Why Americans Are Actually Broke! (2024 Edition)
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- Опубліковано 16 тра 2024
- Why Americans Are Actually Broke! (2024 Edition)
It's easy to put all the blame of our finances on the economic factors working against us right now: the lasting affects of high-inflation, low housing affordability, and more. Those have their impact, but we want to dig deeper than that. Because as financial advisors and people that have been around to see Americans in good times and bad, we recognize that there are some persistent behaviors that need to be fixed.
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Since the commencement of Biden's presidency, the United States appears to have witnessed more adverse outcomes. These include impacts on the markets, such as declines in prices, significant inflation spikes, and instances of bank failures. I am contemplating whether the sudden surge in interest rates will be advantageous for value investors or if it might be more prudent to temporarily avoid involvement in the stock and financial markets.
Engaging in the strategy of "buying the dip" can yield long-term profitability. Nevertheless, caution is advised during bull runs, and it is recommended to consult with a knowledgeable advisor to achieve your growth objectives and avoid potential errors. Elevated interest rates generally lead to decreased stock prices.
my plan next year is going on 80% equities 20% cash. One of the things I have learned in my years of investing is not to completely move in or move out of investments, if you have quality assets. It is better to trim, and then hold some cash for buying opportunities. Before the latest drop in the market was down to $105k but currently at $650k, marking a 25% increase from last year
@@Joseph__McKenzie_ How can I participate in this? I sincerely aspire to establish a secure financlal future and am eager to participate. Who is the driving force behind your success?
Her name is. ‘JENNIFER LEA JENSON’. Just research the name. You’d find necessary details to work with a correspondence to set up an appointment.
I just googled her and I'm really impressed with her credentials; I reached out to her since I need all the assistance I can get. I just scheduled a caII.
Status, status, status. It's a social problem. Social media made it worse. People will pay anything and go into crazy amount of debt to prove that "I'm better than you are."
Ding, ding, ding ! 100% truth
Buying stuff doesn't indicate one is better than others; having more money squirreled away does.
Spending money you don't have to buy things you don't need to impress people you don't know or like. Then when the straw breaks the camels back, it's the economy.
I look at these people that I know, feel envious sometimes that I am not reckless and spending the money that I actually do have on things like 5 star restaurants, 4 or 5 star hotels, $1K boots, etc. but still don't go into debt in order to try and prove that I am better than them. Self control, a husband that is self controlled too and looking at my account and feeling bad spending it on certain things is good.
So true!!! You can definitely tell when you see a luxury car with a personalized license plate. Usually this plate shows their job like “Lwyr” or “pharmgrl” .
Kid I work with. Masters in EE, coding genius… young but still… thought it didn’t matter to pay more for his brand new car (he doesn’t even drive) because the interest is built in and won’t change anyway. Interest is almost 9%… not curious at all about budgeting or investing. So good at math, no financial education. Sad really
College teaches people what to think instead of how to think. The bank told him the payments would be x for x amount of months. He has never thought for himself and goes by what he is told. The average mindset for college educated people. They were told to get food grades, go to college, get a car, buy a home, get married and have 2.3 children. They claim they can't do that because they can't think for themselves and save money.
Try this: Ask what they paid for the car. Then ask how much was put down, what the payment is, and for how long. Compute the real price, and tell them what they REALLY paid. I've done this with a few people and they're honestly shocked.
Then just let them get screwed. Him paying interest is how the hosts in the video get rich while doing zero actual productive work and producing zero products.
I know a girl who works for Credit Consolidators. She said the majority of her clients are high net worth individuals like doctors and lawyers making well over 6 figures per year. Said their credit card debts are big 6 figures as well. She counsels them and asks why they never paid the minimum balance. Their response is because they believe they don't have to pay it.
@@anniealexander9616say what you want but college saved my life ... considering where I'm from and what I currently make...I'm grateful
People often like to put it on politicians but the truth is Americans have been broke for decades because they're generally awful savers. The social media obsession has definitely contributed to the consumer debt society we live in.
Yes that's a problem but let's also acknowledge what happened over the last 4 years vis a vis the national debt.
Americans have the smallest savings rate among other developed nations
@thedude5040 That's because U.S. banks have shit interest rates.
Touché 👍
@jeffwhite3021 has nothing to do with interest rates. Americans SUCK at saving money. I have a savings account earning 4%. It's the highest interest rate in the last 20 years and yet people are saving the least when savings account interest rates are at all time highs. Now investment rates are way different. My brokerage account has made a cumulative 200% over the last 5 years.
Exposing students to financial classes in school would certainly help, however I find it unlikely most would pay attention any more than they do in other classes. Most students probably wouldn’t remember any more from these classes than they do from their geometry class. The best thing you can do is be a good example to your own children and teach them good financial habits early.
People have easy access to money this is why they are broke. If you do everything with what you have and no credit... oh man.
I did learn about compound interest in school (UK). I can't even do long division anymore without a calculator but I still know that compound interest means getting interest on your interest. It's amazing how much knowledge you retain after decades of not using it. Whether they apply that knowledge is another thing altogether but it would be nice to give them a fighting start. Yes, it should be parents teaching their kids life skills but a lot of parents don't have these skills to begin with.
I remember my finance class in high school. Compound interest was covered, but not to this degree obviously.
You heard Bo mention beakers and titration from high school chemistry. No way he has done a titration since HS. Even if people got that level of familiarity from a high school personal finance class, that would be an improvement.
I give my students a copy of The Money Guys free flyer about how much you have to save monthly to have a million by 65. Their eyes get really wide when they see the difference between starting at 20 and starting at 40.
If you haven’t already, I’d love to see an episode where you break down how a low-earning individual should budget their income (say, $40k) to follow all of your guidelines. Make sure to also factor in unexpected health emergencies, home appliances breaking down, childcare, etc. and I think it will become more clear why it’s very difficult for those Americans to save anything meaningful.
This would be great. Feels like every personal finance rule starts with an assumption you at least make 100k.
Anything can be done if you put your mind to it however it may result in you having to live in a car.
They won't
Not the answer you want, but you’re renting a room, using public transport/biking, eating frozen meals, skipping health insurance, and hopping on mint mobile,living in a low CoL city.
In the meantime you need to start building your skill set/certifications so you can make more. As you make more you can gradually start to tick off some of those boxes.
Now if you have kids and are in this situation. Then seriously shame on you for being so stupid and selfish. You have kids when you’re ready, not when you want them.
They've done several. Check the archives.
Sadly, 95% of those watching this episode will fail to appreciate the greatest moment...Brian's attempt at a "Beeker" impression. Well done Brian. 👏
3:52
Oh no, I loved it
People are not good at telling themselves no. Nor can the majority of people think and act for the long term.
One of the issues with having many types of debt is the trouble we had back in my younger days, we couldn’t make all the minimum payments and not add more debt. We had to do beans and rice to get back on track and never do that again.
We work for years to earn $1million on our retirement, while some people put thousands of dollars in some meme coins and they become millionaires.
not exactly sign of a healthy market huh?
best signal provider in the market. Knowledgeable, level headed (no loss like some other traders who recently jumped on the bandwagon)
Yet that same risky behavior causes them to lose their millions in meme coins while the stable investor surpasses them.
And you are spreading misinformation and lies, there’s no shortcut in lives. These coins you are so desperately selling will crumble like a cheap wall
Thats betting in general though
My problem with the "They don't teach it in schools!" excuse is that schools still teach *math*. The principles of mathematics don't change when a dollar sign is placed in front of the numbers. Everyone was taught; only a few apply what they've learned.
Most teens aren't wired to apply simple math to their future though, they need someone to make it so obvious how much debt will handicap them that it smacks them in the face. Personally, if I had someone that was passionate about personal finance that I would've made the commitment a lot sooner than I did...
1 in 3 kids in America can't read, despite being taught how to in school. So teaching finances and taxes in school won't matter, it needs to start at home.
I don’t think math is the main problem, I think we should be teaching the importance and significance of compound interest (in terms of investments)
Their Math isn't Mathing at 22% APR or higher.
The problem with schools is that there is too much focus on theory and not enough how this will help me/how will I use it. I did extremely well in math, got a CS degree and graduated with honors, yet I still struggled with applying the theory and concepts learned.
For the last 10 years our public school system in Southeastern Virginia has required that all high school students complete a Personal Finance course prior to graduation. So glad that all of our kids have taken part in that. My husband and I however have been their primary financial teachers. It all starts at home.
most people I come across make ridiculous decisions financially and act bewildered when they end up having to drain their 401k to catch up.
Some people are beyond help financially.
Prime example of wanting it now mentality is someone I work with took $10K from her 401K to go to Disney. She could care less about the 10% penalty or loss in compounding. As she said “my kids deserve it”!!!
I get why she'd want to do it. They're only young once and they'll not necessarily always want to go on vacation with their parents. But taking money out of your pension pot should be the last resort of desperation, not a way to pay for luxuries.
My husband and I took my stepdaughter on our second "last family holiday ever" last year. We bought the holiday, a new fitted kitchen and a 2nd hand car, all in one month, in cash. While I was on a career break. If you work your butt off and save up you can have pretty much whatever you want in life.
That's irresponsible.. My husband didn't want us to take our eldest child to Disneyland on a certain date for his birthday because just the tickets cost $571 for the 3 of us (and he was already going to have a party with other kids a different day) so we went to a cheaper amusement park. I can't imagine sacrificing money from our retirement for a $10K trip and definitely not to Disney.
10k from a 401k? Well she'd still have 391k left so that's good at least.
@@JoeSoCal2303 😂😂😂
😂😂
I hear a lot of this "It's just money, you can't take it with you" mentally
you can't take it with you, true. but you are likely to live to a "ripe old age" and will need funds to live on when you can no longer work. even if your goal is to spend as much money as possible in your life, saving and investing is still the best strategy - the spending just happens later
All while those very same people will spend their money on lottery tickets every week hoping to win millions of dollars 😅
@@Glooberloob 100%..... they worry more about the here and now, and to hell with the future
Whatever leftover is your legacy, better than some broke ass F who dies without any dignity
that's the essence of YOLO
The problem is Americans are raised being sold to constantly. Buy! Buy! Buy! Can't afford it? Put it on credit. To get ahead, one has to aggressively safeguard oneself against this.
Agree family life and the example it sets is a huge influence.
Sure but at least acknowledge reality and what's happened the last 4 years
Agree - it's a barrage of marketing ploys, often for things you don't really need or could live without for a while to save up. A blender on Amazon? $50 or 4 easy payments of $15 (gotta get that extra bit). Or the obsession with subscriptions, whether it's movies, car features, or monthly boxes.
Dont buy....easy.
Great comment. No one can spend money like baby boomers and they were the first generation raised on tv.
Our public school in NJ has mandatory course that covers Personal Finance topics starting in 6th grade
WOW, this should be mandatory in the Jr/SR year in HS
We never felt broke, but we had a lot of expenses with full time careers, house and two kids. We knew we were comfortable and always lived below our means and invested.
It wasn't until in my early 40's that I started getting burned out from work and looking at our financial numbers closer and realized we were actually considered rich. The bull market of 2019, 2020, 2021 made us feel REALLY rich.
Just wanted to share our experience and let the kiddos know: work, save, keep you head down and ignore distractions towards your personal goals and by your 40's you'll finally turn that financial corner and see your finish line...
I'm 47 now and been on "cruise control" downhill/coasting since age 43. Good luck!
Great advice, thank you.
Great advice.
Thanks of for the boasting post - does it make you feel better? Noone cares that you are "rich."
I’m a chemist and I make a pretty solid salary. Even use beakers, if you can believe it.
Haha I was just thinking that. I’m a chemical operator and I use titration tests all the time lmao
I think you can get some insight from the microcosm of driving / cars / fuel prices etc. It's just a given / ignored cost portion of a topic that Americans obsess over yet also just kind of hand wave off as a necessity... $70-80k trucks & SUVs - waaaay overpowered for what most people need for daily use... terrible gas mileage that gets exponentially worse at higher speeds... yet people think nothing of $100 - 120 fill-ups a few times a week. It's just one small step below literally lighting your money on fire - yet for so many people I know, it's not even remotely on their radar (their only consideration is: "why is gas so expensive ?" - never considering their part in the equation).
Let's get our truck lifted too while we're at it. I will never understand this truck and SUV craze. Anyone who gets an SUV would be better off with a minivan, or at least a crossover.
Unless you live on a farm in the middle of nowhere and haul stuff a lot it doesn't make financial, environmental or any sense.
@@DrProfSlugger 100% ppl have been tricked. On the NotJustBikes channel I believe, he used a website to compare an Escalade with an old station wagon, and the station wagon had more usable cabin space. Though the Escalade is significantly larger. Proving Americans used to haul their family on roadtrips and go camping and all that stuff WITHOUT a behemoth of an SUV or truck.
@@lexa3331I'm English. My car is 7 years old, cost £7000 ($9000) when I bought it last year. Does 70 miles to the gallon and if you fold the back seats down you can fit a single (twin) bed in the back. A typical SUV will cost you more to buy and twice as much to run. A typical new SUV costs more to purchase than my house.
One of the things that grinds my gears (I had to do it) about car culture in the US is that somehow having certain cars is ingrained in identity, particularly in regard to how "manly" a guy is. That "real men" drive trucks, regardless of what they need a truck for, and that "weak men" drive hybrids/more fuel-efficient cars. Nah, the hybrid guy saves a boatload on gas and has easier parking. When I see what people in other countries say about car ownership, there's no sense that bigger is better.
most americans make 56k or less a year before tax rent takes 15-24k a year alone
Never more free amazing information available and yet people continue to be ignorant and exactly the same. Change takes being uncomfortable and learning new ways to do things
Many Americans take many luxuries for granted. I grew up without AC. Here, it’s standard. I only went to restaurants for special events, maybe three times a year. Even weddings aren’t a huge expensive where I’m from either. It’s getting used to luxury lifestyles and increasing lifestyle habits combined with a ton of debt, is a true wealth killer.
Used corollas are going for 15k+ for cars with 50k+ miles. 5 years ago you could get one for half that price. It’s not just a behavior thing.
I do not even remember signing up for student loans when I was 18-19 or so. I think my parents just handled all my college finances. I had mental health struggles back then so I was pretty checked out a lot, fortunately I got an affordable degree in a good-paying field so it worked out for me, but I could have easily gotten saddled with crippling debt.
Some of us max out our 401k AND understand credit card rewards.
Spend $100k and get rewarded with $1.5k in kickbacks
Sounds like a winning path to wealth lol
@wan3416 it's not a path to wealth. It's a small bonus for people who responsibly use credit. Plus I can get much more than 1.5 percent
@@wan3416Dave is that you? Why does everyone in the anti credit card group pretend like people who use them think they will get rich on rewards?
If I can’t get a discount for paying cash, I will use a credit card EVERY time.
Housing costs are killing us here in HCOL areas. Where I live, there is nowhere to rent less than $3.5k without getting on a housing program wait list (which is approximated to be 2-3 years long.)
I preordered your new book Brian. I was doing pretty good before finding your guys, since I found you guys I’ve made some minor changes but they have made a huge impact in my financial and personal life. Thanks, really appreciate it
What were those small changes that made such a big impact for you?
@@Y0urTiaRica just increasing my retirement contributions from 18% to 25%. That smallish change will pay me in the long term, especially since I could afford it but I wasn’t doing it for one reason or another but it wasn’t based on my finances as I could afford to do it, hope that helps
I’ve debated this for a while, and honestly it’s both a personal issue and political. If wages aren’t keeping up with inflation, schools are training future skills, increased tax/regulation, and culture turning more and more negative, of course Americans are doing much worse financially.
I also believe in accountability as well, and I been able to change my family tree by developing myself, saving/paying off debt, and teaching my kids solid principles.
But everyone’s story is different. There are people with same work ethic, knowledge, accountability, etc., as me and most of us here, but they just haven’t been given a fair chance or opportunities to build themselves up. It’s tough out here for a lot of people.
"People don't know what they sign up for when it comes to debt"
Me who watch Caleb Hammer: SO FKING TRUE. People sign up for 600% loans..... absolutely disgusting companies
I do think people know but they have the “those are problems for later” type mentality.
I bought a house in July last year, 2nd home. My mortgage company raised my escrow payment by $300 a month as of July this year (likely a new tax). This wasn't something I could anticipate or factor into my expenses a year ago. For some folks, this would constitute a financial emergency. While I'm OK, I'm going to have to look for a higher paying job to sustain this loss on income long term.
So while I'm not broke, I am now having to significantly adjust my budget.
The thing is, this tax is based on house value, which artificially increased in the last few years due to corporate driven inflation.
A few years ago, the tax would've been a third of what it is today. So all these folks who bought their houses 10 years ago and never plan to sell are in a way worse spot.
I am SO excited for Bo to tell us why he's SO excited.
Graduating with debt, getting your first professional job, then deciding you DESERVE a new car and new house right away is killing a lot of people I know. The way we know we deserve something is when we have money to pay for it.
Nah. Plenty of people deserve to have big houses and nice cars and will never be able to afford them. Few of us get what we deserve in life. Self worth and net worth have no correlation. But we do need to get away from the idea that spending beyond our means is some kind of a reward to ourselves. It's not self care. It's self sabotage. You might deserve a Lamborghini but if you've only earned a Lambrini that's the reward you're going to get and you might as well make the best of it.
Listen to these guys. This young Boomer heeded the advice of OG Dave Ramsey and now am comfortably retired and completely debt free. Oh, and I drive a Toyota Corolla. Good luck folks. You control your financial destiny.
Brian, I got a BA in the 1970s ( Bus/adm) and only 2 courses pertained to me, Investing and Real estate. That is how we made it in the long term as your show amplifies.
The money guy team is doing such a valuable and important thing. It’s education but it’s also motivation, helping people to stick with the difficult money smart behaviors. Thank you for what you do! I preordered Millionaire Mission on Audible and will force it into my children’s ears on a coming roadtrip
I'm broke! I have a decent sized brokerage account, but with my job cutting out overtime and the high cost of everything. I pay our bills, and there's nothing left over to invest or save. The stress is real!
Growing up, I never thought I would be grateful for being raised in poverty. But as an adult, learning from all the bad practices of my parents was an invaluable learning experience that has helped me move immediately in the direction of financial mutant after graduating college.
The American economy relies on Americans spending and borrowing, but that makes individuals poor. Seems like we need both financially responsible and irresponsible people to keep the economy going.
Nah. People who are financially responsible benefit from financially irresponsible people. The points you get when you use credit cards responsibly comes from people who don’t. But the economy would be stronger overall if everyone was investing.
Disagree. A tidal wave of suddenly financially literate and responsible people would certainly suck out money of the economy in the short term and hurt us all, but long term, the growth experienced on Wall Street and Main Street alike will be real, less prone to bubbles, and healthy for all of us
While there are macro issues that affect society that do need to be fixed (income and wealth inequality are huge, private equity and short term planning from Wall Street, inflation, industrial policy, etc.). There’s a lot of people that really just are terrible with money.
It certainly seems like people being terrible with money is a symptom of another macro issue. People talk about financial literacy but most of our economic systems are designed to take advantage of these people. People should definitely learn to control what they can control, but the cards are stacked against most people from the start.
People bad with money will be bad with money no matter the external conditions. Like a person who can't swim. It doesn't matter how nice the pool is or how nice their bathing suit is.
@@stevenporter863yeah yeah but the differences we have a system that easily makes it possible to be ruinous. In most of the other countries I've lived in, people do not have such easy access to credit. You can't just open a credit card in 5 minutes. That will give you a credit limit. That might be 4 or 5 months of your salary. That's only possible here.
@@discocycle That may be the case in other countries: but all the rules and customs don't replace individual common sense. Just because the country makes it easy to get doesn't mean people need to get drunk on credit.
@@stevenporter863 I totally agree, but the point is that the access is there. It's like if you live in a house where there's no junk food. You might be really craving it... But if it isn't around, you're not going to have access to it. Temptation matters a lot.
My highschool in Missouri had a financial eduacation course that was required to take to graduate high school. I gotta admit when I took it then I didnt really care or find that information fun to listen to. It took me until 3 years ago to start getting serious about saving/investing and now it makes me excited to see where my investments take me down the road and the options it will bring me when the time is right.
I'm 26 now but the one thing I will remember from my financial literacy class is to "pay yourself first"
TITRATION
(also known as titrimetry[1] and volumetric analysis) is a common laboratory method of quantitative chemical analysis to determine the concentration of an identified analyte (a substance to be analyzed). A reagent, termed the titrant or titrator,[2] is prepared as a standard solution of known concentration and volume. The titrant reacts with a solution of analyte (which may also be termed the titrand[3]) to determine the analyte's concentration. The volume of titrant that reacted with the analyte is termed the titration volume.
There are definitely tons of behavioral problems (people with 100k+ incomes still live paycheck to paycheck), but keep in mind the median in the US is around $70k while the median rent is around $2k so nearly half of working Americans will likely struggle to find housing for less than 30% of their income. That's just based rent, not including fees, utilities, ect...
Also, people definitely waste tons of money on cars they can't afford. But if we actually had the infrastructure to allow people to get around without a thousands dollar death machine I'm sure it would save Americans millions in car expenses.
My 2.625% interest house loan is "good" debt
Dude it’s still debt! Every time you pay interest it’s you saying I think I would like to earn a little less money
@@Helena-ou8ry I think you do not understand how money works. I borrow money for 2.625% interest and invest it at 10%+ average return. I make a bit more money every time I pay my house payment, not less. I fully max 401k, HSA, Roth IRA, and make additional after tax 401k in-plan Roth conversions. I quite literally invest every dime I can as a supersaver, and that includes all the money I do not send to the bank to payoff my house loan early.
That arbitrage in interest rates helps make me rich. Now its true that if someone borrows the money then spends on life-style creep and vacations, they would be "earning less money" as you say it. But not me because of my use of the arbitrage for investment.
Mine is 2.75%. Why in the world would I want to pull ‘extra extra’ money from my portfolio that has averaged 13.7% for the past five years. Or worse, if you’re young and you’ve got a sub 4% loan, but don’t max out your 401K because someone told you that you need to pay off that loan ASAP.
I had to educate my on personal finance right around the years of 1999-2000 when I started my career, I wanted to do more than just pay bills I wanted to control my finances I knew saving was important and I hated consumer debt I just need more knowledge. So I went to the library and read darn near every personal finance book I could get my hands on starting with Suze Orman 9 steps to financial freedom.
I luckily had a grandparent who was a president of a bank and then became the assessor for my city. He instilled that mindset into his 8 kids and my mom taught me.
Single largest thing holding people back is a lack of personal responsibility.
Everyone is out there pretending someone else is going to swoop in and fix their problems.
News flash. It's on you.
True!! I don’t feel like paying for someone’s $260k degree in Black Female Feminism PhD degree. (Reference to the Dr Phil episode from last week) This is not a random degree I wrote down but a real thing.
Rents are out of control. Food prices have skyrocketed. Cars are $15k for a used beater. Insurance rates have gone up. Interest rates are the highest they’ve been since the Great Recession. There a lot of systemic head winds for middle and low income households. Basic things are becoming increasingly unaffordable.
always encouraging and motivating. Love this episode!
My state has financial literacy requirements k-12
If my wife and I didnt decide to share our finances and speak to each other honestly about our money problems, we would still be digging ourselves into a hole unaware of how much damage we actually did. I mean its a really difficult talk especially when one person may be handling the finances on their own and they dont want the other partner to know that they need help. The important thing is to remember youre communicating and working together to achieve financial freedom...
We buy shit noone needs with money we don't have.
I have 5 kids we live off of one income under 70k and we have a paid off van go on a vacation every year and put money in our savings and 2 Roth IRAs every single paycheck. If we can do that certainly others can as well and the secret to that is budgeting and living below your means
What’re your tips for saving?
@@gunnikr honestly pay yourself first, treat it as a bill even give it a date that’s it “due” in your calendar and make it automatic and separate from your checking account.
Yep as a single person with no car payment my yearly cost of living is like $17k. I don’t understand how ppl making $120k per year can live paycheck to paycheck
Choices.
Have consequences
My parents grew up during The Great Depression. On the one hand, they never, ever put anything on credit. If you didn’t have the cash to buy something, you didn’t buy it. (Home mortgage excluded) I’m 64 and only carried a credit card balance once and that’s when I had an emergency trip out of the country and missed the payment. As for investing, they considered the stock market as gambling and never owned a stock. Luckily for me, I would have gone down that path, but a coworker educated me. I got 100% in the S&P 500 at 30 and never looked back. Balance is now $3.5 million and my starting salary was about $22K.
I drive a 2000 Corolla which I bought new and have owned 24 years of course, but lol, I am comfortably retired. Car payments (over the years) can eat away at any real wealth.
Excellent épisode ! Keep up the good work 💪💪👌👌
I have a difficult time feeling bad for anyone struggling financially that signed up for $740+ car payment(s) or went to an expensive university on student loans (vs. selecting an affordable in state school). Decisions have consequences.
Decisions have consequences but our financial institutions prey on people making these bad decisions.
Sure but you're failing to acknowledge severe inflation.
Even without inflation they are bone headed moves.
@@jeffwhite3021inflation has nothing to do with either of those things.
I definitely ding people for the car payment. But not much for student loans. These are decisions we make when our brains are barely formed! Like having to choose a university at 17... Not understanding anything about money, I'm really lucky that my loans were manageable and I've paid them off, but I really don't expect 17-year-olds to be able to wrap their heads around such large numbers. Also, not everybody has an in-state school they can attend! I live in Rhode Island, so we only have one school that's in state. And out-of-state tuition. Basically anywhere else costs as much as a private university after financial aid.
Awesome show
Cost of living and impulse spending
Cost of living factors in when income is lower but for any household that is 120k+ its mostly a spending issue.
@@BrianNC81 well, I’m 170k with a mortgage that’s 25% of my take home pay after saving 15% for retirement, along with 2 kids, wife and a dog and taxes and more taxes and no other debt than the house. It’s still hard. We don’t buy anything other than food and clothes for the kids. Our cars are also paid off. Inflation is a killer right now. Our property taxes and insurance have also skyrocketed in 2024
@@Anthony-zw1qb I feel that. My housing costs alone eat up basically my entire COL pay raise this year, and there's been a lot of big unplanned expenses along the way (unexpected car problems, house problem, vet emergency). I've tried not to increase my lifestyle and tried to stay on the right path, but it's hard.
People will agonize over minor tax schemes (a lot of which they don't even understand) or their credit score (again they don't understand) while blowing their money on nothing.
So what does balancing your checkbook mean? I imagine it's something like balancing your outgoings and income in a current account.
I was one of those that didn't understand the terms of my student loans. I was told interest didn't accrue until graduation and sat on cash I could have used to pay it down
Federal loans for undergrad usually don't accrue interest until graduation, I thought.
I just went back to school recently as an adult. Unless there's some hidden note, the terms aren't there like they are for other loans. There's no truth-in-lending or something like that that says when loans will start, how much you're getting, any of it. I had money just appear in my account every session because financing thought I needed extra money (I didn't), and there wasn't a way to have that money turned off. I'd just immediately send it back to the lender as a payment, but student loans are not set up like other loans where things are clearly laid out.
@@arh1234 "usually"
I’m old .. I have lived through 13% inflation and 22.75% interest rates 🇨🇦 in the 80’s .. it’s rough times
The companies have learned how to use Psychology to make people spend more and more. A example is sports, 'My team is playing today, I need to buy the new shirt, this and that. Apple has done the same thing...belong and buy the new Iphone. People are desperate to belong and be part of something. In the last 30 years people have become more and more isolated. And the internet and technology has been a major part of that. We do not need as many things the companies selling to us tell we need. And being the weird one out is really hard to do. But as long as the broke people buy stuff...the market will go up.
It’s very rational for businesses to do this; people need to know how to shut off their devices to control exposure to marketing.
@@chemquestsExactly! Companies job to exploit that. It isn't their job to 'police' adult behaviors and bad choices.
@@stevenporter863 while I agree, one could argue it’s irresponsible to be blindly greedy, perhaps unethical. What kind of company do you want to be? In the case of the Goldman Sachs’s of the world, they’ll trip your grandmother and reject her insurance claim…so “just doing their job” doesn’t mean they’re not sleezeballs.
@@chemquests See your point but Goldman is a unique situation. Most companies absorbed increased costs rather than increase prices passed onto consumers since most customers prefer a smaller portion and avoid the price increase - which resulted in shrinkflation. The thing about capitalism it self polices itself since if companies raised prices too much they would lose customers, but when companies could no longer absorb price increases they were forced to pass them to consumers in the form of rapid price increases. Greedy companies, like I said GS is a unique situation.
Agreed - it's marketing ploys, like making you believe that buying toys for your kids shows how much you love them.
I'd love for personal finance to be a class requirement in public school. But we know that schools was never created to teach students how to be independent. One can hope! I do believe our car-focused infrastructure, outrageously expensive higher eduction system, and lack of corporate regulation created the perfect storm for the average American living paycheck to paycheck. The automation of consumption makes it worst.
Budgeting is a skill that should be mastered before HS graduation. Learning about the financial sysyem (retirement, HSAs, HYSA, trust, homebuying, etc.) need to be a part of thay curricukum for sure. I and my sibpings are learning on our own because my parents are immigrants who believe saving is enough. The U.S. financial system doesn’t run like our home country's financially. The U.S. runs ona debt/tax economy
I like seeing the “what $100 dollars gets you at the store” videos and they bought food with minimal nutritional value. Yes food is more expensive but you don’t know how to eat correctly
I can fill up 2 of those reusable grocery bags of food with $100. Cereal, chicken, pasta, milk, eggs, bacon, bread, bagels, veggies, frozen pizza. Everything. I don't buy junk food.
Those grind my gears. Yes, there is definitely a general increase in the cost of food. A friend of mine posted a photo of $45 worth of food and it was 2 grocery bags and a 12 pack of soda. One bag you couldn't see the contents, the other was a couple Digiorno pizzas. That soda alone is about $12, so a quarter of that budget was just.... soda. SMH.
Personally it is of my opinion that if students in high school begin making their own money they should have the ability to opt into free financial tools and classes. Think like student accounts with budgeting etc but then we make laws around what can be advertised to people before the age of 21. In my honest opinion I think you shouldn’t be able to take out a normal credit card until 21. Only secured credit cards from 18-21 should be allowed to help build credit.
The sad fact is I took a finance class in alternative high school for credits and it's still not a main course in standard education. I'd like to think that single seed planted many fruits.
After watch a lot of Caleb’s financial audits education ain’t helping. Like they know what the right thing to do is and then just simply don’t do it. You can have a PHD but if you don’t do it don’t matter.
65 pct of people own homes. Homes have risen . Household net worth highest ever Now ! Stock market and job creation highest ever.
People don’t “pay themselves first “
Best financial tip I can offer.
❤
My entire life credit union loans for cars were close of not lower than inflation. So I've always financed my cars.
People don't know a want from a need, and they have to have that NOW not later, if at all.
I had finance class in high scool back in 2002 and it was reinforced at home since my mom went to a 2 year college for bookkeeping back in the 70s.
Unrelated comment. I appreciate this channel for many reasons, one being that I can watch without needing to increase playback speed. Bo and Brian are some of the few content creators who don’t talk like they’ve got a traumatic brain injury
I think the issue is 50-50. Corporate greed and pushing pay raises on to the consumer and the consumer mentality that they need and deserve to "treat themself" all of the time. Instant gratification.
It's sad how difficult things have become in the present generation. I was wondering how to utilise some money I had. I used some of it for e-commerce business, but that sank. I'm thinking of how to use what's left to invest, but I don't really know which way to go.
If you decide to pursue investing, I could advise you to speak with a financial expert who can provide you with comprehensive guidance on how to proceed in order to protect any remaining funds.
I never owned credit card. Never borrowed with %. I found myself with money and some investments. And i thought i was damn poor. This video showing how people live is making me scary yet happy for me i never took any of these.
I had a credit card when I was a student. The bank took it off me after a couple of years for not using it. I didn't sign up for it to get a t-shirt although I did open a bank account for the £200 sign up bonus.
Their problem is communication. Too much communication.
The cost of going to work is offloaded onto people in the US, whether through higher education requirements, vehicle ownership and maintenance, speculation against an uncertain future (employment at will), move to 401k from traditional pensions, healthcare or the limited holiday time (increased burnout and ill health) . All this manifests in a great economy and a social disaster.
went from 50% savings rate two years ago to 45% now. My overall amount is up but my savings rate is down since my overall COL is up.. I know many other who this has hurt a lot more so I'm not crying but I still think about what that 5% would be after compounding for a couple decades lol
I’ve been anticipating the economy to go further south. Been building my cash position and into high yield savings. Ready to buy the cheapies soon
It’s coming not long now
I use my rewards and cash back. Pay it off every month and my Christmas shopping is paid for every year. But you have to pay it off.
I want to know where 0% interest Medical debt falls - like paying off an emergency visit on payments.
I don’t think it’s entirely a behavior thing. The economy is terrible and has been terrible for decades. How can you save money if you can barely pay your bills? Plus, people have to pay a premium to be away from “bad” neighborhoods.
With the 15% example, that $1.4 million in 30 years might go up some due to wage increases, although people hoped for that in 1994 and did not get it. What they do get is purchasing power deterioration, making $2 million in 2054 similar to $200k today. Whats your view on that reality?
In many cases it's a spending problem, but if you have a kid or two it can easily be an income problem.
5:00 The issue is money has become a tool for govt to use inflation to monetize debt. Money should have appreciating power not assets, inverse. This broke when Nixon reversed gold standard with usd peg.
Yikes! Medium 185k for people between 55-64
Choices not education
Connecticut recently became number 10 for requiring finance at HS level I believe. Which is surprising because it's a very wealthy state.
There's hope
I’m excited that Bo is excited for this
Spending exceeds income. Is this the correct answer?
I see what you’re saying but I use titration 😂
Guys, someone has to pay for all the money your money earns. If your money makes money then someone is laboring somewhere making way less than what their productivity is actually generating.
I'm spreading my bets by investing in all the private companies that I want to be nationalised. If I get bought out I lose my dividends but the whole country wins. If I don't get bought out then I'll need all the money I can get to survive in a capitalist dystopia. Things are looking promising for a change of government this year so hopefully I'll not need my little nest egg and we (the UK) can all have a better and fairer future.
I discussed reducing our CC debt with my wife. She told me that having CC debt is normal, why would I want to eliminate it.
Tell her that's the dumbest shit you've ever heard and take control of the finances. Ridiculous. If you guys can do it why wouldn't you. She's cool with 30% interest?
Apply for divorce now it will be cheaper
I got my first credit card in '96 and came with a bag o chips. 😬
It’s all great advice, and more videos reach more people, but I’m so astounded at how these guys can deliver the exact same messages in different packaging 😂
I am trying to teach good money habits to my teen. Some of it is maturity. They are a bit young. It is a long lesson. I set up a Roth IRA and am teaching him investing in robinhood equity investing. But I can tell you they barely get it. Just be patient and continue to help them
Can't blame school for you, kids and parents financial behavior. Public schools just need students to graduate every year. Rinse and repeat. Teach kids about money they haven't made? If this video was available when I was 20, I would have not even watched 3 mins of it. Only reason I started 401k was employee match.