Financial Advisors React to Wild Money Advice

Check out Erin's channel on YouTube: Erin Talks Money Viral money advice is everywhere—but how much of it actually helps you build wealth? In this episode of Financial Advisors React, Brian Preston, Bo Hanson, and Erin Talks Money break down popular financial clips covering investing, HELOC strategies, saving for retirement, earning more income, index funds, college majors, spending guilt, and wealth-building habits. Learn which advice stands the test of time, which strategies could hurt your financial future, and how Financial Mutants can make smarter decisions with their money. Jump start your journey with our FREE financial resources⁠⁠⁠⁠⁠⁠⁠ ⁠⁠⁠⁠⁠⁠⁠Reach your goals faster with our products⁠⁠⁠⁠⁠⁠⁠ ⁠⁠⁠⁠⁠⁠⁠Take the relationship to the next level: become a client⁠⁠⁠⁠⁠⁠⁠ ⁠⁠⁠⁠⁠⁠⁠Subscribe on YouTube for early access and go beyond the podcast⁠⁠⁠⁠⁠⁠⁠ ⁠⁠⁠⁠⁠⁠⁠Connect with us on social media for more content⁠⁠⁠⁠⁠⁠⁠ Bring confidence to your wealth building with simplified strategies from The Money Guy. Learn how to apply financial tactics that go beyond common sense and help you reach your money goals faster. Make your assets do the heavy lifting so you can quit worrying and start living a more fulfilled life. Learn more about your ad choices. Visit megaphone.fm/adchoices

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Brian Preston?

  We've got some wild and crazy clips and as you can see, Aaron talks money.

• 0:11Speaker 01

  Hey guys, thanks for having me back.

• 0:12Speaker 02

  I am so excited that you are here, Aaron, and I can't wait to see what the internet has in store for us this morning.

• 0:18Speaker 03

  What's the first piece of advice I give my kids about money and the last piece of advice and the advice I always give them? Don't spend it. Save it. Invest it. Let it compound. Market gives you eight to 10%. Take 15% of every paycheck. I don't care how big it is or any gift granny gives you or anything you get on a side hustle and invest it. And then by the time you're 65, itchi wawakaramba. You'll have millions in the bank, even if you only have a salary of $65,000, the average salary. This is what the market gives you. Just don't buy crap you don't need.

• 0:49Speaker 01

  100%.

• 0:50Speaker 02

  I love it.

• 0:51Speaker 01

  All of it.

• 0:51Speaker 02

  Don't buy stuff you don't need to impress people whose opinions do not matter. Everything that comes in, save a little bit of that, put it to work, invest it and building wealth is not all that complicated.

• 1:04Speaker 01

  If you think other people are thinking about you, they're not. They're thinking about themselves and their stuff and what they're doing with their money. And also Mr. Wonderful, kudos, is like, he has the best marketing. Who else can call themselves Mr. Wonderful?

• 1:15Speaker 02

  I think it's great.

• 1:16Brian Preston?

  I just appreciate you put on pants for this video.

• 1:18Speaker 03

  I don't wear pants anymore.

• 1:19Speaker 04

  I don't have any pants on right now. I have no pants on ever.

• 1:24Speaker 03

  And so, because I look spectacular with this tie and jacket on.

• 1:29Brian Preston?

  He's like the mullet of his attire and the fact that he's business up top, but then he's all party down below with no pants on.

• 1:36Speaker 02

  I have not seen these.

• 1:36Speaker 01

  Guys, that's how I film.

• 1:38Speaker 02

  Are you serious?

• 1:39Speaker 01

  Yes, I'm dressed up from the waist up and then it's sweatpants, bare feet.

• 1:44Speaker 05

  Heloc, when used for things that create more income and wealth can really produce far more profits for you, which you can then use down the road on which items. The best rule of thumb when building wealth as quickly as possible is really to conserve your funds and availability of capital and delay gratification on lifestyle purchases.

• 2:05Speaker 01

  That was the solid part.

• 2:07Brian Preston?

  I like that part, he closes strong.

• 2:09Speaker 02

  Was he suggesting that the strategy ought to be to like lever up as much as possible, borrow as much money as you can and put that money to work in order to maximize your wealth building potential? Was that the thing he was laying out?

• 2:21Speaker 01

  Yes.

• 2:21Brian Preston?

  Yeah, I heard heloc.

• 2:25Brian Preston?

  To jump right into using your HELOC to build your wealth means you're jeopardizing your shelter, your house that you live in. And that's assuming you even have a house. If you have a low interest rate and you got in pre 2020, then you've already kind of won a lot of the housing parts of it. Let's not go lever that up to your eyeballs so that you can then get yourself and jeopardize this great opportunity or thing that you have.

• 2:50Speaker 01

  I want a place where I sleep, but I can also say my dad has made every financial mistake under the sun. He's done this.

• 2:58Speaker 02

  He's done, he put out money from a HELOC to go invest.

• 3:00Speaker 01

  Put it in the stock market. I mean, he had some times where it was in early 2020, so it did well. Or early 2000s, let's get our decade right. But I mean, he also did it once to invest in an IPO and it went kaput. So I don't recommend it. I wouldn't jeopardize my shelter.

• 3:18Speaker 02

  It's all about risk. How much risk do you really want to take? And is the reward that you might potentially receive worth the risk that you're taking on? And I would argue that risking losing your home, losing your shelter just is not worth it.

• 3:31Brian Preston?

  Hey, I'm in a good mood, though. Can let's just celebrate that he wasn't talking about buying a car with your home equity.

• 3:36Speaker 02

  That's true. He was at least investing it. You look happier. Thanks. I've been spending beyond my, beyond my means.

• 3:45Speaker 01

  I think people are still living on this with their credit cards, but no, don't, don't do that. Just go boost your income.

• 3:53Speaker 06

  You are crazy if you think that the way you are going to get rich is from making the money that you have right now and just investing it in the stock market. That's insane. Why? Because what you are actually doing is you're just letting other people get rich. Who gets really rich?

• 4:06Brian Preston?

  What's she selling?

• 4:06Speaker 06

  The asset managers who manage your money, the banks that hold your capital. Why do they get rich instead of you? Because what do they do? They take your money and they do something with it proactively. So they take your money and they take real risk with it. And I think unless you take risk with your money, but also with yourself, you're never going to get wealthy. And so you and I could go very viral on the internet every single day if we talked about how to invest your first $10,000 to get to $100,000. You could make, you could get a lot of views on that. Except it's totally pointless. And if what we really want to do is elevate people to real wealth, where they have enough money for all the things that they want in life. It's not done through investing. It is done through earning. That is the only way you make real money. Once you make real money, you can make more of it through investing. But in the beginning, you gotta earn. That's it.

• 4:51Speaker 02

  Okay, there were glimmers of truth in the things that she said, but man, she was kind of wandering around in the woods. I want to say the very first thing, what she said is, if you are investing money, you're not making money. Someone else is making money. That's true if all you're doing is parking your money in a bank. And we do see people do that. They put money in a savings account, in a checking account. Well, the bank then goes and lends that money out, takes on risk, gets a rate of return. That's true. But that's not the way that investing works. She's way off on the way investing actually works.

• 5:19Brian Preston?

  Yeah, if you're broke as a joke, she's right. You have to sell your time for wages or earnings or go start a business or something. And then hopefully, if you live on less than you make, you can turn that into wealth over the long term. But more than likely, you're going to want to invest the money so it can start working harder than you do with your brain and your hands. And I like index investment funds. I mean, because then you're instead of trying to beat the market, you are the market and all this great innovation that we see around us. You capitalize off of that.

• 5:49Speaker 01

  Making your money, growing your income, that's going to be the best thing you can do. But put it in the market. Let investment compounding take over because otherwise, you're never going to be able to retire. That is how 99% of the people make it.

• 6:01Speaker 07

  Some people ask me all the time why they should study in college. Now, we can go back to this. What they're asking is how do they make a lot of money? Because they are terrified about the impending affordability crisis. And I feel like I now have to just remind everyone that like the reason we're at an affordability crisis is not that we can't do things inexpensively. It's that we choose not to. It's not a technological failure that we have prohibitively expensive housing, prohibitively expensive healthcare, prohibitively expensive education. It's a policy failure. And we need to put incredible pressure on policymakers to fix that. But when I tell kids that, and then I say, I also have bad news, which is what you study doesn't matter. There is a very low likelihood that your major will define your economic outcome unless you study math at Harvard or Stanford. And if you're going to go to a random college, you know, pick a place on the map, then you're going to study. Anything, study something you love.

• 6:45Speaker 07

  Study something that you are willing to be excited about, not because that thing will get you a good job, but because that thing is intrinsically exciting to you, so that you can taste mastery, which is not something we ever challenge high schoolers to experience, or not often, I should say. Only if you're an elite athlete, or only if you're an elite student, do you really taste what it is like to work very, very hard in pursuit of getting better.

• 7:06Brian Preston?

  I disliked about everything they said.

• 7:07Speaker 02

  Well, I was on a roller coaster. I was with him, and then I was not with him. And then I was with him, and then I was not with him.

• 7:13Speaker 01

  I'm gonna be generous here, because I am in a career field that did not exist when I was in high school, when I was in college, and I didn't know where I was gonna end up. So I've been out of high school 21 years now. So I don't think you're defined by the major you get. Granted, I went to school for business and then ultimately finance, but I do think it's important you like what you do, so you do kind of approach it with a passion. But with that said, like liberal arts versus engineering, or liberal arts versus nursing, there's a big difference.

• 7:45Brian Preston?

  He started this thing as he basically wanted to empower the mob. He told us everything we all want to hear. Hey, it's not your fault, it's the government's fault. And that's the stuff that is gonna put you in a situation where you don't feel like you have control in this world we live in. Yeah, there are things like housing and cost of education for sure that are way more expensive than they should be, but I'm also here to tell you that we are living the greatest time to build wealth right now.

• 8:13Speaker 02

  Yeah, I think if all you do is follow your passion, you're gonna find yourself in the same affordability crisis he's talking about, where holy cow, I went and got this degree, I racked up tens of thousands, if not hundreds of thousands of debt for a job that I couldn't find, that couldn't pay me what I thought I was going to earn, or what would justify the degree that I got. And now, because I'm in this passionate, low-paid job, now I can't afford a house either. And so it's this vicious cycle that is going to repeat itself if you carry out his advice exactly the way that he said.

• 8:41Speaker 01

  I have a flip for that. You should find what you love about the job you have.

• 8:45Speaker 02

  There you go, and go into engineering, finance, or accounting.

• 8:48Speaker 01

  Yes. For reasons you shouldn't feel guilty about spending money.

• 8:55Brian Preston?

  All money, isn't it? That's the first reason. And I, I would say that that means that you can spend that how you want to without guilt. What's your future self think? Tina, what about your money? There are loads of things to buy, aren't there? You spend money on other people all the time, so why not spend a little bit of moolah on yourself, eh? You deserve it. And that's why the next slide says you deserve it. Cause you do. You do. We know you do. Come on.

• 9:26Brian Preston?

  Was that really the video?

• 9:27Speaker 02

  I agree a hundred percent. I agree with this. Full stop. Everything he said. After you save 25% of your gross income for your future self. Why don't you do that? Agreed totally. Go spend, do all the things. You deserve it. You put in the hard work. After you save a little bit today for tomorrow.

• 9:43Speaker 01

  I would make one comment on the slide. There's loads of stuff to buy. Most of us are buying way more stuff than we need. And I just, I hate clutter. We don't need as much stuff as we have.

• 9:55Brian Preston?

  So I'm sitting here, look, I'm the old guy. Sitting amongst you, you younger folks.

• 10:00Speaker 02

  We agree.

• 10:00Speaker 01

  Yeah.

• 10:01Brian Preston?

  I hear that there's this new phenomenon where people get adult beverages and then make PowerPoint presentations for their friends. And like, is that what I just witnessed? If that was presented at a content meeting, I'd be like, how did this guy make it through the, the hiring phase?

• 10:15Speaker 01

  I don't think this is a thing.

• 10:17Speaker 02

  What young people are you hanging out with?

• 10:18Brian Preston?

  No, this is a thing. Are you so old, you don't know this stuff either?

• 10:21Speaker 02

  I'm just saying, I don't think it's a thing.

• 10:23Speaker 01

  I don't think the younger generation is using PowerPoint.

• 10:27Speaker 02

  Oh, look, I can see it, but she's saying it's a thing. This is not a thing. I, I hang out with people all the time. I've not seen one PowerPoint socially. It's not a social thing that we do.

• 10:35Speaker 05

  You work at Taco Bell and have some extra cash lying around. Here's what not to do. Your friend tracks the stocks of different companies and tries to find the perfect time to invest. He sometimes makes money, he sometimes loses money, but in the long run, he goes broke because it's impossible to time the market. But you make a smarter choice. You take your extra money and put some into a high yield savings account and the rest into index funds. These funds split your money across tons of different stocks, which gives you diversification and lower risk. You stop your friend's nonsense and make him follow.

• 11:05Speaker 01

  That was great. I love it.

• 11:07Brian Preston?

  I mean, I want to see the setup. I wish it was like a third camera that kind of showed you all the props and how he kind of did that. Have you ever seen those kind of setup videos? I love that stuff.

• 11:17Speaker 01

  Matt Dave Elliott does that.

• 11:18Speaker 02

  I have no notes. And I think most young people screw this up. They start trying to either pick stocks or do sports betting or go participate in callous here, whatever the thing may be to try to get some edge to go try to beat the market. When if you will just do it the way that he described, it's almost inevitable to build wealth that way.

• 11:39Brian Preston?

  Be the market. Don't try to beat the market. I like the index funds.

• 11:43Speaker 01

  Recently, Business Insider did a video boldly titled, "Don't Retire Early."

• 11:48Speaker 02

  I recognize that voice.

• 11:50Speaker 01

  As no surprise with the most common advice that we tend to hear is that you need to start saving for your future when you're younger. Start as early as possible. And I know in the financial space, maybe it sounds like we're beating a dead horse when we repeatedly say, take a portion of every single paycheck, whether it's $50 or 10% of your pay or 20% of your pay and just set it aside, put it in investments and let it grow for your future. But we have to say it because common sense isn't always common practice. And a lot of times, young people have the attitude of, I'll just get to it eventually. I'll save when I make more. I don't have room in my budget right now. But so often, we end up putting things off too long and then someday comes way quicker than we ever imagined.

• 12:35Speaker 01

  She's great. I love her.

• 12:38Speaker 02

  It was, it was great. Again, I have, I have no notes because I think far too often, people want to save what's left over after they've spent. And if you practice that, then you're never going to have anything to save. That's why we want people to pay yourself first, save first, put the money in first, and then spend what's left over and you find yourself in a much better position.

• 12:58Brian Preston?

  Aaron, that B-roll, is that you or did you find that B-roll of stuffing in the dollars?

• 13:02Speaker 01

  Oh, that's me. That's what I'm doing, hanging out in the kitchen.

• 13:05Brian Preston?

  Because I mean, we've all been there where we're trying, we have so many dollar bills that we're trying to stuff in and the zipper gets in the way. That was really, that was, we love your content. I think you can tell. Want to know more about what you create, including that video? Where can you, where can they go check you out?

• 13:20Speaker 01

  I'm here on YouTube, Aaron Talks Money. That's the only place I am. I'm not on Facebook or Instagram. Don't go there.

• 13:26Brian Preston?

  We believe there's a better way to do money and that's why we always load you up. If you want to go check it out, moneyguy.com/resources. Go ahead and start this journey. We'll give you as much free stuff as we can and build your great, big, beautiful tomorrow. I'm your host, Brian, joined by Bo, joined by Aaron, Money Guy.