Pod Insights Money Guy Show Financial Advisors React to Unhinged Money Advice on TikTok! About this episode Brian and Bo take on some of the most unhinged financial advice we've found on TikTok!
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Transcript Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.
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0:30 Speaker 01 It's getting chilly outside. But you know what that means? It's time to cozy up with Panera Bread. Let's get toasty, cheesy. Oh, hello, broccoli cheddar soup in a bread bowl. How about melty? Okay, Chipotle Chicken Avo Melt. It's dipping bread and soupy goodness season. Oh yeah, we are so back. It's Panera season. Order now.
0:58 Brian Preston? Hey, podcast family, you have to know, we are known kind of on the YouTube world as the React channel.
1:05 Speaker 03 That's right, yep.
1:06 Brian Preston? The Money Guy Show. But we don't want you to miss out on any of the fun, so we have something special for you today.
1:12 Speaker 03 We are so excited. We are gonna actually release for you the same audio that we do on our React videos. Now, if you've not checked out the React videos, go to youtube.com/moneyguyshow and check them out. But if you just want to know what we're getting into from the audio side, make sure you listen up.
1:28 Brian Preston? It's gonna be fun.
1:34 Speaker 04 I took out two loans to get here today. I don't even have money for a hotel. Give him a big hand, guys.
1:40 Brian Preston? Give him a big hand.
1:45 Brian Preston? Hey, hey, hey, Money Guy family, we got more reacts. Let's see what the teams put together.
1:51 Speaker 03 Brian, I am so excited. I love seeing what the internet has out there that we get to react to. So with that, let's dive right in.
1:58 Speaker 05 I know, I just got into Tacoma, but I figured out a way to skip three months.
2:01 Speaker 03 Add sound system, this is you. It says updated.
2:04 Speaker 06 Payment information skip up to three payments. The letter basically says that I can refinance my loan somehow, which means buying it again. I don't know. Now, instead of having 22%, they are offering me 18%.
2:16 Brian Preston? Oh, gosh.
2:16 Speaker 06 Now, I don't know the national averages or anything like that, but I think 18% should be good.
2:21 Brian Preston? No, that's the interest he pays on $77,000?
2:24 Speaker 03 He said my credit card is 30.
2:26 Speaker 06 System in the Toyota. For some reason, the speaker stuck. There's no low end, anything at all.
2:30 Speaker 03 I can refinance this loan, and when I do that, I get to skip three payments. If I get to skip those three payments, then I can put a sound system in my Tacoma. And Brian, we know this. When it comes to cars, you gotta have a good sound system in it, right? It's not even worth driving if you don't put a good sound system in it, right?
2:45 Brian Preston? I think my 16-year-old self would agree with him, because I was one of those people that had $2,000 of sound system in a
2:51 Speaker 03 $1,500 car.
2:52 Brian Preston? $1,000 car. But it is, man, what in the world? You realize those three months, he's paying that 18% or 20% interest on that. Of course, they're trying to basically put straw and cover up this trap as much as possible because they want him to fall into it. That is free money for them and a trap for him. Why would you turn compounding interest against you?
3:13 Speaker 03 When it comes to buying cars, we do not want you to skip payments. We want you to follow 238. 20% down, don't finance for any more than 36 months. You have to make sure your total payment does not exceed 8% of your monthly gross income. And yes, 18% on an auto loan counts as high interest debt.
3:33 Speaker 07 Put money in a 401k, put money in an IRA, and you're like, yes.
3:35 Speaker 03 I don't hate it.
3:36 Speaker 07 This will be what I need for retirement. But no one's doing the math. And here's what the math says. The 30-year average on the 401k, the 30-year average in the IRA, do you know roughly, over 30 years, it's 5%?
3:47 Brian Preston? Oh, give me a break.
3:48 Speaker 07 The reason why that's poop is because you take
3:50 Brian Preston? Is it cash?
3:50 Speaker 07 $50,000. Write this number down. Take, with the passage of time, take 50 grand and ask what happens to it in a 401k over 20 years. It triples. It becomes $160,000.
4:01 Brian Preston? How about doubling that rate of return?
4:03 Speaker 07 Income at $94,000.
4:04 Speaker 03 How about you match?
4:05 Speaker 07 Which means that at retirement, you've saved two years' worth of money. So after you have cut your expenses in half, you can maybe go four years before It's all dried up. It's poop again. We think that it's a risk free event, but it's the greatest risk of all because we know how the story ends for 99.9% of people.
4:22 Speaker 03 Chris, I'm a very agreeable person, but where on earth do you get your information from? The average return in a 401k is 5%. Okay, maybe if you're following like the Dalbar study to see what the average investor does, but if you just go into your 401k and you just buy a low-cost index fund, we know that over the past, what, 50, 60, 70 years, the S and P 500 is annually life something like 11% per year. So the fact that you're saying that 401ks are a lot is just, it's just made up. That's not the way that it actually works.
4:55 Brian Preston? I got one better. How about if you have an employer that's a dollar for dollar match? How about a guaranteed 100% rate of return, Chris? That's, that's false. You can tell Chris is selling some other product. Investing your 401k, there's a reason in our financial order of operations, it's step number two, because nobody's giving you 50 to 100% guaranteed rate of return. It's all because your employer is being incentivized by our government to go ahead and pay it forward, get you a retirement, take advantage of that. 19-year-old millionaire made $8,000 in two hours.
5:26 Speaker 06 The chart is moving. Move it to chart.
5:27 Brian Preston? Oh, just follow the chart.
5:29 Speaker 06 Oh my God, it's still ripping.
5:30 Brian Preston? Still ripping. While he's eating, what is he eating? A burrito?
5:33 Speaker 06 Oh, look, 8.6% K. That's literally almost $9,000, guys. I'm literally making that right now. My position's up 54%, and I bought this two hours ago.
5:42 Speaker 06 In just two hours. And I've had crazier ones where they go up 500% in 30 minutes.
5:46 Brian Preston? Yeah, because it always goes up. Trees grow to heaven.
5:48 Speaker 03 The way that it works. If this is what you believe investing is, and you're watching TikTok, I am so sorry to tell you that you've been horribly misinformed. Investing is not something where you pull out your phone and you're watching the ticker and it's going up 500% in 30 minutes. That's just not the way that it works. What I would love to do is I'd love to go see this kid's portfolio. I'd love to see it over the last 12, 18, 24, 36 months and see realistically how much money has this guy actually made investing. And I bet it's not what he's putting on the highlight reel.
6:19 Brian Preston? Look, you can, you can get lucky.
6:20 Speaker 03 Sure.
6:21 Brian Preston? And hit a lick.
6:22 Speaker 03 Just like in a casino.
6:23 Brian Preston? I mean, you can totally get lucky. But this is not actually what investing is. Investing is actually where you're buying a portion of the economy, buy an index fund and be a part of all this innovation, all the cool stuff that's going on around us. This is speculating, this is gambling. I even question, is he really a 19, 18, 19-year-old millionaire? Or did he rent somebody's car or drive somebody's car? And then he's eating his burrito and creating social media content.
6:50 Speaker 04 I took out two loans to get here today. I don't even have money for a hotel.
6:54 Speaker 06 Give him a big hand, guys.
6:56 Brian Preston? Give him a big hand.
6:58 Speaker 06 You need to pick up a check. I would tell you, before today is over, you should get somebody to give you 500 bucks.
7:05 Brian Preston? Who's that?
7:06 Speaker 03 Grant, give him 500 bucks.
7:08 Brian Preston? I bet Grant does. Is Grant gonna give him 500?
7:10 Speaker 04 Somebody asked, what do I do?
7:11 Speaker 06 Hold on, hold on, hold on, bro. Bro, do not talk through the clothes.
7:17 Speaker 03 People just hint.
7:21 Brian Preston? It's like conference panhandling.
7:24 Speaker 03 What are we, what are we learning here?
7:27 Speaker 06 And I just gave him the most valuable thing in the world, dude. Attention.
7:33 Brian Preston? You know what? Grant could take that on the road. Go to your, you could hire Grant for your wedding. And you know how you do those dances where you give money at a dance? Grant could be out there with the DJ, kinda hyping the audience, getting more money for the bride and groom.
7:49 Speaker 03 Or like instead of, you know, you get in the air tunnel where all the cash? I don't, I don't even know what, I don't even know what the point of that, that video was. You need to get someone to give you $500 check today.
7:59 Brian Preston? That's the power of peer pressure is what that is. Is because Grant's at one of his conferences and he primes the pump. Somebody gives and they're like, well, I'll give him five bucks. I get to stand up and Grant's gonna notice me? I'll give another five bucks. So you can't duplicate this.
8:11 Speaker 03 That's what I was gonna say.
8:12 Brian Preston? When you hear about people who supposedly do, remember, I'm old. So the envelope thing where you send a chain letter and you tell everybody to give you like a dollar and you're supposed to go get a million dollars by getting all these people to send you a dollar?
8:26 Speaker 03 It never worked.
8:26 Brian Preston? It doesn't work.
8:27 Speaker 03 It never worked.
8:28 Brian Preston? The biggest mistake young entrepreneurs make is having a family to go back to at the end of the day. What? It's, it's just a waste of time. I run a company with 6,000 employees and over the past three years, Wait a minute, okay, I'm catching on. I've been doctoring family psychology and weaponized it into subconsciously coercing each and every one of my employees into divorcing their significant other. At some point he's gonna go, psych. I had to take it global. In 2019, the divorce rate was 40%.
8:55 Speaker 03 Now it's 50.
8:58 Speaker 03 I've been hard at work. I am sad if people think that's what actual entrepreneurship looks like and what being the boss looks like, because I think if you work for a company that is fostering that sort of environment, they are doing it wrong. And there is some truth in that. Some people do get lost in their careers and they get lost pursuing something that what they're going to find when they actually get it. If they're pursuing wealth, or money, or status, or prestige, when you get there, you're going to find that it's pretty empty. So if you can enjoy the journey, but recognize there are things that matter more than money, and money is nothing more than a tool that allows you to focus on the things that you really care about, I think you're going to find that it's a much more enjoyable journey,
9:41 Speaker 03 and the destination, the finish line, becomes much more fulfilling.
9:45 Brian Preston? I do want to be clear. I don't want anybody to be misled. Doing big things in life will require sacrifice to some degree.
9:53 Speaker 03 Sure, of course.
9:54 Brian Preston? Because if it was easy, everybody would do it. But I would tell you, I think a lot of times, it can be done in much more incremental, digestible, small decisions that stacked on top of each other, that also will allow you, if you do it right, you should have a vision of where you want to be. And so that way, the parts that may be unhealthy in the beginning, like when you are starting a new venture and you're having to work extra hours because nobody believes but you believe, but then at some point, you got to know where success lies and what the why is, so you come off the exit ramp of that and actually control and own your time.
10:27 Speaker 03 That's right.
10:28 Brian Preston? It's all worth it.
10:30 Speaker 03 Yep.
10:31 Brian Preston? But if you go into, I know he was trying to be funny with that, throwing out real stats about the increase of divorce rates, but it's all back to the point of, are you purposeful with how you use your most valuable resource, which is your time?
10:44 Speaker 05 How much did you pay for the first rental?
10:46 Speaker 06 I paid $100,000.
10:47 Speaker 05 And what did the rehab cost for that?
10:48 Speaker 06 $200,000.
10:50 Speaker 05 And what's the ARV for that?
10:51 Speaker 06 $220,000.
10:53 Speaker 05 Wow. What kind of cash flow are you getting from that one first rental property?
10:56 Speaker 06 $700 to $800 a month.
10:57 Speaker 05 Where did you get the money to buy your first rental?
11:00 Speaker 06 I used private money.
11:02 Speaker 05 Private money lending firm.
11:03 Speaker 06 My parents, which gave me 10% interest rates.
11:05 Speaker 05 Yes, kids, you're smart. You have done how many transactions before?
11:09 Speaker 06 I've done five.
11:10 Speaker 05 Tell me about the transaction.
11:11 Speaker 06 I have done one wholesale.
11:13 Brian Preston? This is a great estate planning technique here. Just put everything in kids' names.
11:17 Speaker 06 Four rental properties.
11:18 Speaker 05 What does your mom and dad do for a living?
11:20 Speaker 06 They are both real estate investors.
11:21 Speaker 05 What is one tip that your immediate parents?
11:24 Brian Preston? I could save you a lot of time on this video.
11:25 Speaker 06 Real estate investing is one of the best things you could do because all of the leverage you could use and all the passive income that you could get.
11:31 Brian Preston? The reason that he can do this at such a young age is that he's got this huge safety net sitting underneath him called very successful parents.
11:39 Speaker 03 Who are also in the same industry.
11:41 Brian Preston? Most of us, the reason you can't dabble with leverage until you get to step eight of the financial order of operations is because it is chainsaw dangerous. You know, it is one of those things, if you don't understand the temptation, but also the dangers of leverage, you're doing it wrong. He's got the safety net that takes out all the risk that allows him to do it way ahead of schedule. That's not a planning technique. That's just, he's fortunate that he's in a successful family.
12:11 Speaker 03 You know, this is a great reminder that oftentimes when we see other people's financial success, we don't have the full story and context matters. You may have heard about this 12-year-old kid who has this rental portfolio and is making all this money. That sounds amazing. Until you find out that the parents are the ones that loaned him the money, the parents are the ones that are sourcing the deals, the parents are the ones that are helping him do it. Is it really his business or the parents' business? The context matters. So when you see a neighbor or a friend or someone else in your financial life and you say, man, how did they do that? Or how are they, you don't know the rest of the story. You don't know the other behind the scenes things that are happening. Fortunately or unfortunately, most times, building wealth is a slow and steady game. You're not supposed to have hundreds of thousands of dollars at 12 or 13 years old.
12:56 Brian Preston? Look, I believe that villains and victims don't win. You have to be the hero of your own story. But I tell you, as two guys coming from humble beginnings, don't watch this and just assume it's only the wealthy kids that get the opportunity. Go learn the skill sets. Learn those small decisions you can. Make that can build your great big beautiful tomorrow and actually start the process. That's the thing. If you look at the stats that 80% plus of millionaires are typically first generation. There's still lots of opportunity out there for you. Don't let content like this scare you thinking it's only something that the silver spoon kids get. You can do this too. We've done it and we try to share that when we do money. You got content.
13:36 Speaker 01 This is the start of a brand new series where I spend 30 minutes a day teaching my incredible daughters the skill of day trading.
13:43 Brian Preston? Oh goodness gracious. We've done something with her before.
13:47 Speaker 01 Profitable and taking profitable.
13:50 Brian Preston? How to teach your kids to gamble?
13:54 Brian Preston? Let's go.
13:55 Speaker 03 Okay, this has to be, this is far, like it's not legit. I gotta, I need to know, is this true? Is this, are you really, is this really what you're doing?
14:02 Brian Preston? It is social media clickbait. It has to be.
14:06 Speaker 03 Here's what I think is wonderful. If this mom was saying, you know what? I'm going to teach my kids at a very early age about investing and about deferred gratification and about compound interest and about investing in other companies and about stock ownership. I think that those things are wonderful and man, what a head start these kids are going to have. But if she's legitimately trying to teach them how to day trade, you might, well, I'm not, there's a lot of other horrible things you could teach them as well, that I would not think are going to serve them well later in life. It's gotta be a joke, right? She's joking. It's farce. It's silly. She's.
14:38 Brian Preston? This is the next evolution. You know, every high school in America has this like stock picking contest they do in high school and they even have like, I know in the state of Georgia where we're both from, they even have like this big dinner where you celebrate on the state level for all the winners from high school. She's just amplified this. Look, real investing, instead of trying to pick the winners and losers by buying individual stocks or day trading, just buy into the economy. This whole pie is growing through innovation, through technology and all kinds of awesome stuff. You don't have to be lucky to be successful.
15:13 Speaker 06 Be careful with this money affirmation because it actually really works. I always have more money than I need. I cannot help but to attract a lot of money into my life. Because I am a lender and not a borrower. I am a money magnet and money is always attracted to me at all times. Money is my birthright. Repeat this three times a day for the next seven days and then come back here and let me know the result.
15:37 Speaker 03 I am a money magnet. I don't know that that's gonna work. Now, look, I love, I'm all for positive self-talk. And we know that the majority of folks out there classify themselves as pessimists. And yet, when we do our survey of millionaires, every year, we find that they classify themselves as optimists. But being optimistic and chanting a money mantra, saying that I'm a money magnet are not the exact same thing.
16:05 Brian Preston? Look, it's not magic. What creates success is when you start believing on what you can do and what these small decisions are and how they stack up. And then if you actually start taking the action, it is amazing when the subconscious connects with your physical acts and actually starts making things happen. But it's not a mantra. It's not these magical words. It's you actually taking action, taking those small steps of action. Also, starting to believe it and then waking up that invisible hand inside your brain that's even working while you're asleep. That's where optimism and success lies, not in some mystical thing that you chant to yourself from time to time. I like positive self-speak. Controlling that inner voice is definitely a powerful thing.
16:48 Brian Preston? But don't fall prey to somebody who's telling you this, saying it in these specific nine or 10 words is going to do it for you. I think that's a trap and that's not actually helping you get better.
17:01 Speaker 03 Hey, if you want to be a money magnet, make sure you go to moneyguy.com/resources. Check out all the free resources we have out there that can help you do money better.
17:11 Brian Preston? Yeah, I love it because money is only a tool and we want you to live your best life in abundance. I'm your host, Brian Preston, Mr. Bo Hanson, Money Guy team, out.
17:21 Speaker 06 The Money Guy Show is hosted by Brian Preston. Abound Wealth Management is a registered investment advisory firm regulated by the Securities and Exchange Commission in accordance and compliance with the securities laws and regulations. Abound Wealth Management does not render or offer to render personalized investment or tax advice through The Money Guy Show. The information provided is for informational purposes only and does not constitute financial, tax, investment, or legal advice.
17:49 Speaker 01 It's getting chilly outside. But you know what that means?
17:56 Speaker 01 It's time to cozy up with Panera Bread. Let's get toasty, cheesy. Oh, hello broccoli cheddar soup in a red bowl. How about melty? Okay, Chipotle chicken avo melt. It's dipping bread and soupy goodness season. Oh yeah, we are so back. It's Panera season. Order now.
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