Financial Advisors React to Outrageous Money Clips

Financing a Cheeseburger Combo (0:00)

Brian: Welcome to another react episode. The team has put together outrageous clips for us to look at.

Bo: Brian, I am so excited to check out today’s outrageousness. Let’s look at it.

Clip #1: Financing a Cheeseburger Combo (0:12)

[Clip] Okay, your total is $17.38.

[Clip] That can’t be right. I only ordered a cheeseburger combo.

[Clip] My mistake. I didn’t hear you say combo. $23.81.

[Clip] Goodness gracious.

[Clip] We do offer financing for any combo meal purchase.

[Clip] Oh, perfect.

[Clip] Credit score?

[Clip] 439.

[Clip] Not so perfect. Perhaps we can interest you in a hamburger with no ketchup.

[Clip] No, I need the combo. What if I get someone to cosign on a cheeseburger? What else am I supposed to do?

[Clip] Cash out your 401(k)?

[Clip] How do you think I used to pay for the chicken tender combos?

[Clip] Take out a HELOC on your home?

[Clip] I already did that for the chocolate shakes.

[Clip] Downgrade your car?

[Clip] I already downgraded to a PT Cruiser with 250,000 miles on it.

[Clip] Yeah, it’s not possible to downgrade more than that. You could trade it in.

[Clip] I’m not trading in my car for a cheeseburger.

[Clip] Then perhaps a hamburger with no ketchup or side of fries.

[Clip] Can you at least put some bacon on it?

[Clip] Bacon will be an extra $2.50.

Brian: Bo, do you remember when you bought your first greater than $20 cheeseburger?

Bo: No, I don’t. I mean, I know I have, but I do not remember my first. No.

Brian: Mine was in Beverly Hills, probably 2017, 2018. And by the way, they heck out of this hamburger. I paid $25 for this horrible hamburger in Beverly Hills. And what’s funny is I have noticed I’ve had a lot more $20 plus hamburgers at restaurants.

Bo: Yeah, I think obviously food inflation is a real thing. It’s gotten a lot more expensive. But I do think a lot of people find themselves in that same kind of thought process. “Oh well, I can’t really afford this thing. What opportunities do I have that I can borrow from my future self to pay for today?” Now this was obviously tongue in cheek, talking about a cheeseburger and making a combo. But how often do we see people say, “Okay, well, I can’t really afford the car, so I’m just going to finance it over 72 months. And I can’t really afford this, so I’m going to take out a home equity line to go on the vacation. I’m going to rack up credit card debt.” And when you end up financing, when you end up spreading out payments, all you are doing is robbing from your future self to pay for yourself today. You will never get ahead financially doing that. Don’t allow consumption decisions today to steal from your future self.

Clip #2: Using AI to Review Your Investment Portfolio (2:40)

[Clip] I uploaded my entire portfolio into Claude. It saved me $16,000 a year after tax. I said, “Tell me everything I’m doing wrong or any improvements.” It said one of the funds that I was holding was paying a slightly higher expense ratio than a near identical fund that I could buy from Vanguard. And it said, “If you sell this fund, you could realize this tax loss, move it into this other fund that has a lower fee, and that fee works out to $16,000 a year.”

Bo: Tax loss harvesting is a great thing to do inside a portfolio. If you have positions that are at a loss, you can sell those and capitalize on those losses. And you should always, and I would argue likely every single year, review the internal expense ratios of the funds that you’re invested in. Now, if you’re a low-cost index investor, you’re buying stuff that costs like 0.015%. You might not be changing that a whole lot. But if you do have actively managed funds or you have more expensive indices inside your portfolio, you should at least audit those every year to make sure you have the lowest cost share class available or the lowest cost alternative for that investment option.

Brian: Share class analysis is something we do for clients every year. This is something you can replicate. If you’re doing things like the S&P 500, they’re not all created equal. We’ve had to do analysis, and some exchange traded funds are not cheaper than something like Fidelity’s FXAIX. Did I get the ticker right?

Bo: Holy cow, look at that. Look at the memory on those ticker numbers. There are ways, and there are even zero-fee funds out there now. Did I screw that up? No. Ticker numbers. I’m with you.

Brian: Come on. I almost called it the ticker number. So let’s calm down. I didn’t get it right. I’m playing horseshoes here. But it is an important concept to understand. Look at those internal expense ratios. Make sure that you’re getting the lowest cost, but also pay attention to the tax costs of doing those transactions to fix it, because it might be something you just fix going forward. You don’t want to pay Uncle Sam for the tax of flipping it all over. But make sure when you do this, you know exactly what you’re doing, because what you don’t want to do is go in thinking you’re taking advantage of some tax losses and what you end up doing is creating wash sales by buying identical funds or materially similar funds instead of materially different funds. If you do that, you will not be able to take that loss. So you can’t just sell one S&P 500 index here and buy another S&P 500 index here. That would be a wash sale. You have to make sure that they are not nearly identical holdings in order to be able to capitalize on that alternative. For more on this kind of planning, check out our top tax planning strategies.

Clip #3: Looking Rich vs. Being Wealthy (5:14)

[Clip] Most of the people you think out there are very rich, they’re actually broke. They actually have no money. They actually have one foot on a banana peel and the other one on bankruptcy and they’re about to go under. Most people are just a paycheck or two away from being homeless. That’s what people don’t realize. Yet we get caught up in this world of seeing so many people with all this fancy stuff. All they have is a job. That is not wealth. And by the way, if you told me you’re making $10 million a year and you’re doing great, but you’re saving nothing and investing nothing, you’re not wealthy either. You just got a really good job. Wealthy people have assets. Wealthy people have cash flow. Wealthy people have more money coming in each month than they could ever spend on their personal expenses.

Brian: I love it. It is one of those things where it’s not the Lifestyles of the Rich and Famous. It’s not the Cribs. It’s not whatever the new generation thing is. It’s probably just going on Instagram and seeing everybody’s flex. That is so detached from reality. The reality is that you want your net worth to be kind of stealth, silent, and working in the background. And I remember at a young age, I figured out owning stuff was the secret, because you could build your army of dollars behind you so you could own your time that much sooner. That’s the true flex of life. At the end of the day, it’s much better to actually be wealthy than to just look wealthy.

Bo: If you want another great book to help you figure out how to do that the right way, I know where you’re going. Check out Millionaire Mission.

Brian: Millionaire Mission. I tell you not only about the Financial Order of Operations so you know what to do with your next dollar, but I give you the why, the motivation, and how money works. I wish somebody had handed this to me when I was at the beginning. But even for me, when I was figuring out how money works, I put a lot of tips in there, whether your first dollar invested or you’re at $10 million, there’s going to be a tip in there, because I can’t help it. I’m a nerdy tax guy.

Clip #4: Saving Money With DIY Car Repairs (7:03)

[Clip] I’m 23 with a goal to retire in 15 years. And here’s how I saved $1,000 today. Driving home, my brakes went out. Got home and found fluid leaking everywhere and realized all my brake lines were rusted bad. This was going to be expensive. Instead of taking it to a shop, I binged YouTube videos. Ended up replacing the entire brake system from brake lines to hoses, rotors, calipers, everything that needed it. I spent just over $1,000 on parts. At a shop in a high-cost area, this probably would have been over $2,000 easily. Before this, I had never changed brake lines, replaced calipers, or done any of this work. So I saved money and learned something new.

Brian: Okay. Yes. Know thyself. Know thyself. If you have a skill set where you are mechanical and you can pick that up and go binge watch YouTube videos, perhaps that makes tons of sense. However, if that is not your forte, if that’s not inside your skill set, I would be careful taking on something like taking apart your automobile, taking off the wheels, taking apart the rotors, taking apart the calipers, and assuming you can put it all back together. Because had that been me as a young man, I don’t know that I would have had that outcome. I think what would have happened is I would have taken my car completely apart and then I’d have to call the mechanic to come to my house, fix it, and I’d have to pay for a house call and pay for the repairs. So some things it makes sense to DIY and save money on 100%. But be careful DIYing the things where it could actually cost you more because you screw it up royally.

Bo: Some of my favorite YouTube content is watching people fix stuff. Literally yesterday I watched a gentleman change tires on a semi truck without a jack, and I was fascinated by it. I wanted to be friends with this guy, because you either know that you can do this stuff or you know that you probably should just be a YouTube viewer.

Brian: My brother and my father were mechanics. And that is a talent, a skill that I’m impressed with in anybody that is that good with their hands. People who are good at this tend to have it reflected in their life too. My dad could go buy a car with 200,000 miles on it, keep a mechanic’s bag, and he’s like MacGyver putting chewing gum and rubber bands on it and can get it home no matter what. Me, I’m just going to have to call a tow truck. So know yourself, know what you’re good at, and then lean into that skill set.

Clip #5: Keeping a Paid-Off Toyota Camry (9:17)

[Clip] I refuse to let car culture make me broke. When my mom gave me her old paid off 2009 Toyota Camry, it felt like the greatest honor was just bestowed upon me. I didn’t care what that car was. It’s paid off and free to drive. Me and Tiffany have been kicking it ever since, and I have no intention of replacing her until I’m dragging the bumper down the road. The car is paid off and I only pay around $850 a year for car insurance on it, and I have yet to have any major maintenance costs. Everything has been standard, like tires and brakes. If I were to buy the same car new right now with a standard 20% down, three-year loan at the current average rate, I’d be paying around $720 per month on my car payment and around $200 a month just for insurance. Now, don’t get me wrong, I love my Toyota. I’m saving for a nice Land Cruiser down the road because it’s gorgeous. But every mechanic and detailer I have brought it to over the last five years has said it looks immaculate inside and out and should last me at least another 100,000 miles. So why the heck would I upgrade?

Bo: Now, Brian, I’ve got to be honest. I pulled a Brian in that video. You know how sometimes we watch these videos and you see a thing and then your mind starts wandering around the thing and you forget to watch the video? I only caught the second half of that, because my wife does the same thing. She takes an iced coffee inside of a glass in the car, and she either has one of those metal straws or a glass straw, and she takes it in the car, and you know what happens when that coffee is gone? She literally sets it in the cup holder and it just dings. It just dings for the entire car ride.

Brian: I thought you meant that the straw was going to get gunky.

Bo: No, it just clings and clings and bangs and bangs the entire car ride. So the fact that she is able to do that and keep her sanity blows my mind.

Brian: God bless your wife for having sanity being married to you, because y’all hear one of those guys riding down the street doing everything he can to get the sound to go away when he hears any squeak or anything else going on. We’re going to pick y’all up for dinner and I’m going to tell her to bring her coffee and you’re just going to listen. Anyways, that was fantastic financial advice.

Bo: Yes. Why would you go buy a new car when you have a perfectly good car that only costs you $75 a month in maintenance? Good for you. You make 99% good decisions. Just the one bad decision was glass straws in a car. We have some content that we’re working on behind the scenes, not ready for public consumption just yet, but I’m trying to show small decisions you make in life that have huge results, and car purchases are the one, because I’m not going to call names, but they might be sitting near me. They upgraded their car even though they had a paid for one right out of college. And you’re not the only one. I’ve seen a gazillion people do it. But they just said it was 9 and a quarter percent. How can I say no? I will show you in some upcoming content where this one decision on the car you drive will cost you hundreds of thousands of dollars. And that’s the part where, if she can just keep living this life, her future self will have the reward of driving that Land Cruiser without any regrets, because hopefully she’s saving and investing and letting her army of dollar bills do the heavy lift.

Bo: Brian, I know you didn’t grow up wealthy, but I’m assuming you’ve never had to trade in a PT Cruiser for a bacon cheeseburger.

Sponsor: Monarch Money (12:26)

Brian: Well, I would make that trade, because the bacon alone is probably worth more than the PT Cruiser. But no, thankfully, I’ve never been so desperate for a combo meal.

Bo: Yeah, I’ve never had a ton of debt. But when my wife and I got married, we did have student loan debt. And by we, I mean she, obviously. It was a big relief when we finally got them knocked out. What I wish we would have had at the time was something like Monarch, because Monarch has this debt simulator that lets me put in all the balances, all the payments, and it shows me exactly when I can be debt free.

Brian: Yeah, and it actually is a really helpful tool because you can run different payment scenarios side by side and see how much sooner each one gets you to paying off your debt. And that’s powerful because so much of this stuff is behavioral. When you can actually see the finish line moving closer, it can really give you the motivation you need to keep going. And the sooner that debt’s gone, the sooner your army of dollar bills can start working for you instead of against you.

Bo: Getting debt behind us was an important part of our money story. And whatever chapter you’re in right now, even if it involves driving a beautiful PT Cruiser, Monarch can help you move forward. So write your own money story with Monarch. Use code moneyguy at monarch.com to get your first year of Monarch Core half off at just $50. That’s 50% off your first year at monarch.com with code moneyguy.

Clip #6: A Creator’s $40,000 Tax Surprise (13:46)

[Clip] In case you’re having a bad day, I owe the government over $10,000 and I need to pay it today. So let me explain what happened, why I owe the government so much money, and what you could do to prevent it from happening to you. So what I didn’t realize about being a content creator and making money off of it is that I’m considered a self-employed business, and my business is literally me being me, which is kind of weird to me because this doesn’t feel like a business. I’m just a guy who makes content and loves helping people with their finances. The government, it’s…

Brian: There are so many things going on in this video. Oh gosh. Let’s watch it one more time, but this time close your eyes and let’s just listen to it. Close your eyes. Let’s just listen and see if we get what he’s talking about.

Bo: Are we really going to do this?

Brian: Yeah. Close your eyes.

Bo: You’re not going to hit me or anything?

Brian: No. I’m going to close my eyes too. Close your eyes. Okay. All right. Now play it, guys. Our eyes are closed. Play it and let’s see if we can figure out what he’s saying.

[Clip] In case you’re having a bad day, I owe the government over $10,000 and I need to pay it today. So let me explain what happened, why I owe the government so much money, and what you could do to prevent it from happening to you. So what I didn’t realize about being a content creator and making money online is that I’m considered a self-employed business, and my business is literally me being me, which is kind of weird to me because this doesn’t feel like a business. I’m just a guy who makes content and loves helping people with their finances. The government considers it a business. And because this is all new to me, and I just started making money from social media two years ago, I didn’t realize I was required to make quarterly payments towards my taxes. So in April of this year, I paid over $40,000 in taxes overnight. You live and you learn, right?

Bo: Oh my god, he’s a financial coach and he doesn’t even understand taxes.

[Clip] Listen, I’m very good at saving money, but it doesn’t mean I know everything about money. I can be honest. I thought quarterly payments were optional, just to keep organized with your taxes throughout the year. But no, I learned the hard way last year that it is not an option. You must do it. If you don’t pay your quarterly taxes, you’re going to get penalized, which means you’re going to owe even more money. I think I owed like $1,500 in penalties from not paying my quarterly last year. Still, we learned from our mistakes and now we make our quarterly payments on time, because I don’t want the government to have more of my money. When I file my taxes next year, at least I’m not going to owe like $45,000 all in one day. And this is a wonderful lesson on why I live frugal, why I preach being responsible with your money and savings. Because when the taxes are due, I am not stressed and I have the money to pay them off. Thanks for watching.

Brian: Okay, let’s open our eyes.

Bo: You know what I’ve realized? He’s a successful content creator. Was it easier that way? Because if he had to pay $40,000 in income taxes, congratulations. A lot of people want to be content creators and influencer types, but very few actually make it. He’s done it, so congratulations.

Brian: As I was able to close my eyes and focus on that, it sounds like he did not make his quarterly estimated payments and he was not accounting for that. Because he didn’t pay on time, he got hit with a bunch of penalties as well. The first year you make big money, as long as you paid in greater than last year’s taxes, they give you a little bit of a safe harbor. So there was a disconnect somewhere there where he grossly underpaid what he should have, because the government does put in some protections there. But once you make over $150,000, you’re going to be paying some estimated tax payments, because the government wants their cut. And don’t forget, it’s not just the income taxes. It’s also self-employment taxes, which is Medicare and Social Security, 15.3%. Most employees, your employer pays half and then you pay half, that 7.65% on each side. With this, you pay it all, because welcome to the wonderful world of self-employment.

Clip #7: How Different Wealth Classes Teach Their Kids About Money (16:59)

[Clip] Hey, listen. You can’t take it with you when you gone. So we going to spend it. Hey, Popeyes on me.

[Clip] You need to get a job and work long hours for the next 40 years. Save as much money as you can and never spend.

[Clip] Harper, you need to start investing while you’re young. Here, I’ll help you get exposure to the S&P 500.

[Clip] You don’t need to get a job. You just need to learn how money works. So let’s play Monopoly.

[Clip] It’s not about what you know, it’s about who you know.

Bo: Okay, that’s probably true too.

[Clip] Hold on one second. Hey, Senator, how’s it going? The trick is to start a bank and loan money to governments and charge interest. That way, you basically own them.

Bo: All right. Well, until the last one, there were some nuggets.

Brian: You don’t think there’s a cabal out there running things?

Bo: I don’t know, Mr. Mask at night. We’ve all seen Eyes Wide Shut here. I think what was interesting is there were parts and pieces in each one of those that I think you can take away. Yes, you should get a job and work hard and try to earn, and you should put time in, but you should also save and invest. And it is also about figuring out how to make my money work harder than I can. How can I network well, both professionally and as an investor? I think there are parts and pieces in all of those. He had them separated by classes, but I don’t think you have to fall in one of those classes to be able to take that nugget from that class and apply it to your personal financial life.

Brian: Yeah, and I do agree that the Illuminati could fit up very well with some Star Wars cosplay. Little Kylo Ren action there. Do you see it? Do you even know who Kylo Ren is?

Bo: No.

Brian: Han Solo’s son. What? Oh gosh, I just ruined it all for you.

Bo: Okay. Well, now I’m not going to watch the movie, I guess.

Brian: Okay. God, you are such a Chad.

Clip #8: Dave Ramsey on Electric Cars and Car Financing (18:52)

[Clip] A new car loses 75% of its value in the first four years. Teslas, a four or five-year-old Tesla, look at how much they’ve gone down in value.

[Clip] Yeah. Buy that. Buy the four or five-year-old.

[Clip] No, don’t. The technology is a disaster.

[Clip] No, it’s not. You can’t even reboot them.

[Clip] What are you talking about? Anyway, I’m with Rachel on this.

[Clip] No. And listen, I am a Tesla owner.

[Clip] I know. George just gave that car away to get rid of it.

[Clip] What are you talking about? That is not true.

[Clip] Just trying to be funny. Electric cars. So, no. I hate the value.

[Clip] He hates electric cars.

[Clip] I do hate electric cars, but I hate the value drop. So if you’re going to go buy one, go buy a used one so you don’t take the hit. On any car. And don’t finance it. If you have to finance it, you can’t buy it. And it shouldn’t be more than half your annual income. And if you can’t pay cash, don’t buy it.

Bo: We agree with Dave that if you can pay cash for a car, that’s obviously the best way to pay. But a lot of people are not in the position where they can pay cash for a reliable automobile. And rather than going out and spending a couple thousand bucks on an absolute junker, we would rather you follow the 20/3/8 rule. You put 20% down, you finance it for no more than three years or 36 months, and it cannot exceed 8% of your monthly gross income. If you can buy a car that falls into those confines, you are going to prevent yourself from getting out ahead of your skis, but you’re still going to be in a reliable automobile that you can drive for the long term, whether that be an internal combustion automobile or even an electric automobile.

Brian: By the way, Dave is right. The depreciation is legit on these electric cars. So here’s what you want to try to do if you want to navigate this. Go look at the hardware number on especially Teslas. If you can get hardware for full self-driving and have somebody else take that depreciation, it’s a chef’s kiss on getting that full self-driving for a deal. And if you buy it from a private party, a lot of times it will transition to the new owner. As soon as you buy from a dealership, you lose that opportunity. But there are some hacks and tips so you can actually save money. Respect Dave Ramsey, but also respect George and Rachel.

Clip #9: Borrowing From Yourself and Forgiving the Debt (20:59)

[Clip] Whenever I run out of money, I lend myself money from the money that I have saved. So now technically I’m in debt to myself. But after two weeks I usually forgive myself, because I have an unspoken rule between myself and I that me and myself cannot get into problems. So I usually let it slide.

Bo: A lot of people build up an emergency fund. They use the emergency fund to fund purchases. “Hey, I need to go buy a car. I’m going on vacation.” Whatever. There’s nothing inherently wrong with doing that. But an emergency fund is there for a reason. It’s there so when an emergency happens, you are protected. So if you do pull from it, you need to prioritize putting money back in. It’s why we have the Financial Order of Operations. If you’re someone who’s rocking along in step five, six, or seven, but you have to go pull money out of your emergency fund to fund some sort of thing going on in your life, we want you to go back to step four, fully build up that emergency fund so you can get back on the wealth building train as fast as possible.

Brian: Yeah. But here’s what’s exciting. If you can actually practice discipline, living on less than you make, where it actually does become a habit of saving and building, yes, emergency reserves are two steps, steps one and four. But man oh man, does magical stuff happen when that savings turns into investments with tax-free growth in step five. When you get into maxing out retirement, and of course who wants to skip out on step number two, get that free money from your employer. That’s when you really see the magic of your army of dollar bills growing.

Outro (22:19)

Brian: Most Americans are not very good at saving. They’re all about the consumption side of things. And that’s why I’m here to tell you there’s a better way to do money. If you go to moneyguy.com/resources, we will literally load you up with free resources, tools, calculators, and all the things you need to accelerate your wealth building journey and understand how your money works. I’m your host Brian, joined by Mr. Bo. Money Guy Team, out.