Pod Insights Money Guy Show Financial Advisors React to RIDICULOUS Money Clips About this episode Is the Rolex worth the investment? We react to the internet's wildest financial advice, from "turn $60 into $1,000" to meme stock traders crediting algorithms for lucky GameStop exits. You'll learn why mistaking luck for skill leads to repeating bad decisions, why "debt saves you time" doesn't mean debt saves you money, and why knowing how much house you can afford helps you avoid fancy timeshares masquerading as solutions to empty second homes.
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Transcript 3,470 words · 15 speakers
Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.
0:00 Speaker 00 This episode is brought to you by Indeed. You're ready to level up your business, but the pressure to find the right person to make that happen is intense. Indeed sponsored jobs can help carry the load. It boosts your job post to help it reach quality talent fast. Cut through the chaos with Indeed sponsored jobs. Get a $75 sponsored job credit at indeed.com/podcast. Terms and conditions apply. Hiring now? Then this is a job for Indeed sponsored jobs.
0:31 Speaker 01 Low energy, unfocused, foggy? You might be dehydrated. Whether it's hot yoga, over 100 degree weather, or too much sun. Gator Light, with a specialized blend of five electrolytes, was scientifically designed to help move fluids into the body faster for rapid rehydration. Shop now at retailers nationwide. Gator Light hydrates faster than water. Is it in you? Symptoms noted are signs of mild to moderate dehydration. Consult a healthcare professional if symptoms persist.
0:59 Brian Preston? Looky, looky here. Content crew has been busy with some ridiculous financial content.
1:05 Speaker 03 Everyone, I am so excited to see what the internet has in store for us today.
1:10 Speaker 04 I'm gonna show y'all how to turn $60 into $1,000. The first thing you want to do is just go to your nearest gas station and pump some gas.
1:16 Brian Preston? You can go to your job. Go to your job, I bet.
1:18 Speaker 04 And now all you gotta do is wait for your truck, or whatever vehicle you're driving, to fill up with gas.
1:22 Brian Preston? Okay.
1:22 Speaker 04 While you wait for your vehicle to finish pumping, you can clean your windshield wipers. Oh, look at this. It wasn't even $60, that's $58.53. And now that you have a full tank, you can drive yourself to work in two weeks and make $1,000.
1:33 Brian Preston? Exactly right.
1:33 Speaker 03 You're not supposed to ruin the pipeline. You ruined the pipeline.
1:36 Brian Preston? Whatever, I think I might have given him the idea for that. How often do I say that the best way? Sometimes you have to even do 238. So because your first wealth builder is going to be your J O B.
1:47 Speaker 03 That's right.
1:47 Brian Preston? He might be a financial mutant that saw our content and actually said, you know what? Let me make something out of this.
1:52 Speaker 03 I love that. It's not get rich quick. It's not get rich overnight. It's hey, I need to go recognize how do I have a shovel, create an income, have resources, defer a little bit of those resources through discipline, through saving, through building for the future, and build for my future self? I love it.
2:10 Brian Preston? Well done.
2:10 Speaker 05 Everything that I wanted to see, I saw this week. And again, the market is so distracted with so many things. I'm not, I'm not distracted, guys. I'm spending about fifteen to twenty-five percent on this meme stock stuff because it's hot and it's early. And the one thing that we learned from twenty-one, by the way, I forgot to say this. The most important thing when trading meme stocks, when trading any of this stuff, the most important thing is being a little bit early. The last time we did this, I was fortunate enough to aggressively get early on all these trades. Sometimes I exited early on others like GameStop. Do you remember this, Dave? When I posted my exit on GameStop on Twitter and, and I don't know what happened. Maybe there was some random algorithm attached to my tweets.
2:52 Speaker 05 It just triggered some type of domino effect to bigger money. I, I don't know, but that was maybe the luckiest trade I've ever made.
3:05 Brian Preston? It's just, there's nothing, that's, it's gone.
3:09 Speaker 03 Ah, yes.
3:12 Brian Preston? Hey, you wanna get rich? Let me tell you a system that I have that's gonna blow your mind. Get in early, buy low, sell high, you'll dominate the world.
3:26 Speaker 03 Yeah, that's great if you can do it and you can replicate it and you can do it over and over again. But think about how many meme coins, meme stocks, meme fill in the blanks we've seen over the past five, six, seven years. And how many have been the ones that have actually created wealth? And how many have fizzled into nothing? We think there's a better mousetrap and a better way to build wealth and it's not that.
3:49 Speaker 06 Here's why buying this Rolex is one of the dumbest yet smartest financial decisions I've ever made. You see, when I bought this watch back in two thousand and fifteen, at the time it cost me five thousand four hundred pounds. Why it was one of the dumbest decisions at that time was that I only bought this watch with the intention of looking cool in front of people that ended up not giving a. The reason why it became one of the best decisions I've ever made is that this Rolex right here, which is a Submariner, is actually one of the most in-demand Rolexes on the market. This means that going off current market value, I could sell this exact watch right here for around £12,000, which is more than double the original price I paid for it over eight years ago. And an investment like this completely crushes any kind of returns that I've ever had on any kind of stock investment or property.
4:33 Speaker 03 What's the takeaway? What's the learning opportunity? Here, I should go out and buy luxury goods? I should go spend a lot on watches? Just because a poor financial decision turned out okay for you does not mean that it was a wise financial decision to replicate. It means you got lucky and you ended up at the right place, the right time, with the right accident and the right mistake, and it didn't burn you.
4:57 Brian Preston? Just because the market value is listed at that doesn't mean that's actually what your net proceeds would be. There's a lot of friction or transaction costs to actually turn that Rolex into liquid capital for you. If you want proof of this, take it down to a pawn shop, see what they'll give it.
5:12 Speaker 03 So, Brian, here's what I'm trying to figure out. He started off by talking about how bad this investment was, but then he went to...
5:18 Brian Preston? He rubs our nose in how much money he's made.
5:20 Speaker 03 Yeah, and so here's what's not clear to me. Does he think that this was a wise investment and it was a decision that he would repeat? Or does he recognize, oh, wow, I made a foolish decision that just happened not to burn me? Because what I worry is, okay, I made a bad mistake, but it had a good outcome. That means I'm going to go make another bad mistake and hope for another good outcome? Oftentimes in our financial life, it does not work that way.
5:45 Speaker 07 The average American makes what? £58,000 a year?
5:47 Speaker 08 Average worldwide, it's like £35,000 a year.
5:49 Speaker 07 All right. So, someone working a job, £50,000 a year, if they wanted to start a business, how long would it take them to save up a quarter of a million dollars?
5:58 Speaker 08 With that £50,000, they'd have to pay taxes on it.
6:00 Speaker 07 Oh, yeah, taxes, living.
6:02 Speaker 08 Yeah, living and spending.
6:03 Speaker 07 About 10 to 15 years? 10 to 15 years, what'd you say?
6:06 Speaker 08 About maybe eight to 10 years.
6:07 Speaker 07 Now, ask me how long it would take me to go get a quarter of a million dollars from the bank.
6:11 Speaker 08 Probably a week.
6:13 Speaker 07 Thirty minutes.
6:13 Speaker 08 Thirty minutes. Probably five, five.
6:15 Speaker 07 Thirty minutes. Skill levels.
6:16 Brian Preston? Is that all a business is?
6:18 Speaker 07 So, once you understand how money flows and how debt actually works in a debt operated country, which is America, you learn that debt saves you time. And here, here's, here's the craziest thing about it all. Let's say after that 10 to 15 years, you save up that quarter million dollars and you invest in this business and it fails. You want, can you get that money back that you invested? No. What if you fail and it was the bank's money? File bankruptcy and you start new business.
6:39 Brian Preston? Oh, there you go.
6:39 Speaker 07 It's a bank.
6:40 Brian Preston? File bankruptcy.
6:41 Speaker 07 You're not adding no money. Yeah.
6:43 Brian Preston? There's a lot of small businesses out there that are based upon what work you do. I think about your attorneys, your accountants, your doctors. They're all service-based businesses. Much lower, it's more about who you are and the skills you have and the service you can offer than building up a big capital nut to go out there and start a company. You really only need like $250,000 if you're going to be doing manufacturing or something. And that's a much different game than what I think when, when, when we're saying the, the startup of a small business.
7:13 Speaker 03 Man, it's way more easier to go out and borrow money than it is to save up. Well, of course, and in some instances that's necessary. Like when it comes to buying a home, yeah, instead of saving up cash to pay for a home, it's okay if you save it for a down payment and you go out and borrow to be able to do that. But that's a very different thing than what he's talking about. He's using the same logic that, man, I could go save up to go buy something at a store or I could just swipe my credit card. You know how fast I could swipe my credit card? Just because you can borrow, just because debt's available does not mean that debt is always the right solution for the purchase that you are making. One, that's not the way that consumption works and two, that's not the way that business works.
7:52 Brian Preston? Easier is not necessarily better.
7:53 Speaker 09 What's the most legit get rich quick scheme in history? Simple, figure out how to make a hundred grand a year and then move to Brazil or Thailand. Now you're a millionaire. It's not how much you make, it's how much buying power you have. It's not how much you make, it's how much you spend.
8:09 Speaker 03 Well, sure, if you want to live in Brazil, or if you want to live in Argentina, you want to live in one of those places. A lot of us don't necessarily want to live in those places. We like the place that we live in, like where we have relationships, where we establish. Yeah, there are certainly lower cost of living places, but that's no different than saying, hey, you ought to just go find the absolute lowest cost of living place in the middle of Arkansas and go live there. How far your money goes, only one part of the life equation that we get to live.
8:36 Brian Preston? Well, can you go home and record the conversation when you go home and tell your wife and children that you're moving?
8:42 Speaker 03 We're Brazil.
8:43 Brian Preston? Brazil or Thailand.
8:44 Speaker 03 Let's go.
8:45 Brian Preston? And tell me how that goes?
8:46 Speaker 03 Yeah, it's not gonna go good.
8:47 Brian Preston? With kids and schools and, and all the churches and everything else that you have, you know, roots in the ground with.
8:55 Speaker 00 This episode is brought to you by Indeed. You're ready to level up your business, but the pressure to find the right person to make that happen is intense. Indeed sponsored jobs can help carry the load. It boosts your job post to help it reach quality talent fast. Cut through the chaos with Indeed sponsored jobs. Get a $75 sponsored job credit at indeed.com/podcast. Terms and conditions apply. Hiring now? Then this is a job for Indeed sponsored jobs.
9:25 Speaker 10 Low energy, unfocused, foggy? You might be dehydrated. Gatorade Zero powders have been scientifically designed to help improve hydration balance in the body with a clinically proven electrolyte blend and no artificial colors or flavors. Great tasting hydration, no matter where you're going. Shop now online or at retailers nationwide. Gatorade hydrates better than water. Is it in you? Symptoms noted are signs of mild to moderate dehydration. Consult a healthcare professional if symptoms persist.
9:53 Speaker 11 Bought this $52,000 Toyota Sienna less than a year ago. Today, it's fully paid off. But here's the catch, we didn't use any of our salaries to pay for it. We have a baby on the way, so we wanted to eliminate some of our monthly expenses. Originally, we were going to pay cash, but if I wrote a check for $52,000, that money is gone forever. So instead, we did something that goes against all traditional financial advice. We financed the whole thing instead. But we didn't buy the van until we had enough assets to cover the payments for the van. For two years, I invested in alternative investments like small businesses and real estate. By the time we signed for the van, those investments were paying us double the return than the interest rate on the loan. Then we used that passive income to aggressively pay down the car notes. The investments essentially paid for our new van.
10:36 Speaker 11 If I had paid cash upfront, I'd have a paid off van and then no cash in the bank. But because I did it this way, I have a paid off van and I still have the assets bringing in monthly income. Don't buy luxuries with your labor. Plan ahead and invest in assets and let them pay for your liabilities.
10:52 Brian Preston? I almost felt like he forced the content creation on this is because he was like, hey, I bought my wife this minivan. How can we make this somewhat deductible? So maybe I can deduct a portion of this. Oh, I'll throw it in this video and say, hey, I set up all this, you know, side hustle businesses over here because I didn't use the $52,000. It all paid it back. It felt kind of clunky to me. It didn't make sense.
11:13 Speaker 03 Here's all he said, if I can save dollars and invest dollars and create passive income, the passive income that I can create can pay for my living expenses. That's all he said. Well, that is the definition of working towards financial independence. I want to put my money to work and that money's going to work harder than I can. And the money that money earns can then be used to pay for my living expenses. That is a true statement. Now, what he did that was a little more aggressive is rather than waiting till he had a big pocket of, a big bucket of assets and in financial independence, he said, I'm going to go out and lever, I'm going to borrow all the money in this van. I'm going to pay an interest rate on that, but the money I'm going to create on my passive investments is going to be greater. I'm going to play this arbitrage game. And in this situation for him, that worked, but that works until it doesn't work.
11:56 Speaker 03 A better method is build up a healthy, large base of assets where then you're not just counting on those passive investments. To pay for a car payment or a note or a loan, you can actually count on your passive investments, your portfolio, to pay for your entire life.
12:13 Brian Preston? But the thing is, that video did nothing for me. Like, what do I do on my next dollar based upon if I took his guidance? I mean, Roth IRA or what's it gonna be? Pressure washing driveways? What's, what's, what's this thing that's going to actually create the money to pay off the minivan? I didn't find any actionable advice out of that.
12:31 Speaker 12 We hit upon the idea of co-ownership, which is what Picasso allows you to do. You buy a home in eights, one eights, two eights, three eights, and then you co-own it with other people. It's like carpooling.
12:39 Brian Preston? Timeshare your house!
12:40 Speaker 12 People into a single home that's higher end. And so it alleviates demand in the mid-tier by aggregating eight people into the upper-priced tier. Most people can't afford a second home and many can hardly afford a first home. It's very expensive to own a second home because of underutilization. And most second homes are only used six weeks a year. Why is six weeks relevant? Well, that's one eighth of a home. I firmly believe that Picasso is good for communities, that the problem is empty second homes. Those homes are utilized, local services and restaurants and bars and wineries, you know, other services are used because the homes are highly utilized. Our typical home's whole home value is around four to eight million. So you divide that by eight to get your unit value. So 500,000 to a million dollars is what most people are paying for their Picasso or one eighth of the home.
13:21 Brian Preston? Yeah, but can we all just say timeshare?
13:23 Speaker 03 He just described timeshare.
13:24 Brian Preston? He just came up with a timeshare concept without saying timeshare, but for your luxury property.
13:30 Speaker 03 Hey, let me ask you a question, Brian. Do you really think that the problem in our real estate market right now is a bunch of empty second homes? Is that the problem? Is that, hey, for all of you young folks out there in between the age of 20 and 40 that are trying to get in your first home, I think the real, the real estate problem we have right now is empty second homes. And we need to work to figure out how we solve that problem.
13:52 Brian Preston? Well, when I'm trying to solve housing issues, it's not necessarily even for any secondary homes.
13:56 Speaker 13 You shouldn't need to pay them more, all right? There should be a different way to get employees to want to stay here. That kind of investment isn't necessary. No, we should invest. Excuse me? Who will give the people a retirement plan? One where we match the investments?
14:10 Speaker 11 Yeah, okay, cuz we could definitely afford matching.
14:13 Speaker 13 Not all at once.
14:15 Speaker 11 Go on.
14:15 Speaker 13 If they leave after one year, they lose everything. We match nothing. Year two, they lose most of it. Year four, perhaps enough just to make them hesitate. We don't forbid escape. We simply attach a price to it.
14:31 Speaker 11 Okay. And how long until their 401K plan will fully be vested?
14:35 Speaker 13 I say six, seven years? Actually, no, make it like three, four, to preserve the common section. After every bad day that they wanna leave, it becomes a calculation because leaving will feel like theft from themselves. Punishment disguised as a benefit.
14:53 Speaker 03 I don't think this is wrong. One of the things that I tell my people is, hey, I want you guys to be here for a long time and I'm going to give you more money to stay here longer. I'm gonna give you this much money if you stay here for six years. I'm gonna give you this much money if you stay here for this many years. It aligns the incentives. What the employee naturally wants is more money in their retirement account. And what the employer naturally wants is long-tenured employees. I don't think that's a bad thing. I think it mutually incentivizes behaviors to align expectations.
15:25 Brian Preston? Well, and if we, we actually went back to the room where this was all invented. There was this whole thing where we had defined benefit pension plans. And then they came up with like, hey, is there a way that we can do defined contribution? Where we're not actually on the hook for what happens 30, 40 years down the road? There's one. If you wanna get the cameras inside the room, be a flower on the wall. It was much nerdier than that.
15:50 Speaker 03 But I love that the internet is always rife with tons of financial information, but not all of it's great. But you know a great place where you can go get amazing financial information?
16:00 Brian Preston? What are you talking about? I'm headed out right after this to go pick up a new Rolex.
16:03 Speaker 03 Or that, yep. Or you could go to moneyguy.com/resources. Check out the plethora of free tools and deliverables we have out there because we really do believe that there is a better way to do money. We believe that you can do money better.
16:16 Brian Preston? With that, I'm your host, Brian, joined by Mr. Bo Money Guy. Out. Let me tell you a system that I have that's gonna blow your mind. Now hone in, lean in, because this is all you need to know.
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