes. Even those in good health can fall victim to this.
@@mialovestravel The US healthcare system is overwhelmed with treating unnecessary and avoidable health issues.
The availability, quality and timeliness of care would greatly improve if people simply started taking better care of themselves.
you are getting this totally wrong. Medical bills are a problem in US not for poor health but for absurd pricing and insurance payments with poor coverages, with most good insurances tied to good jobs. You get laid off and you get a health scare like emergency room or a surgery or cancer and now you are looking at $20K to $30K medical bills easily. I got an emergency gallbladder surgery due to infection spreading 3 months ago that came out of nowhere. Got billed for $50K but I only paid $6K deductible and coinsurance due to having a good insurance. If I did not have a job with a good insurance like that, I would also be bankrupt now. I could also do the same surgery back in my home country in Asia for less than $500 only.
Seen people drive a Tesla Plaid with car payments $3900 a month, rent $1600, on a $7000 net monthly income and then complain about inflation.
Also seen where people buy a $900K Townhome at a mortgage payment of $5000 a month and then complain that $160K is not a good enuf pay.
My neighbor is a renter like me. We both pay $1900 a month. Not bad considering how expensive things are. We just bought a 2023 Tesla model Y, a 2023 Corvette, a 2022 Dodge Ram and a 2022 Porsche Panamera. The guy has double his rent in car payments over his rent. He could be investing and be retired in 10-15 years but instead would rather look flashy and remain poor.
They are entitled and stupid
it's impossible for someone to become wealthy suddenly. A valuable lesson I've picked up from billionaires is to always invest in a diverse range of securities and to put in background effort, even if we usually just see the final product. I intend to profit from the approximately $200k that I want to put in stocks this year.
It may be a good idea to speak with a financial advisor who can help you develop a portfolio based on your individual goals and risk tolerance.
Having an investment advisor is the best way to go about the stock market right now. I was going solo, but it wasn't working. I’ve been in touch with an advisor for a while now, and just last year, I made over 80% capital growth minus dividends.
I've been considering but haven't been proactive. Can you recommend your advisor? Could really use some assistance.
I looked up her name online and found her page. I emailed and made an appointment to talk with her. Thanks for the tip
I am definitely not perfect in my financial life, however there is one thing I am so proud of myself for. I am slightly under 15% for my mortgage. 25% would be double my mortgage payment. And that is something that I will always be grateful and blessed by. And believe me I had to accept I wouldn’t get anything with all the bells and whistles and a nice “show home” like you see all over social media, but it’s mine and I am not house poor.
I would put "not earning enough" in the top 5. It's not popular to bring up but the reality is that you're going to struggle if you're below the median income in your area. The baseline cost of living settles at the level that below-median earners can afford by spending all of their income, which leaves very little room for saving and investing.
My top 5:
1) Buying too much house, which is basically expert level lifestyle creep
2) Divorce (being single in general doesn't help)
3) Regular use of credit for lifestyle spending (car payments, credit cards, HELOCs, cash out refi's, etc)
4) Not taking care of your health, which will gut you in the long run
5) Not earning enough income
A big key to our wealth-building success - the only debt we have ever carried was a 20% down on our home and our monthly payment including taxes and insurance was never higher than 15% of our income, ultimately less than 10%.
And we did not move every 3-7 years like so many folks do. Selling and buying a home can easily eat 8-10% of your equity every time you repeat it.
(Caveat: I did have student debt prior to getting married, but I paid it off within two years after school.)
This enabled us to max out retirement savings by the time we turned 30.
Great episode, I love how enthusiastic they are about rather mundane things, but it is those mundane things that will get you financial independence. I have done fine, retired at 55, but I regret not being aggressive enough when I was in my 20's. In hindsight, it should have all gone in an S&P index back then. Did some things right, waited on buying a house, and bought modest cars that I drove forever, home mortgage was really the only debt I took on and that was on a modest house. Over the years I have listened to many friends and coworkers lament about their financial situations and I am thinking to myself "yeah, but look at that house your living in and that car your driving, was it necessary to take on all that extra debt for those things? Did they really make you that much happier?".
I've been watching you guys for years, and I can safely say this is one of the most concise episodes you have with some of the most beneficial wealth building information.
For those of you who are new to channel, do yourself a favor and take heed of this information, and then start applying it. You will thank yourself later for it.
If most of the money someone has in retirement comes from the compounding, could we see a graphic or Case study showing what percentage of the money came from the year the money was invested? For example, if every dollar invested at 20 years turns to $88, then those dollars represent a higher portion of the portfolio than the dollars invested at year 60. I think this would help illustrate why starting earlier is so important.
Showing that the majority of someone's retirement comes from compounding can be unintuitive so putting it in terms of "dollars invested" by year/decade can light a fire for young people.
Thanks for all the great content over the years!
Sooo many are spending money on eating out, multiple times a week or every day. Even paying premium for delivery. I've never seen a wealth killer as bad as what people spend on food, to be honest. Even worse than money spent on a car, which is also "stupid money" - Inflation isn't an excuse here. No matter what. It's cheaper to go to the supermarket and cook yourself. It's a myth it's more expensive than eating out.
Agree completely, the food delivery trend is just outrageous and doesn't seem sustainable.
It's insane what people spend eating out and on delivery. Sure, if you're in a high enough paying job working long enough hours, then eating out or outsourcing your food costs makes sense. But, too many will claim that they have no time to make food and/or it's more economical to eat out are simply too lazy or bad at math.
My wife is a chef. We both love to cook. We go out to eat once a month for date night. I agree though even once is expensive. Paying for delivery is insane. Especially if you are in debt.
Basically every episode of financial audit with Caleb hammer is people spending an outrageous amount on food. It comes down to laziness and/or can’t handle having a basic sandwich for lunch or dinner
And the people that waste all their money on nonsense are the same people say the system is rigged against them 😂😂
My kid is 20. A software engineer student. Rarely ever spends. We talked about lay offs, AI, job market and most importantly FI/RE. We live in a tech hub. Average pay is about 200-350k. I told the kid, if you’re smart with money, save and invest you can retire early, and do your amazing hobby as a side job which can be very lucrative, she agreed and said that actually sounds like a great idea. Talk with your kids! Set them up for success. They don’t have to retire at 65!
40 minute top 5 list
100% agree! #1. Cars are the worst!!! & Credit Card debt
I'll save you some time:
1) Corn
2) DraftKings (Parlays specifically)
3) Not having unlimited Data
4) Auburn Fans
5)
As an Auburn fan this made me crack up.
@@makjmk2408 ❤️
😂
War Eagle
wdym unlimited data
Gas is a bad example for inflation... It is influenced by supply(cuts/increase), war, demand, all that. Inflation has all to do with money supply anyway....
Thank you. I remember 15 years ago gas hit $4/gal. During COVID it was ~$1/gal.
It's been way higher than it is now.
Agreed, I've noticed a lot of people/places do it (not an attack or defense of the money guys, just an observation). I remember paying less than $1 per gallon for a week or so during covid... I also remember paying $3.75 spring of 2014 (or something like that. I remember it was the most I had ever seen gas, and was concerned it was going to keep going up). Gas is too volatile to use, unless actions are taken to smooth the peaks and valleys.
@@iceblade6330and does anyone remember the war that was going on in 2014, Crimea and Russia and Syria issues and still Afghanistan. Those drove up gas prices
@@Kipketer911 Yeah exactly -- I remember that stuff now, but no, I don't have that in my memories of it impacting gas prices (at the time I was definitely more focused on how I was going to pay my bills, including gas to get to work :) )
You guys seem so genuine in your advice
I've basically seen them talk about the same thing countless times lol but I want to keep my mindset locked in.
The Corvette commercial for this gen will be accurate in like 15 years lol.
Younger people do buy them but the cars are usually 15-20 years old by the time they can
I think a big one is student debt. We need to drill down the ramifications of carrying such debt to our kids. There are other paths in life other than a 20k-80k a year university.
I find it weird that I spent 7 years as an undergrad and borrowed every single semester, except the semester I graduated. When I graduated I only owed $46,500 in principal and accumulated interest. 2011-2018. Changed majors many times, but i always worked part time and made efforts to reduce the amount i needed to borrow. I only had a few scholarships amount to around $6000 over the 7 years. I graduated with an electrical engineering degree in 2018. In 2022 I paid off all student loans. I started in the liberal arts and sciences, and wanted nothing to do with engineering freshman year.
US university costs are insane. I grew up in Puerto Rico where I got my 4 year degree from a US accredited private university for $8k.
That’s why my kids have decided not to have any kids. They don’t have the energy and capital to raise new kids. They are worried about their own survival and bringing new kids in this expensive world feels like crime.
I was all in on becoming wealthy until 13:45 in the video. At which point I paused the video, went and watched the 2024 Corvette e-ray commercial and realized I'd rather be broke driving that car. Man was that commercial convincing!
1. Cars
2. Houses
3. High interest debt
4. Divorce
5. Underinsured
Ty
Shit, I have the first 2
You just gave me 40 minutes! Thanks!
@wh8597 These aren't the 5 from the video. They're likely his opinions/thoughts
These are not from the video
Car payments are the number one thing IMO. Everyone brushes it off as normal, and a fact of life that you're always going to have a payment. Everyone claims they need something reliable, but i am here to tell you that alot of new stuff is absolute junk. I have owned new, as well as used, and if you keep a used car on a proper maintenance schdule it is FAR cheaper to own and drive. I am a car enthusiast through and through, but the pricing these days is just out of bounds. Don't saddle yourself with car debt! The best thing you can do is buy a lightly used toyota or honda for a commuter and keep it until 250,000 miles or more.
It’s fairly erroneous to use 2020 as the basis for things like gas. The pandemic crashed gas prices in a lot of places.
2019 was only 2.69. inflation is still there.
Can someone explain to me why the money guys (who are financially savvy) are using GROSS INCOME to calculate housing and auto payments?!
The bills are paid with NET INCOME (after tax money) not gross
i worked in the mortgage industry from 2007-2010 and now in credit card collections and the stories will scare you to death on how they ended up in that situation
There was no social media in the 90s but people still compared to others and lived beyond their means.
Procrastinating in your career is also a wealth killer, I am struggling with that which is not allowing me to push myself for higher paying positions that my peers at the same level have
Cars. All the liabilities associated with your house and people not comparing the "appreciation" to inflation.
I have a friend who mocks everyone else for being addicted to social media on social media.
The duality of man
Appreciate all the knowledge you drop.
Is it possible to make your cut up videos on a separate channel? Like I feel like I watched the longform version and then my feed is overwhelmed by all these short videos.
It’s also hard to find the longer videos because I have to sort through Short cuts before I find the long one
“Rich people acquire assets. The poor and middle class acquire liabilities that they think are assets.” - Robert Kiyosaki
What are examples of liabilities that “they think are assets”?
@@sophialharper probably most material things like new cars, furniture, appliances, etc.that doesn't generate income.
Robert “just borrow someone else’s money” kiyosaki
That's how its done, Almost every rich person I know did that at one stage or another.
Rich people can afford assets and liabilities, poor people can only afford liabilities and consumables.
On the last point about Fear, kinda surprised you didn't expand it into where Fear and Greed have a monster child - Fear of Missing Out (FOMO). People can sometimes try to make up for "lost time" by taking a huge gamble on something speculative and end up losing way more than they would have if they just stuck to a conservative plan.
More and more people might face a tough time in retirement. Low-paying jobs, inflation, and high rents make it hard to save. Now, middle-class Americans find it tough to own a home too, leaving them without a place to retire.
The increasing prices have impacted my plan to retire at 62, work part-time, and save for the future. I'm concerned about whether those who navigated the 2008 financial crisis had an easier time than I am currently experiencing. The combination of stock market volatility and a decrease in income is causing anxiety about whether I'll have sufficient funds for retirement.
This is precisely why I like having a portfolio coach guide my day-to-day market decisions: with their extensive knowledge of going long and short at the same time, using risk for its asymmetrical upside and laying it off as a hedge against the inevitable downward turns, their skillset makes it nearly impossible for them to underperform. I've been utilizing a portfolio coach for more than two years, and I've made over $800,000.
There are a handful of experts in the field. I've experimented with a few over the past years, but I've stuck with ‘’Colleen Rose Mccaffery” for about five years now, and her performance has been consistently impressive. She’s quite known in her field, look-her up.
Thanks a lot for this suggestion. I needed this myself, I looked her up, and I have sent her an email. I hope she gets back to me soon.
I work, go home, provide myself with a little bit of entertainment to relax before bed and do it again the next day. I have become far better off financially by cutting off expensive hobbies by doing the bare minimum.
Continue this for my last 20 working years and once I'm a millionaire, then I can start doing whatever I want.
I am very similar but I also consider myself easily entertained/don't get bored easily. I think this really saves me a bunch of money over a long period of time.
So I have a question... have you done videos on people with pension plans. I'm a firefighter and a big fan of what yall put out. But there's not alot of info on people who have a pension. So wanted to see your thought... i would be willing to email more info if needed. thanks.
Best thing for me is to actually compare myself to people in worse situations, like just being a healthy person with family and friends to support me is a lot more then some people have
Really liking the student loan rule. Covering the very necessary societal servants that are still good jobs.
Something funny that I have been seeing is some restaurants lowering their prices recently. Not back to pre pandemic levels, but enough to notice. I think a lot of restaurants jumped the shark and raised prices too much too fast and their customers stopped coming. McDonald's is even now claiming in their investor calls that they raised prices too much, which I find hilarious.
As someone that rarely eats at restaurants I also find the greed hilarious. Instead of just raising prices as absolutely necessary when their costs went up, they just arbitrarily raised prices to make record profits and blamed it on supply chain issues and inflation. I won't be sad to see many of these places go out of business.
You should have done for the 4 people Fannie, Mae, Freddie, Mac
Does principal payment portion of the mortgage count as saving or debt servicing? I keep the Intetest, taxes, and insurance part of the total mortgage payment under 25% of my income, but if you include principal, its like 35%. My principal payments account for like 45% of the total mortgage payment. I look at principal payment as forced saving that ill get back when I 1031 or sell it. What am i missing?
Is there any episode that Bo is not excited about?
None that make it to production!
Nope. He's a human version of a golden retriever
Great highlight on the crucial role of financial guardrails in navigating wealth killers like inflation and housing affordability! 🛡 Staying disciplined with spending and investing consistently despite economic fluctuations is key to long-term financial resilience and growth.
Solution:
1) Work from home and most things delivered.
2) Live at home with parents for free.
3) Debt?
4) Happily single
5) Still under parents health plan and no transportation liability.
Ah yes, the depressed basement dwelling hermit life.
These are all good if they're options to you but many people don't have these options. Most parents want their kids out in their 20s and work from home jobs tend to pay significantly less and be significantly harder to get on average. I make $23/hr now but when I worked from home I made just a mere $7.50/hr. Granted, I was working from home in 2020 and now I earn my larger pay rate in 2024 so part of that difference is inflation, but it certainly isn't all of it.
Love you guys - keep up the great work.
1. Doordash/dining out for every meal.
2. Jordans
3. Video game systems/games/memory/live time
4. Cars
5. Salon nails/color/massage/tanning/make up.
6. Paying for lawncare, housecleaning, car cleaning
7. Amazon/things you don't need
8. Not appealing taxes and shopping insurance.
Those things aren't wealth killers as long as you do things in MODERATION WITHIN YOUR BUDGET.
When it comes to services, sometimes you need to buy time to manage stress levels and be able to perform better at work, have time to complete other things that are higher priority, and seek new opportunities.
This whole thing of "save any way possible and suffer" is just weird and toxic. Have a budget, avoid high interest debt, and invest in yourself by getting relevant education that can supplement your work experience. It's easier said than done but let's get away from saying to deprive yourself to build wealth.
BTW, video games have an extremely good ROI compared to a vacation to Europe or concert. Nothing wrong with either but calling video games a wealth killer makes you look absurd. Do things that you enjoy within reason and logic.
Don't you talk about my video games like that. Those be fighting words. 😂
@@ScottUlmer PLEASE! WILL SOMEBODY THINK OF THE CHILDREN?
I agree with everything except for buying services that improve your life. I'd rather work extra doing what I do best (and makes me money), and hire someone else to clean my house or mow my lawn so I can enjoy free time. One Saturday of working PRN at another hospital was much more valuable in time and money than cleaning my own house or mowing my own lawn. I very much agree with everything else on your list.
As far as avoiding comparison goes, nobody lays it out better than the late Thomas Stanley in "Stop Acting Rich," the last book in the Millionaire Next Door series. For those trying to keep up with the Joneses, Stanley admonished, "Get Out Of Jonesville." I have always meant to have a T-shirt made up with that message.
Procrastination: number one income killer? Not periodically changing companies. I worked for the same company for 25 years. While it provided some stability and I fully funded a comfortable retirement for us, the contemporary corporate world has zero loyalty either direction - EE to company or visa versa. The fact is, jumping companies, particularly when employee-initiated, typically bumps your salary.
I'd never recommend anyone buy a luxury car unless they can pay cash. You don't borrow money for luxuries. Just my opinion. That's like borrowing money for a vacation.
Interesting that you used food and energy prices in your inflation example, when those are usually excluded from the core inflation rate due to their high volatility.
However those are like...20% of peoples budgets.
Add findom/ financial domination to that list
The Gas one is super annoying. America makes enough oil to supply all of our needs 100%. We just export it.
Also, if we got rid of oil subsidies, the last calculation I saw was that oil prices would drop by $.50 per gallon.
We shouldn’t have to subsidize oil companies when they make billions of dollars every year.
I wish their was a class for young adults to attend that can be added to school curriculum. Now that I have a budget and doing everything for retirement. I can say that I am not a rudderless boat in this ocean of finances I feel like I’m heading to that island of retirement. Thanks again
“Disheveled billionaires”. I was not ready to hear that on a Friday.
As someone who graduated college in 2021, it sure seems like it was the absolute worst timing. Couldn’t afford to buy a home before graduation, and definitely can’t afford to buy one now. Won’t bother trying to compare myself to anyone unless I want crippling depression. Costs have gone to the moon in nearly every aspect of life. How can any in this generation expect to live ‘the American dream’ unless they’re looking at run down shacks for homes?
Right there with you on that one.😂😢
You just graduated. The audacity of you to think you deserve to buy a home immediately afterwards is laughable
Key point to remember: inflation only apply to what you spend (e.g food and utility), while pay increase applies to 100% of your income. I'm a first gen Asian American. You want to know why I'm ahead these few years despite inflation? This is how. When you save 30% of your income, then the max inflation can impact is only on the 70% you spend. Then when much of the 70% spending is/can be locked in/refinanced later, such as mortgage interest rate), the effective inflation even less than 70% of actual inflation. In fact, the effective inflation over last 3 years is LESS than the average 4%/yr pay increase company paid. This is how high saving's rate dampens inflations, and benefit saver/investors. Unfortunately, while this is a common trait among high-savings/debt-allergic Asian Americans, most Americans are doing the exact opposite, spending more, borrowing more, increasing the leverage of interest rate on debt instead of dampening it by high savings rate.
I'm going to push back on their advice to have a 3 year car loan. Yes you should budget to pay the car off in three years or less BUT if you sign a 3 year loan it can and most often times does have a pre-payment penalty. If you sign a loan for 60 months or more it CANNOT have a pre-payment penalty by law. It is better to sign the longer loan (which often times has a lower APR) and just double up on your payments.
Good show.
@MoneyGuy, is it ok to carry a mortgage into retirement if you have a federal pension and make more in retirement than when working. This considers a healthy TSP on top of the pension.
Yes
I need these types of people for my investments to go up though. Becky needs her Lululemon.
1. Inflation
2. Comparison
3. Procrastination
4. Debt
5. Fear
Fear leads to indecision in sometimes that leads to a more expensive repair or a loss of interest income.
My crystal ball gave me visions of Brian flooring a Corvette while blasting Nirvana and I am very happy about this. BTW, I'm in my early 40s and am already saying I didn't start early enough. Makes me consider cranking up the savings rate even beyond 25% if I can help it - but that isn't always easy. Anyhow, what did Bo mean when he said "total debt payments below 36% of gross"? How is that total debt defined/broken down? Is it all out-bound payments including housing, utilities, and credit cards?
this video is amazing
22:44 the dad voice peaking through
What’s the best credit card have?
They're disconnected with the employment market
Fantastic episode. Love the 6 year example at the end to show my teenagers who just funded their Roths.
At 2:32 I think thats a little disangenuous. When the quarantine hit, nobody was driving. Previous to it gas was above $3 a gallon around me and went down to below $2, then jumped to almost $4 and is now mid $3.5.
If your going to grab a year. Grab 2019.
1. Kids 2. Kids 3. Kids 4. Kids 5. TH-cam Premium
The top 5 things that will make your mid to late life meaningful:
1. Kids
2. Kids
3. Kids
4. Kids
5. TH-cam premium, fuck ads
@@luck3yp0rk93Just click skip ads and don't pay the premium.
Meaningful life:
1. Kids
2. Kids
3. kids
4. Grandkids
5. Grandkids
6. TH-cam
7. Future great grandkids.
So true, I’ve NEVER met anyone who didn’t have kids and is past 50 and is happy.
Did you all not hear the part where they explained why they started from 2020? It’s just a continuation from the last time they did a comparison. You can look at the previous episode if you want a different reference point.
The three wealth killers are not spending less than you make, not investing the difference and mucking
That gas one really isn’t fair since the demand for gas dropped so significantly during the pandemic that it should be an outlier
Yous are top dogs! I love your channel!
I’ll be getting a 2.5% raise in July, I’m only contributing 1% to my 401k, and working to pay off 43k in debt. With this raise should I up my contributions (employer matches up to 3.5%) or pay off debt (should be debt free by 2027)? I’m 31 in May.
Always take the match. Even if you have to withdraw it, afters taxes and penalty you'd be getting at least 50% return on your money
HEEEEy brrrriaaaan. I aaaaammmm soooo exxxxxcccittteedd for this. ..
The scarry thing about buying a house right now is that averages to revert to the mean. So if houses typically appreciate 4-5% on the long term average, and we have been well above 4-5% the last few years, then it means that we may see "less than stellar" returns on housing the next few years (not that 4% is great to begin with). Buying now, and then seeing your home value sit relatively flat the next few years would hurt a lot if you were already stretched to get into a house in the first place.
If you plan on living in your home 10+ year then why does the appreciation value even matter? I don’t care what my home is worth and never think about it. I’m living here until death do us part or I hit the lottery. FYI I don’t play the lottery.
Maybe I’m wrong, but the way I think of a “case study” is when you look at a real individual case (i.e. person). In my mind, when you guys say “case study”, you’re actually talking about a hypothetical, not a case study. Is it just me…?
Gas is 5.60 in California. Almost reaching 6 to 7 dollars in Los Angeles.
The C8 costs less than the big trucks on dealer lots now.
Any chance we could get a discord group? I really dislike Facebook
I don’t understand how someone’s house payment could exceed 25% let alone 40% plus. Insane
I miss a bit of macro economics in this video. Sure, inflation is a wealth killer, but what caused inflation? One of the factors is rising housing prices, but what causes that?
Not to mention, if you wait to save, it kills your lifestyle later because all spare income has to go towards savings/investing.
Please help me to understand this approach to inflation the Federal Reserve is taking. They increased interest rates to fight inflation in a distal way as relates to consumer products, but this had a proximate effect on home mortgage rates. So are we materializing the risk to have home costs be hundreds of dollars more per month than they were by trying to mitigate the risks of a dozen eggs costing $3 instead of $1.50?
Their strategy worked, because it discouraged borrowing for large assets like homes and equipment, to cool demand. We don't have $5 eggs for that reason. Lower mortgage rates encouraged people to get way more home than they otherwise could.
The problem is that developers are not building starter home stock anymore, and the existing starter home stock needs major updates right around now.
@@vulpixelful Ok, fair enough. I don't know that I am convinced that there would be $5 eggs, but even if that is the case is it not better that people have $5 eggs than a $3000 mortgage when it otherwise would have been $1500?
@@docmartin42 It's more like people should be finding homes where that $1500 mortgage is possible. The problem is that those starter homes aren't being built. If on the other hand people could continue to make up for that by buying more home with lower rates, it doesn't set them up for success--they may not be able to comfortably afford the new payment once the property taxes are reassesed. That's a contributor to the cost of living crisis. A lot of people got a rude awakening with their property tax bill increases.
Cars, Interest, eating out, credit cards, and inflation
In the time I have been in the US, here are the top 5
1. Social Security taxes. FICA taxes prevent most people saving in a private retirement account
2. Property Taxes. There's no good reason people should be paying $1000 per month property taxes to a local government in perpetuity
3. Infinite government spending. That causes more and higher taxes which instantly reduces your standard of living
4. Credit Cards
5. Inflation. Normally tame but under the current regime it's a massive wealth killer. Could be #1 soon.
Regime has diddly to do with inflation since its a global thing. Property taxes where I live pays for infrastructure. Do I want a separate fee for every repair and upgrade? Nope I sure don't.
@@laundrygoddess4 I think the poster is saying $1000 per month is more money than it should be for the services it provides to the residents in that area. Not that property taxes should be nothing.
You don't have to watch influencers on social media trying to get you to buy stuff. You can watch money guys, and there are all sorts of frugal, frugal retired living, minimalist mom, cheap RV living from Bob Wells, living big in a tiny house, never too small apartment living, and all kinds of channels about how to live cheaply, retire cheaply, how to live as an expat in pretty much every country, how to learn new languages for free tutorials, less is more, etc. My TH-cam feed is filled with that stuff. TH-cam is great. I also like to put on a cleaning video when I have to clean lol. Search for these videos and watch them and your life will improve. Totally stay away from the architectural digest channel lol.
I wouldn’t compare gas, milk, eggs. After all, how much individuals really spent on those? I remember gas was $3 even in 2013ish. It fluctuates. Most people got in debt is generally for large purchases or labor cost increases. I can’t really afford professional to do my shower for example, I can’t pay $13000 for a shower redo. Or plumber/electricians, real estate, etc.
When the market crashes ante up even more money, buy cheap.
What if i don't put anything down on my car, take the lease, and only pay 3% of my income towards it?
Leases are for those who don't want to build wealth.
They said the P word 😣 (procrastination) That is the one killing me.
"Have financial guardrails in place"? Guys, the whole point is that people are having financial guardrails imposed upon them. Maybe it's time to create a "plan B FOO" that better reflects what so many people are facing. People would appreciate it.
Housing, rent, and cars are really the killer inflation. Nobody going broke because of eggs or milk.