Why Americans Are Actually BROKE! (2022 Edition)
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- เผยแพร่เมื่อ 29 มิ.ย. 2024
- Why Americans Are Actually BROKE! (2022 Edition)
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To me the big thing a lot of people can do is throttle back on the cars. I remember walking through the parking lot of my workplace and saying "how do all these people afford these fantastic vehicles when they work at the same place I do and I know they don't make much more than me?" Well, most of them are still working and I retired at 55. Buy a reasonable car and if it is running fine, it gets you from point a to point b, and your maintenance and repairs are not getting out of hand, then keep it. Every day you drive that thing is another day that the money you would spend on something flashier or more up to date is instead working for you invested in something that is appreciating not depreciating. I think that thought will make you happier than driving a luxury car or a full size pickup (with an empty bed and only you in it) to work everyday.
I have noticed a trend, I'm an Engineer, the new grads all seem to have shiny brand-new vehicles and trucks. Nothing cheap buy the way, Land Cruisers, F150s, Teslas, Chargers. Then you look at what all the 15 and 20 year employees drive and they are decade or decades old Toyota Corollas, Honda Civics, Ford Rangers, etc...
for real, I graduated from college in 2018 and with almost 100k in debt (even from my state school) and in 2020 I needed a new car for my 2008 Chevy Impala that reached 140k Miles and kept having one problem after another. I traded it in for a used 2018 Toyota Corolla with 20K miles for just under 15 grand, I could have got a more expensive model like for the Camry that would have been close to 22k but decided against it. Meanwhile my coworkers who either graduated the same year as me or even after, who had almost no student loan debt and had pretty decent cars and they all went and bought new SUV's for around 25-30K! I was so blown away that they were out of college debt free and decided to set themselves back for a stupid vehicle that does the same thing as much cheaper ones
@@eq2092 interesting. I am a retired Engineer myself. Maybe it is just a life lesson that most people need to learn, but a few know out of the gate. The question that I think people don't ask as much when they are young is "How happy is this going to make me and for how long?", I mean if you are really into cars, great go for it, but I think most people feel great when they first buy that new car and then the feeling wears off pretty quickly.
@@chef_moquin9535 Well, you are probably on your way to a much less stressful life than your coworkers, it's a bummer about the college debt, I am the first to admit that it wasn't nearly as burdensome in my day, the cost is ridiculous today, but you sound like the type that will be diligent and get that payed off.
I think is so true. I sold my jeep with payments two years ago and have been driving my moms old paid off Camry. Still drives great and very clean. I’d like to drive it for ten more years. Is it hard seeing my friends buy BMWs and trucks? Yes. But will those cars make me truly happy? I’d rather save up to buy a bigger house for my wife and kids.
The main thing that set me up for financial success was not accruing more that $10k in student loans. I did the sacrifice while in college. Going to school full time while working to pay for school. I skipped living on campus and stayed home rent free. My parents didn’t have the mean to help but they said as long as I’m in school they will feed me and put a roof over my head. I didn’t leave home until I was 26 after I completed my masters. Shout out to parents who understand the assignment 😂. That helped me buy my home at 29. It took me 3 years to pay off my loans. Now at 41 I’m investigating 30% of my income and other than my mortgage I have no debt. But let’s talk about these damn gas prices though 😩
Congratulations
@@jasonjstdr thanks 🙏🏾
and food prices
@@dknowles60 omg yes!
Youre doing well. Gas price isnt going to effect you because youre debt free. Good job
Didn't Charlie Munger and Warren Buffett invent the strategy of buying/investing when the market is low and also buying/investing when the market is high? As Warren Buffet said, he has seen this happen many times in his life. Not an investor. My wife and i never earned more than a middle class salary. We plan to get retired at 58 with a stock portfolio worth $4M. We have never sold so much as one share of stock..
I've been doing this same thing myself. Can't get into trouble with the IRS when I have no income and all my money is in stocks. I don't like doing the work though. Lol. So I just invest through an advisor who does the stock picking. My money grows, and I'm tax-free.
Do you mind sharing info on the adviser who assisted you? been saving for pension since age 18 -- company scheme. Along the way I hit higher tax, so I added to my company pension with a SIPP (tax benefits) I'm 46 now and would love to grow my finance more aggressively, there are a few cars I still wish to drive, a few mega holidays, etc.
@@victorlaranjahal Have you heard of Sharon Louise Count? She gets featured regularly on CNBC. I myself use tax-deferred accounts to hold my investments. That way I avoid capital gains taxes. There are other options your advisor could brief you about.
@@ericmendels Thank you. I just checked her out now and I've sent an email. I hope she gets back to me soon. I've been thinking of doing this for a long time now, and I've procrastinated enough already.
If you don’t tell your money where to go (budget), you’ll always wonder where it went!
I started contributing to a 401k at 19 years old. Now, I’m 30 years old, make about $60k a year, and have $66k in 401k. I’ve never contributed more than 6% of which my company matches 150% on 6%. So every $100 I contribute they contribute $150. According to 401k calculator, at 8% to 10% rate of return, I’d have between $3-$5 million. Crazy to think if I stayed the course I could potentially have $5,000,000. And that’s just contributing 6% of my paycheck!!
Nice work brotha, keep at it!
What if your financial institutions or the government lock your accounts? Paper money is losing value and electronic money can be taken with the push of a button.
Hot dog, that is a crazy good matching plan
Nick, bump up your percentage. I'm contributing the max ($20,500) into my 401K every year from an income similar to yours. The compound interest has been amazing. Your legally allowed to contribute more that yours companies match. Just don't go over $20.5K. ( This # does not include your match, that's not factored into the $20.5K maximum 401K contribution )
@@jessebrueshaber6915 cost of living and state taxes make it all but impossible to max out my 401k. Plus the investment options are a bit limited in my 401k. BUT, I also invest outside my 401k. I started maxing out my Roth IRA and HSA every year. Anything extra after that goes into a taxable brokerage account. 👍
"Some of the poorest people have the most expensive cars" - Bob Raspet
You can see that in bad neighborhoods: Mustang and Dodge Challenger drivers who are broke and drive recklessly, always switching lanes hysterically and cutting you off on highway, and come home to their ugly houses with marijuana smell.
Yup! Have to make that 600 car note !!!! Stupidity
What’s even funnier is them ppl blame the lower income class on there problems.
Total school loan < First-year annual salary
This is how I picked my colleges and I have never felt student debt getting out of my hand. Good to see that advice being shared by Brian.
I wish I had been given that advice when I went to college! But I'm fighting hard to fix my mistake!
Someone should tell high school kids this
I paid as I went to college.
Bo's story about his kids is hilarious, but the one thing I would caution him and others about is that those habits can shift depending on context. I was the spender growing up, I was hooked on video games and as soon as I got any kind of money, I would buy new games with it. My brother was a saver and set aside money for years to help pay for college. Ironically, he took out a bunch of debt, dropped out of college, and developed expensive tastes as an adult, while I turned out to be the big saver/investor. The thing that clicked in my mind was that money was no longer a limiting factor in playing games, but time suddenly was, so if I could buy some of my time back by securing my financial future, I could enjoy my hobbies without guilt or stress. So yeah, don't assume the kids will maintain the same habits once they're out in the adult world, because they react to adult life in different ways.
David that moment of clarity on the value of time sounds like it centered and motivated you - thanks for sharing 👍
This is a great point. Something interesting I've noticed as I meet more people, is that how people were raised and how scarce resources were when they were growing up, has a direct and often inverted effect on how they treat money as adults. Meaning, kids that grew up in middle class households where they always had the basic necessities they needed are much more likely to have a healthy relationship with money and understand the importance of saving for the future. Whereas kids that grew up very poor and never knew quite where their next meal would come from, or worse, whose house they'd sleep in that night, often are the ones that feel the need to treat themselves as young adults and spend all the money they have as soon as they get it, so they can live it up now that they have the ability to.
In other words, the emotional impact of someone's upbringing hugely affects how money-wise or money-conscious they will naturally be as adults. I've been fortunate. My upbringing certainly wasn't perfect, but it was stable. As a result, I've learned the value of money and learned to save before I spend. I really feel for those who didn't have the stability I did during their childhood. I'm realizing it often takes them a long time to break out of the party mentality they develop as young adults thanks to the emotional toll their scarce upbringing took. I just hope education can be the key to success for everyone in the end, regardless of where they were when they started out.
That's so true, the thing is you know those games you were buying.. They are probably worth a fortune now!
When I was at university in England in the 1980s and lived in Student Halls in my first year, everyone had to shared a small room with someone else - we all, males and females, slept in bunk beds like children. There was a small sink between the two of us, a small two door wardrobe we had to share and two small desks. That left about two foot square of dirty and sticky unoccupied carpet in the middle of the room. The communal showers and toilets were old and dirty and often didn't work. They were some of the happiest days of my life.
That is almost exactly my dorm experience at college in the USA. Bunkbeds, sink, dual wardrobes, two desks. We did bring in a mini-fridge. Communal bathrooms and showers. Absolute blast. Edit: Stereo system, lol...can't forget that.
That still exists. The difference is they charge 10x more for college because of unchecked overhead expenses.
@@habbadabbado5765 yup. It's crazy but today the cheaper option is to leave the dorms as soon as possible and find a cheap apartment on campus (other than living at home, or working for the dorm of course.)
Thanks for the refresher and love that 232K lots of growth! Congrats.
Regarding the Gen X student loan theory that it’s parents and grandparents taking out current loans… not necessarily. I have friends who took out student loans to go on trips and fund their lifestyles. They’ve had bankruptcies since. One even maxed out loans to fund her boyfriend’s drug problem. She refuses to even check her balance today.
Lmao I pay my credit card off like weekly I'm scared of debt
As always a great show!
I graduated from UGA in 2007 and was amazed at the 4 bedroom/2 bathroom East Campus apartments where I ended up living. Thankfully, the HOPE Scholarship covered my tuition both there and in Buenos Aires, where I studied abroad. I also did the rough first year in a normal dorm.
Creating and maintaining a family budget cannot be stressed enough. Then you can see where your money is going and what you have do for saving and investing. Perhaps a show in how to create a budget, including tracking down your spending through credit card reports, writing down cash spending. It is eye opening.
We Americans live BEYOND OUR MEANS. No matter what we earn. Stop buying new cars, stop buying new phones, new designer anything, flat screens, gaming systems, etc etc. Learn to SAVE SAVE SAVE, and don’t waste your $$$ on “ courses” everything is FREE on the internet 👍
Exactly. I've traveled around the world and even the "poor" Americans live like kings compared to the majority of the world. I see low income people have so many cars they have to park them on the grass. They have flat screen, streaming services, buy beer every week, buy steaks and sausages and bbq every weekend..I could go on and on. Very priveleged society for a very long time is finally realizing they aren't on top anymore.
I remember when I retired early a coworker insisted I must be a millionaire. I asked her if she had a new car and a giant flat screen tv on her wall. She said of course she did. So I explained that my tv came from a yard sale for $5, my car was over 10 years old, and my cell phone is also old but it works.
@@JB-ri6zp $500 doesn’t make me go broke but I’d rather spend $5and save $495 towards retirement.
Everyone wants others to think they're a big shot.
Only nation where basic math seems to allude the vast majority of the population. They want to be saved from poor decision making.
Here is a plan:
1) Stop spending money you don't have.
2) don't have debt.
3) Live below your means and save/invest.
The housing issue is/was being caused by cheap money and the banks/wall street equity firms buying up 30% of the market. When that stops the bubble will burst. Same old song and dance.
I would agree that on two of the three things that you said there is a such thing as good and bad debts. And in fact you can make a lot of money by having debt. For example I have taken out a $120,000 loan for a rundown real estate property. My current interest is 1.5 percent for 15 years. Now we all know inflation erodes the value of money. But in the case of having a loan it erodes the value of the loan. By having an interest rate that's lower than the rate of inflation the inflation is actually eating away at my mortgage. It's not my money it's money that I have borrowed and I'm repaying it with dollars that are worth less. The house will at least maintain its value and even if the housing market crashes will still provide me with a place to live and a source of rental income should I choose. I also took out $34,000 for a large solar panel system that has more than replaced my electric bill. I financed that at 1.5%. Not only will inflation erode the value of the loan that I've taken out on the solar panels as energy costs rise the value of the solar panels will also increase. It all depends on the kind of debt you take out. Using a credit card to buy a Starbucks latte is not a wise thing to do. But used properly leveraging debt can actually make you a millionaire.
@@Ultimusvivi Sure, having debt on real estate can make you money over the long haul. But it comes with lots of risk, hassle and continued investments. Real estate investing also heavily depends on when the property was purchased and the old rule of where the property is located.
For 99% of the individuals investing in real estate is well beyond their means. Many cannot even afford to purchase a primary residence, let alone investment properties. For the common person the best investment (if they have any money to invest monthly) is simply buy/hold an S&P index fund over their lifetimes.
I couldn’t agree more! Delayed gratification is a skill set that will pay off. It’s the new sexy 😂
I learned that it can be LEARNED. There’s really no excuse to spend absolutely everything you get just because you can.
I have saved $33,000 in three years and I make under $50,000 a year. I don't carry balances on the three credit cards I have. If I charge something, I pay it off when the bill comes. I also have two vehicles that are paid for. But then again, I don't do anything anymore either.
A lot of people are insecure and need to impress and at the same time financially stupid.
Agree
100%
Living way outside of they means …
Truth to this.
US in a nutshell. Oddly it's the natives that seem clueless. Immigrants who often do not speak English as a first language who arrive with but the clothes on their back will within a decade own a business, own a home, not live drowning in debt, educate their children while the native born ones are moaning about huge personal debt,live and buy beyond their means, and expect to be saved from their own poor decision making of which they refuse to alter. The definition of insanity.
Thanks for bringing this to the surface. great video guys, keep it up. thanks again
I have watched some of your videos and I really liked them. thanks for the share. SUBBED and LIKED ! a fellow creator
Money guys are the only advisors I trust. They give you all the data you need to be successful. You have to do the work but at least they give you a framework to work for. Credits cards are 10% useful and 90% poison. Be super careful people.
Debatably, that 90% risk is actually yourself and not the credit card.
To me, these guys are open and honest. They have no ads and their motivation is genuine help. They plan to have people come to them as they get more complex in their wealth and the model seems to work... these guys are legit... would love to have an hour long session with them.
Great video, thank you for sharing.
I always finance for the longest term I can. But I have paid off my last 2 cars in less than 3 years. I like the low payments in case something happens, but I always pay off early.
'Hansel and Gretel'. This applies in the UK. When I was an undegrad over 30 years ago, accommodation was basic. I lived in Halls. I had friends who lived out. My room basic; their house looked worse than the one in 'The Young Ones'. My son is 18 and looking at university accommodation now - it's about twice the price (inflation adjusted) than it was but much nicer. For what? A nice room which you'll pay for over 30 years...
Right! My son is 12, I’m a single parent a pay full tuition for a prep school. Last week I added up the amount of money I’ve paid for private education thus far astonishing…so I was thinking 1st year of college he can live on campus. Sophomore year I will buy a condo or house nearby and he can live there with roommates. It’s too expensive!!!!
You could just tell him to pay his own bills. The GI bill will pay for college or working your way through college works too.
Personal observation: My whole career I’ve been around boats. I’m starting to see prices in used market go down. I’d say right now boats are back to “normal” prices vs the highly inflated price for the past 5 years.
I appreciate the quotations around normal for boat prices 😂
I have been watching too. A good number of boats aren't moving and aren't being used. I'd say, the local marina by me has about 15-20% of the boats not going in the water this year.
I'd LOVE A BOAT. But man, they are cash cows
The first step to successful investing is figuring
out your goals and risk tolerance - either on your own or with the help of a Financial Advisor. If you can get the facts about savings and investing with a well detailed plan, you should be able to gain financial security over the years and enjoy the benefits of managing your income.
I think the pandemic have really taught
people the importance of multiple streams
of income, unfortunately having a job
doesn't mean security.
Successful people don't become wealthy
overnight. What most people see as a
lance wealth, a great career and luxury is a
result of smart work.
@@steceymorgan814 It's not how much money you save in the
bank, but how much money you earn and
how hard it works for you. Money devalue
over time, investment is the best option as it
grows over time
I think the key thing here is working with a
professional. Yes people have devoted their
lives to making profits in the market, but
those of us who haven't but are interested in
investing can simply work with them.
@@casinosimsek2027 Alright, so you know anyone?
the one thing i noticed watching youtube about the USA is the amount of things they put on finance - phones, goods and i was really surprised CARs. in my western country virtually no-one has car finance
What country is that? That’s cool
@@MrMojo271 Most of the developed world. Who in their right mind needs a payment plan for a phone. No wonder they're so broke.
Nice work guys
Great info !!
Great show! What tablet is Brian using?
Great show 👏🏻
The dorms are still bare bones in NY SUNY but still very expensive. Meal plan is outrageously expensive. Books outrageously expensive. Fees are in the hundreds, if not thousands of dollars a semester.
It’s because everyone feels like they “deserve” the best regardless of the effort or success in their life.
Well stated!
I know a woman who is in her late 40's and just re-financed her house (luckily, right before rates went up), so she could kill $25K in student loan debt she'd had for 25 years. But, she still owes the money, as it's now part of her mortgage, just at a lower interest rate, if I understand how these cash out refi's work. Me, I got out of college with a bunch of student loans (twice hers in today's dollars) and some CC debt from car repairs, and I knew I needed to kill those debts fast. I worked 65 hours a week (full-time 9-5, and a part-time evening and weekend job), and I paid it all off in just under 4 years. I lived like a student, driving an old car, renting rooms in houses and answering ads for roommates wanted. It's not pretty, but it's what I suggest to people when they complain to me about student loans. I tell 'em to get another job and throw all the money at the debt. But, most people don't want to sacrifice their leisure time, so the debt drags on, possibly even growing, because they did some consolidation, interest only, razmatazz payment plan. Knuckle down and do it, work whatever it takes to clear the debt. The time goes by quickly when you're young and working, then you're debt free. Heck, I still had time to find a girlfriend and get married, so there can be a life while you're doing it. Really.
Renting a room is key. People think they deserve a nice apartment to themselves, and I don’t blame them. But I never lived alone, or had disastrous shared responsibility for a lease (except for one semester in college and learned my lesson). I rented rooms until I could buy a condo.
@@genxx2724 I got a 1 bedroom when I got married (dual income is a help), then condo, now house. But fully agree. People overlook the rent-a-room in a house option to save money.
@@joekuul8769 Save money, not have to buy furnishings, and not be liable on a lease with a roommate. When you rent a room, your options are open, and you may feel safer and more stable, being in a single family neighborhood.
@@genxx2724 Excellent points.
@@Tania-rg7jp Troll alert!
My problem is I value fishing. They say give a man a fish you feed him for a day and if you teach a man to fish they'll spend all their money on boats, trailers, rods, electronics etc. Now each trip is costing me $200 with gas and bait. Add in extra gas towing and repairs and it's getting to be an unaffordable hobby.
The brogan vs hogan example was mind blowing
House prices are INSANE right now. I'm seeing people buying TINY spaces for astronomical prices at an enormous interest rate. This isn't looking good. When (not even a question of if) things collapse, it will be major, particularly for people buying in at these prices.
Totally agree! Tried to sway some friends and family but they HAD to buy the house 🫣 buying such an expensive asset that’s massively overvalued will be devastating when prices drop. Like stocks, the average American buys at the top and sells at the bottom, but the only way people who bought these homes will make it through is to hold it and live there for another decade to break even (not to mention inflation years later).
-assuming they can even afford the mortgage
The problem with student loan debt is bloated college overhead. Colleges have never been held to account for the product (ie. degree, some of which are not marketable) and success of the graduates. Federal funding of colleges should hold them to a standard.
Blank checks lead to high prices, what a concept huh
@8:57 that was the best Freudian-slip ever. lol
Could you guys talk a little more about college students and how they should start prepping for the real world? I’m having trouble knowing where to put all of my money since I can’t access 401k etc. I’m also still a dependent so idk if that changed anything either. I already save and try to max out my Roth ira every year but I feel like I should be doing more.
Another outstanding show, guys. Love your sage advice
My type of vid 😎😎👌🏽
They have shown that the marshmallow test broke down along socioeconomic lines. Kids with food insecurity were faster to eat the marshmallow. Please also be aware that conditions like ADHD have a powerful, hormonal effect on decision-making. I have struggled with impulse control after periods of hyper focus and extreme debt paydown for over a decade, and I just got diagnosed and realized WHY I struggled so much. Understanding how to handle my disorder has HUGE implications, and medication can also be life-changing for some. It’s not always just “practice and try harder,” although volition and a desire to learn is vital!
Thank you
39:20 amazing they are all millionaires too- compound interest is amazing 🤩
In my culture the term fake it till you make it is the norm it's ingrained.
Great content in general Money People. One point though, interest on credit cards isn’t compounding as long as you pay the minimum each month. Compounding would require interest being created on interest.
Even if payments are missed, or underpaid, I believe compounding interest is illegal. (A few years ago when I wrote a business loan management system it was for business loans at least.) Instead, you get big late fees and an increased interest rate.
That's not how credit cards work. Here's an example:
Let's say you have $10,000 of credit card debt. Your minimum payment is $300 a month and your interest rate is 18% APR (so 1.5% per month). You pay your $300, leaving your remaining balance at $9700. Then your 1.5% monthly interest is added, which comes out to $9700*0.015=$145, bringing your balance back up to $9845.
Next month you pay $300 again, so your remaining balance is $9545, $9400 of your original debt plus $145 from last month's interest. You're then charged this month's 1.5% interest on the full balance of $9545. That 1.5% on the $145 is compound interest.
@@TangoFoxtrotWhiskey Compounding interest is most definitely not illegal in the US. It applies to pretty much all credit cards, mortgages, car loans, etc.
I’m so happy I dodged that student loan debt .. smh ..
What's even sadder about student loan debt is people majoring in useless degrees then they can't get a job.
No degree is useless. A liberal arts degree from a good university, still proves you are responsible, teaches you to read / write / communicate effectively. It will generally take a few years to catch up to someone with a STEM degree, but it’s not impossible.
What's worse is when someone doesn't complete their degree and has student loans for nothing!
Those degrees are worthless except for $40k a year teaching jobs. A 6 month welding certificate will earn $75k at the start with earnings potential of $250,000/year with most employers willing to pay the $2,000 tuition. But you’ll have to break a sweat ever day. Enjoy
@@thilehoffer you don’t need a college degree to learn how to read, write and communicate effectively bud
@@Yugiboii have you been to America? Dumb af people if they can support racism sexism and bigotry
Is there a money guy talk on deferred compensation? I'm not finding one.
The thing that never gets talked about with this subject is how people have kids. Having them before age 25 and having them outside of marriage severely hurts your ability to build wealth. 40% of children in America are born outside of marriage. No wonder the middle class is shrinking.
yup kids will keep you poor
Get married first and you'll be fine
@@d_all_in As long as you stay married.
It's actually easy: It's because everything is overpriced there. Here, in Romania, you pay for University $1000/year and in the US it's $25.000/year. The cost of medical bills in the US is something to laugh about. Tens of thousands to hundreds of thousands of dollars if you have an accident or something. Homes are expensive as hell too (about 375k on average). And the average American earns about 70k/year. That's why.
Literally everything you listed is wrong or inaccurate
@@d_all_in People who just say it's wrong for the sake of it are not important.
Talk to any divorce attorney privy to people's finances and ONE THING becomes abundantly clear is just HOW MUCH DEBT people are carrying is crazy.
I honestly don't believe that over 50% of Americans can't pay 1k in emergency. Like there's no way right
Ask your friends and family members and you’ll see that it’s true .
Im surprised too. Like WTF
Depends which survey you believe. I notice the news article doesn’t say how many people in the surveys or methodology. Then again, how many times did you lie on an anonymous survey or when someone asks you straight, do you have 1k spare cash
I think what it means is they don't have $1k sitting around in a savings/checking that isn't already allocated towards this/next months expenses. It doesn't include things like 401k assets or available credit cards/loans.
It’s closer to 70% as of now, June ‘22.
Hi! I've been a fan of the show for a couple of years now, love the show! and I have been trying to keep up with your advises, but I have a big question, Im 26 years old, Mexican, and I've tripled my income in the past 3 years, and using the formula that you gave me it makes me have a really huge savings that I should be in but it's just too big to accomplish, how should I address it?
Just remember every number is a target. Say 20-25% saving rate. This does not need to be a switch. It can be gradual where you consistently just increase your savings 1-2% every year. They suggest anytime you get a raise, just go ahead and put that towards investing. This is a good way to increase savings without making drastic life changes. Same with emergency fund. You aren't going to magically have 3-6 months. The idea is to slowly build up your cash reserves to 3-6 months. The 3 or 6 is dependent on how quickly you think you can reasonably find a new job.
@@matthewcanterbury1015 thank you! I've been doing the 25% rule, and that's why I felt so short of the target goal, but you do have a point and I should just focus on getting it to that percentage, thanks for the motivation🙏🙏
the fact that you are Mexican does not matter
Students can only get 5500 a semester for Freshman and Sophomore year and 6500 for Junior and Senior years. If tuition is more than that which most even State schools are so parents try to bridge the gap and their loans are 6.5%. Reducing the cost of college and interest rates would be a win/win.
At 6:09 you guys say housing has went up 73.5% because of interest rates. Is there a link to the article that breaks down the numbers?
I don't think interest rates are the only reason, supply shortages have also increased the cost of new construction which pushes up the price for existing homes.
The basic math on interest rates is: for a 30 year loan, a 1% increase in interest rate costs you an extra 15% of the base value of the loan over its lifetime. The average interest rate has gone from about 3.5% at the lowest point during the pandemic to 6% now, which equates to about a 37% extra cost for the same loan value. How much the actual price of houses has gone up depends on where you live, but in my area it's around 50% in the last 2 years.
I need a short video covering the last 10 mins of this video for my kids. They’re early 20s. Does a shorter video exist? Can u recommend a basic finance book for 20 something’s?!
Quit Like a Millionaire by Kristy Shen should be required reading, even for high school grads (she has an actual equation to determine one’s college major). She’s a supporter of FIRE but the way she breaks down investing and consumption habits and how to view money as a young adult in a way to make it serve you is the most helpful and detailed account that I have seen out of maybe 100+ personal finance books that I have read since I graduated college in 2007 up till now.
Those investment numbers... I always wondered, do they account for inflation?
I like good quality clothing and footwear. I only buy stuff when it's 50% off. Shoes I'll stock up on when I see them
I could not agree more that the affordability of college is a HUGE problem, needs to be addressed and has been putting our country at a disadvantage to being globally competitive for a long time! If we don't make education more accessible and start pushing the right, relevant skills earlier in education we will (really, already are) be in a world of hurt in terms of our global positioning.
Two year college. I repeat, two year college. Cheap and for real jobs that pay.
Tuition and books are ridiculously high since government started backing student loans.
I miss the brick wall set up. Any chance we can go back ? This one does not feel like home.
"Hey, your family is great with your finances. Can you help?" Sure, I would first start with a budget. We use YNAB...it was a game changer for us. "Wait, I have to pay for it? Never-mind." 😕
Google sheets is free though 😂😂
Even getting people to use a free budget app is difficult. "Wait, I have to actually think about stuff and look at numbers? That's sooooo hard."
What? Did you think I was going to make money just magically appear in front of you?
“Hey babe, pass the keys to the boat ima sail to work real quick.”
My son has ADHD. Deferred gratification is so hard for him. Watching him with his allowance is so scary. I would love to see an episode on how to teach kids about money.
Hi! I have pretty severe ADHD and I want to talk about my experience. He needs to find something that works for dealing with ADHD. For me, medication is the most helpful, but I've developed other ways of dealing with it too, such as speaking my internal monologues out loud so I can more easily focus. Other things like getting enough sleep make a big difference.
But I was actually able to really develop my ability to think about delayed gratification when I started working on things I cared about, where I would directly feel the consequences of my decisions. For me, I always wanted to develop games, and it's very easy to put in a lot of effort which makes a lot of short-term progress, but creates more work for yourself later. I don't know how this might manifest for your son, but I promise he can learn it.
I also want to tell you that your kid will thank you one day. I learned recently how worried my parents were raising me. They put in a lot of effort and they felt like I wasn't going to make it in the real world in a lot of ways. (I'm also on the spectrum so there was a social / relationship aspect to this.) But in reality, their approach was perfect, and they just needed to give me the space to figure things out myself. I know my parents got really discouraged while raising me due to both the health conditions I mentioned, so I want to give some reassurance that itst going to work out if you keep putting in the effort. If harnessed properly, ADHD can both be a superpower and a disability, it's a matter of finding stability.
The first bill every month is the one that I have to pay to myself! It is non-negotiable and always comes off the top. That ensures I never spend it on anything else. It is gone and invisible to me.
That's how I think when I transfer money to my savings account! I don't touch that money, so I'm mindful of my spending to make sure I never need to pull from it to pay for the bills.
What if it zero percent interest?
Little did they know that the definition of recession would be changed once the second quarter GDP figures were released.
I mean before 2019 not a lot of people had an excuse but now if you're broke in 2022 I feel for ya.
We are broke because of greed .. .I can't wait until my ppl are rejuvenated in this world💪🏾💪🏾💪🏾
For a luxury car, you should have the money to buy it in cash, but if the interest rate is low enough it could well be worth putting the cash in an index fund and financing the car for as long as possible.
Don't buy a luxury car you can't afford to buy with cash, but you probably shouldn't buy it in cash.
I own an auto body repair shop. We learned a long time ago- those that drive the fancy vehicles, nice big home, campers, side by side, etc.- these people are payment poor. They don’t even have their $500 deductible- they usually put it on a credit card!
Just because someone uses a credit card doesn’t mean they don’t have cash in the bank to pay their deductible.. I put almost everything on my credit card then pay it off each months. Between sign up bonuses and cash back, I get at least $1,000 back each year.
@@Irishluck97 We charge 3% if they put it on a credit card. So, no- they don’t have it or are just ignorant to the charge. Yep- we have to pay 3%, so we pass that onto our customers.
I saw this in a recent post in a financial independence group. Someone making $300k a year and living paycheck to paycheck. Wasting money on fancy boats and cars. They figure they can sell their 2M house to retire now. No idea how. It's obviously they live over their means. Some people are really bad with money.
Delayed gratification has been my most important decision ever!
Hey MONEY GUY TEAM, y'all never talk about the Highly Compensated Employee limits and how to get around them. Is that something you can bring up on a future topic???
I think that's more of a concern for employers than employees, and is probably a service they would offer to paying clients.
@@elmateo77 yeah but is there a way, if so then I’ll pay. Not the other way around!
GenX will carry a ton of Student Loan debt because our interest rates were low and there’s no reason to pay them off any faster than expected.
I make close to $300k and still have $3500 because my interest rate is around 2.5%. Same with my mortgage. So zero reason to give them an Earning Asset for cheap money. You’ll get your money when you get it. Not a minute sooner
Tbh, I know I could have waited to pay off my student debt but it freaked me out to know that if I tripped up in life that debt will never go away unless I die. Plus for my income the monthly payment I had coming out was way more than I could afford if I lost my job and got a lower paying job. So I think it really depends on how much you have to pay
You just might get lucky if UNCLE SAM forgives all student loans soon
@@DBEdwards I'm not holding my breath.
Well… I feel broke in today’s stock market but age 30 and buying the dip weekly
On housing, things seem hopeless.
I’m 24 and want to retire early. I just bought my first house, max out my Roth IRA, and contribute to my employer match plan. How does wanting to retire early shake up the financial order? I don’t want to max out my employer plan that I can’t touch until I’m 60 when I could be using that money on other assets (real estate/taxable accounts) that could secure income for an early retirement. I don’t want to “skip steps” but waiting until I’m 59 1/2 to retire sounds awful
If you get the actual FOO course, they warn about not getting too heavy into your tax advantaged retirement plans if you plan to retire early. Typically this falls later into the baby steps and doesnt start until you 30s to 40s.
Basically you will have to contribute into your brokerage account in addition to tax advantages accounts. Yes you can take some money out of your IRA, but not all. If you want to retire early you need access to your funds, which means brokerage. You can still use your tax advantaged accounts though because eventually you will be old enough to draw on them.
You’re young enough to find something to do that pays the bills that you don’t want to retire from.
@@serjiang I hate comments like this. You literally did not address the question 😒
Retire early to do what? The banks or the government can take your savings at anytime for any reason. Learn something that is useful and gives satisfaction.
I learned not to use credit cards a long time ago, which I why I have money. I also didn't go to college.
Carrying a credit card balance is a bit of a lie for some people.
I pay off my credit card bill in full every month but it looks like I am carrying a balance because I pay my bill 21 days after I get it, so on the day I pay my credit card bill in full I have seven weeks of charges on the card. so I get lots of ads offering me to transfer my $4k a month credit card balance. even though my bill is paid in full and I never pay interest.
When the interest on your student loan is less than the interest on your mortgage, attack the mortgage and let the student loans ride out until the end of the term.
Guys, we all know that you need to live within a budget that focuses on saving and to stay within your means. The trick is to learn how to delay gratification and how to make it where it doesn't seem like a detriment to living a fun, satisfying life. Your whole "we'll advise you on how to live your life" industry can be wrapped up in one piece of advice....Always save 10% of what you make and put it away where it can't be reached.
Should I take out student loans and 27 and keep investing? Or stop and focus on paying cash?
Pay cash
Id be curious to know what interest rate the top 10 % of people are actually paying on that carried credit card balance. I technically carry a balance but I pay 0% on the balance and have the cash to pay it off immediately if required.
I utilize 0% introductory rates on large purchases to keep emergency fund cash on hand. Having liquid cash on hand feels better to me than having a 0 balance on a credit card where Im paying 0% interest.
Im not saying that is the best method, but its something to consider
Above and beyond my emergency reserves, I'm trying to save up with cash for a car and an HVAC replacement.
I currently use my legs as my main mode of transportation but know that if I am in a position where I can no longer work remotely, I will need a car.
My HVAC system works fine but is past its life expectancy.
When the time comes for me to purchase either of these things (which I anticipate happening in 0-5 years), I _might_ choose to finance depending on the financing available and their associated rates, terms, and conditions.
But I want the financing for these things to be on _my_ terms to be efficient financially and _not_ because I am forced to take whatever financing is available because I don't have the cash.
So yes, I completely understand where you are in your decision making. You have the cash to pay the debt in full if needed but are taking advantage of the 0% financing available and the security of having that extra liquid cash on hand.
I was thinking the exact same thing too. And I’m like you; I carry a little bit of debt on a 0% interest credit card promo.
So while I’m (technically) adding to their statistics, I wish there was a way to break it out because I could pay off that balance immediately with cash from any one of my savings/ investment accounts that I hold.
People in the US love to tie up their money in crap that loses money. I'm one of them too, but I'm trying to change my my ways!
Food is my 2nd biggest expense, probably $1k a month and I almost never eat out. I could switch to soup I guess.
Ramen Noodles come in many tasty flavors & are quite inexpensive.
Same man, gotta get on the rice and beans diet lol.
I spend about $1100/month. Family of 4 and small town grocery is a little pricey
Raise chickens for eggs and meat and goats for milk cheese and meat. Low investment low upkeep and healthier. $1000 a month for good is too much that’s $250/week
Might wanna start trying rice 😂😂
As a literal “Logan”, I appreciated the example breakdown. However, my personal financial journey has been more in line with “Hogan”, haha! Still, making the best of it!
I haven’t listened to the video yet but the answer why most are broke is lack of two things…Financial Education and Self-Discipline.
Nope many have an income problem not a financial education an self discipline issue. If they make too little how can they avoid being broke?
@@donaldlyons17 Get roommate(s). Live with family. Take a second job. Learn new skills- formally or on the job-that can make you eligible for a better-paying job. Do everything you can to lower costs; yes, it can be painful, but better than increasing debt. While we don't have total control of the success of investments or income (or situations such as illnesses that result in medical debt), there are many parts of it we CAN control but often don't.
@@dking1362 suggestions while not wrong are just that!!! If you need others cooperation that could easily turn out bad first. Second learning is extremely difficult for so many just look at efforts to join or create unions. I say why not just learn a new skill or switch jobs why join or firm a union? Having to do all that means one has a serious issue.
I carry a balance but the balance was from before I had a good income and was financially aware, now that I have "made it" I am slowly reducing my debt burden. I am not proud of the balance but I cannot pay it off all at once, or I would. Good insights though!
Amazing listen! I start investing later than I would like to but I’m doing pretty well now. Really like the show
We’re still paying off my husband’s grad school debt for the JD/MB he earned 20 years ago 😕 Meanwhile, we have a daughter in college. Because of our middle-class income, we qualify for very little financial aid. Our daughter chose a state school with generous merit aid over a top 30 school that would have cost 30K/year more. Even this lower tuition is tough for us to pay. Our younger kids will need to take out loans. We live very frugally (drive old paid off cars, buy used furniture, rarely take family vacations, etc.) and yet it’s tough to stay afloat.
Let her pay for her own college. I paid for mine and I’m doing fine. She can always borrow for college and work two jobs to pay it off but you can’t borrow for your retirement.
Let her pay for her own school, save for your retirement so one day you won’t have to live in your child’s basement!
@@anonymousbosch586 Sometimes I wonder why we live so frugally to save money. My grandparents worked and saved their whole lives. In the end, my grandmother ended up in a nursing home that cost her almost $12,000/month cash, while her roommate's bills were covered 100% by Medicaid. Her roommate had never saved for retirement and had enjoyed life. My grandmother, who had a sharp mind to the end, knew how much money she was paying and it pained her. However, she became totally blind in her final years of life and bedbound the last year. She needed full-time care. She would have still received care if she had spent her money, but she might have enjoyed life more along the way. I'm naturally a frugal person, but seeing what my grandmother went through was eye opening and really made me question things.
@@razojacqueline My husband and I paid for our own college too, but we came from low-income families and we were both awarded generous need-based aid. It was my husband's grad school debts that were onerous. I never pursued grad school because I absolutely hate being in debt, and starting off life in our mid-20's with about $200,000 in student loan debt was overwhelming. It's almost impossible for a student to pay 100% for college on their own these days.
I agree with others. Have your daughter pay for her education. She can borrow to pay the difference; you can’t borrow for your retirement. Also, it could cause incredible resentment with your other children if you pay for her education and not theirs.
8.5%. That does NOT INCLUDE gas, transportation, and food!!
i feel broke because stocks are down lol
8:00 minutes of the video: With student loan debt what I want to see if the percentage of people that work in the chosen degree. I will guarantee it's going to be really low. The "theory" is that people with a university degree makes 30% + more money than people without a degree therefore, everyone should get a degree to make more money. Everyone in the US can have a university degree and the ratio of income will still be the same.
It probably is very low, but it’s also not a good indicator of anything. For example I have a neuroscience degree, and I don’t work in neuroscience, but I do work in tech. A lot of people see my science degree and say “hey she can probably handle tech right? She knows how to learn“. I know it’s a common rhetorical point to point out that a lot of people are not r/technically using their degree, but I don’t think it’s a particularly useful one. I think student loan debt to income ratio and then projection of income increase over career is much more interesting and useful