Financial Advisors React to Jaw-Dropping Money Clips

[00:02] videos to chew through and they've told us they're jaw-dropping. us they're jaw-dropping. >> Brent, I am so excited for my jaw to drop. Let's dive right in. >> I put I think $1300 into a coin called

[00:14] that squirrel? I don't know if you saw that. >> Peanut the squirrel. So, I'm like, "This makes sense. This might go up." And I sold it like for a loss. I put that 1,300 bucks in. I sold it for $600. week

[00:27] later, Binance added that coin as a tradable asset. It went from $50 million [clears throat] I just posted this on Twitter today. My peanut holdings right now would be worth $42 million. >> Hindsight is always 2020 when it comes

[00:41] to investing. I don't know that this guy specifically would have watched his million. >> Does that count as one of those poop >> I think the word you're searching for is >> I actually expect my money to to work

[00:53] for me. I'm not hoping to get lucky. I I you know I think some people go with that saying it's better to be lucky than to be good. I'm leaning more towards the good [music] and consistent than I am to just being lucky and hoping that that

[01:05] lady luck smiles on me. >> I love that. Hey, now I don't know if there. >> How would you invest $1 million? Would [music] you put it all into the S&P 500 or would you use it as a down payment on

[01:18] >> S&P 500. >> S&P 500 or buying into a franchise? S&P >> S&P 500 or buying a business that already makes money.

[01:30] >> Depends on how much money it makes. >> Business or investing it across 20 >> Buying [music] a business because when you have one business and you're all the risk in it and you can actually operate that business.

[01:43] >> Buying a business. >> Buying a business or multif family real >> Multif family for one important reason. Because when you buy single family real when you're buying multif family, you're actually getting two things. You're

[01:57] getting a business that works together. So in this case, you're not only getting estate. So it's a two for one. >> You know, I don't disagree with a ton of those are much easier to do than others. He said, you know, okay, if you had a

[02:11] A lot of times, if you want to go invest in like multif family real estate and with, there's likely you're going to have a whole lot of debt. Whereas if you take that million dollars and you put it in the SP500, you don't have any debt.

[02:23] So those were not exactly apples to apples comparisons throughout that >> Well, good on him. He gave he because those were binary answers. You know, this or that. I'm I'm here to tell you life is not like that. [music]

[02:37] For the majority of people out there who are not in the step eight of financial be your friend. Everybody loves to do the math of what levered debt will do for you because exponentially your money can grow. You put down a small amount of

[02:51] money and then because it's all leveraged up. You're going to make, you know, 10 20% because of the lever debt. The problem is when you're using other people's money to pay that debt and then they quit paying you the rent, all of a

[03:06] quick. >> Did you know that nearly 50% of parents go into debt to take their kids to Disney? The average parent spends $6,000 on their Disney trip. Things like flights, park tickets, food, hotels, all

[03:21] of these things are really expensive when you go to Disney. But by going into debt, you're putting your family at a huge financial risk. So instead of going are also really great ways that you can travel hack so that you can reduce those

[03:35] most important thing when you go on a family vacation is the time with the family. It's not the expense of the trip. It's actually how strong are the memories? How good are the things that you're doing as a family to build that

[03:49] relationship? >> We just spent $6,000 of highinterest >> just for a little Royal Entertainment. The moose says you're closed. I say >> Spending $6,000 for a Disney trip, but you actually put that on a credit card

[04:01] and you're paying uh punitive interest rates on that. that one trip that you thought only cost you $6,000 very likely could cost you 7 8 $9,000 by the time

[04:14] >> And don't don't skip out on the ounce of preparation. The difference a week or two can make on when you go cuz then maybe you don't have to buy all the the premium stuff like the lightning lanes and the other things. If you go when the

[04:28] cheaper and more than likely there's going to be many more discounts that are going to lower that price for you. So, if a large iced coffee is $4.99, you if a large iced coffee is $4.99, you would pay $4.99 plus tax. No, you would

[04:42] would pay $4.99 plus tax. No, you would pay $5.75 plus tax. You don't see how it's because the restaurants raised the menu prices to cover the fees. >> Which means the total you would pay would be $6.15.

[04:56] >> No. >> Why would you think that's not enough? You don't see it's because you still need to add the $4.99 service fee. That's why. Which means the total you would pay would be $114.

[05:12] No. Why do [laughter] you think that's still not enough? You know, it's because you still need to pay the $3.99 delivery fee. You know, it's because that's why.

[05:24] Which means the total you would pay would be >> $15.13. >> No. Why would you still need to add a tip? >> Let's say that you tipped $4. Then that

[05:39] means the total you would pay would be $19.13. $19.13 for what? A large iced coffee. No. Why

[05:52] would you think it's a large warm coffee? [laughter] Why can't I get an iced coffee? It's because you didn't pay the 199 priority >> This is something we even added in our millionaire survey this year was do you

[06:06] millionaire survey this year was do you use Door Dash or you know Uber Eats and use Door Dash or you know Uber Eats and was it like 66% or 67% don't use it at percentage is look, I get it if you get a gift card or you get some promotional

[06:19] but I don't consider that really using it. That's kind of being a financial mutant for using a coupon or discount code. But this is my whole problem with seen people who've gone to like Chick-fil-A and have turned a $10 value

[06:34] Chick-fil-A and have turned a $10 value meal into something that's 25, 30 bucks or if you're feeding the family, you can turn a $40 meal into, you know, 60 70 bucks. It feels disconnected and that's what I I I actually don't use those

[06:48] presented that because it's it's a lot of hands in the kitchen for a simple product that's already kind of an excess of life and and it it that's something you're going to make bad decisions which in our opinion you know Uber Eatats and

[07:02] bad decisions rationally [music] it is going to be melted it is going to cold anymore same thing if you're trying to like Uber Eats or Door Dash ice

[07:14] cream. Ah, maybe that's not the wisest decision. So, if you are going to spend a stupid amount of money, way overpaying for something, at least make sure that you're doing that on something that somewhat makes sense to do. Even if you

[07:28] mistakes, your money story doesn't have to stay the same. >> That's exactly right. You can always make better decisions going forward. And expenses can make a big difference. >> Oh, so get this. My wife and I, we

[07:41] through Monarch. We said, "Hey, we just want to do sort of an audit of what we have going on. And we were amazed to find that we actually had a few mystery subscriptions that we had no idea about. Had no idea they were going." One of

[07:54] them we didn't even mean to sign up for. My wife did literally signed up for it a year ago. So, we canled that Joker immediately. Without Monarch, we would building wealth. Not just making more money, but paying attention to where

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[08:34] Monarch Core half off at just $50. That's 50% off your first year at monarch.com with code moneyguy. >> When can you financially move out to your own place? So whether you live at home or you have roommates, use this

[08:47] test. You need to get four out of four. And if you do, you're ready to move out. Number one is that your rent should be less than 35% of your take-home pay. So you can see that if you make around $100,000 per year, the monthly rent that

[09:01] you can afford is around 23 27 per month. and that's based on your stretched thin by renting a place that you can't comfortably afford. Number least three months because moving out is

[09:14] month's rent plus deposit on top of that. So, you need to make sure you have a cushion so that if you do move out, you aren't cash poor in case an still contributing to retirement even by

[09:26] new rent. And number four is that you have no high interest rate credit card those are wealth killers long term. So if you want to take on the burden of a to make sure your debt is under control. >> Well, Humphrey, I agree almost

[09:42] exclusive. Only thing I would change is you said that your housing cost should not exceed 35% of your net pay. Well, net pay can be so fluctuate so much depending on like your benefits and depending on your 401k contributions,

[09:55] So that's why we like saying instead of doing 35% of your net pay, do 25% of know based on the income you have coming in where you are threshold-wise, but

[10:09] >> I was going to add a step five and six is step five get roommates and all this >> Sure. >> Step six was live at home for a month or two more so you can afford that purple leather recliner or the the subwoofer.

[10:24] decision-m when I graduated college. I think I went back lived at home for 2 or 3 months for the sport. It was they didn't it wasn't a purple leather but is was but it was it was definitely a chartreuse or it was it was some

[10:38] chartreuse or it was it was some purplish burgundy purple color. Ugly. >> Dear God, what is that thing? >> But man oh man was I proud of that leather recliner and it was paid for because I stayed at home just a little

[10:51] bit longer. Why is investing in Pokemon cards seem to be what everyone is little pieces of cardboard are currently crushing the stock market right now. If you look at the data over the past 20 years, the S&P 500 is currently up 421%

[11:04] which gives it a very respectable rate of return of 8.79% per year. However, these are rookie numbers because if you look at baseball card, baseball cards is currently up 716%. Basketball cards is currently up 1,17

[11:19] American football, is currently up 1,289%, which is a rate of return of 14.22% year-over-year. Where does Pokemon cards land in all of this? Well, Pokemon cards is currently up 3,261%.

[11:34] Pokemon cards is currently on a league of its own. That is a 20-year average rate of return of 21.42% year-over-year. This is 2 and a half times better than the S&P 500. Will Pokemon cards continue to outpace the

[11:48] fluke? >> This is just a lot of people running to >> No. See, I'm frustrated because this was a math crime. There are lies. There's >> Cuss words is illegal. >> And then there are statistics and

[12:03] And that's exactly what happened right here. here cuz here what he did is he is taking I don't know how he's coming up with the average across all American American baseball basket uh basketball cards or baseball cards but he's

[12:16] comparing that to a basket of goods in the S&P 500 if you were to go pick any of the individual stocks in the SP or if you were to go look at Amazon over the last 20 years Nvidia over the last 20 years Tesla over the last 20 years fill

[12:28] choose there's a really good chance that those companies likely would smoke the those companies likely would smoke the numbers here,

[12:40] Cuz if you were to just go buy right now a pack of Pokémon cards, whatever that is, $10 pack, and you were to hold that singular $10 pack for the next 20 years, have gotten so lucky that one of the cards in your pack was so valuable that

[12:53] you recognize a 3,000% rate of return in that. However, if you go by the S&P 500, that. However, if you go by the S&P 500, you will own the 500 largest companies, best performing companies, largest in market capitalization companies in this

[13:08] country. It's not opening a pack of stocks and hoping you get lucky with one of the stocks. I think you are making a solid point cuz he very well you could have flipped the script on this instead of instead of the S&P 500 you could have

[13:20] done Nvidia or Tesla or any of the high flyers and it would have completely crushed what happened to Pokémon. >> How high can your credit score be before it gets kind of weird >> like you know building a credit score.

[13:33] >> Yes sir. >> Oh I got a high I got a high score. You >> I think you stay mids. >> You don't go all the way to seven. I think you just stay around the 650. >> 610.

[13:46] >> 6 610 max. >> Yeah, max. Cuz like at that point, bro, >> Yeah. >> Oh, I got this loan. Thank you, sir. Oh, >> And you repetitively going back cuz he going to petit.

[13:59] >> So, you really want chasing thrill. >> Then you want a better interest rate. role? >> I never understood that. sat well with me. >> No, it's it's egregious, but Building

[14:12] your credit score lets you know that every time the bank said, "Give me your over for the bank. >> Stand your ground. And that lets everyone know it's like

[14:24] >> Yeah. I pay nobody back. >> I haven't been able [laughter] to buy a car, a house, an apartment in years. But, you know, I stand on my principles. [laughter] >> Oh, that's good stuff.

[14:38] >> Uh yeah, that's hilarious. Uh, that'll work. That'll work once. You can do that some money and take and say, "Hey, I'm not giving you this money back." But you third time or the fourth time. Obviously, that's hilarious. And what

[14:52] people don't realize is a lot of people want to suggest that having a really high credit score is like an I love debt score. That is not the case. Having a really high credit score suggests I am responsible and understand how to use

[15:06] responsible and understand how to use money as a tool and use it well to my benefit. I do not think I would propagate the information these guys are >> it's also by the way it's not just for borrowing money anymore. It's also hey

[15:18] are you have to make a deposit when you set up your utilities or is your property and casualty insurance going to be at the preferred rate because you of things that now go into credit score. And I'm here to tell you, if you just

[15:30] pay your bills and pay off your debt exactly like we share in the Financial Order of Operations, you're going to be in the high 7s 800s range without even trying. It just happens naturally. So, just respect the obligations you've set.

[15:45] Don't borrow outside of what your wallet or your purse can afford and you'll be a okay. There is a better way to do money. If you want to know how to do money moneyguide.com/resources. Check out all of our resources, all of

[15:58] our archives, all of our tools out there to help you make better financial decisions. I think we chewed through the jaw-dropping videos, Bo. I'm your host, jaw-dropping videos, Bo. I'm your host, Brian, joined by Mr. Bo, Money Guy, out.

[16:11] Brian, joined by Mr. Bo, Money Guy, out. [music]