Financial Advisors React to INSANE Money Clips

Introduction: Insane Money Clips (0:00)

Brian: Y’all ready to get wild? Let’s see some insane money clips.

Bo: I am so excited because whenever the team says insane, we know it’s going to be good.

Clip #1: “I’m 27 and I Have No Savings” (0:28)

[Clip] How old are you and how much do you have in savings?

[Clip] I’m 27 and I have no savings.

[Clip] And what’s holding you back from saving right now?

[Clip] I think that money is an idea that allows people to do what they want with their time. And I think most people stress about the value that they have at a specific time in their life. But I like to think about myself as less of a member of society and more of a member of nature and the universe.

Bo: Okay, so that’s a perspective. You might have a different perspective, a different idea. But even if you do think of yourself as a member of nature and the universe, money for most people is still a necessity in order to do the things that we value. Maybe one of the things you value is being in nature or spending time having activities and making memories in the universe. And to do those things most often, you have to have some sort of money. If you want to be able to do those things in the future, you probably ought to be saving some money today.

Brian: First of all, I can tell that is a very small inseam on those shorts. They are short shorts. And I can tell you as a person that grew up with everybody wearing cut-off jean shorts because that’s what all my uncles wore when they came over to go in the swimming pool — jean shorts can’t go in swimming pools because they can mess up your pumps. So you just got to be careful. But the other thing I was going to say is look, for somebody who loves nature and wants to be part of the universe and is in his 20s, this is the ideal time to just take a little bit of today to build that great big beautiful tomorrow. Utilize that most powerful resource he has, which is time. Put that money to work. Your future self will thank you, and you’ll still care about the universe.

Clip #2: “It’s Never a Spending Issue, It’s an Earning Issue” (2:07)

[Clip] Only broke people would disagree with me on this, but I have a carefree spending habit towards money. A lot of times people will try to criticize my spending habits and say, “Dude, you could save this much a day, or if you cut this out, you could save this much money at the end of the year.” Listen, I don’t care. I got motion and movement. I’m not looking to penny pinch because the moment that I do, I am now controlled by money and I am controlled by dollars. I am going to live my life the way that I want to and I’m going to earn the money to exceed the spending. It’s never a spending issue. It’s an earning issue. And honestly, adopting this mindset 10x’d my income.

Bo: It works. Look, he’s actually laying out something fairly noble – that money itself should not be the goal. The goal should not be to stack money just to have money, but rather to use your money to do the things that you want to do and focus on the experiences you want to take advantage of. Now, where that falls apart is this: yes, so long as you earn more than you spend, you’re going to be okay. But if you never save and never stack anything for the future, that means for the rest of your life, well into your old age, you are always going to have to earn more than you spend. And most people, as they get into the twilight years, want to work less and have more free time and not be controlled by having to show up to earn a wage. If you subscribe to this philosophy, you will never break that cycle.

Brian: There is a case to be made that you can live this buck wild life and the algorithms will reward you and you’ll make millions of dollars. We know a few of those people and it can work. But I’ve got to be honest with you, they’re the outliers. They’re the statistical anomaly. And he might very well be one because I could tell he was sitting in some type of fancy car based on the stitching of the leather. He’s building this life off of his opulent lifestyle, and it might be working for him. But to try to replicate this in your own life and expect the same dividends or for your life to turn out to be the best version of itself is a fool’s errand.

Clip #3: The Penny Scheme (4:07)

[Clip] If you have one penny and melt it down, the copper is worth 4 cents of metal. That means with just $1, you can trade it for 100 pennies, melt those, and you’ve got $4 worth of copper. Take that $4, swap it for 400 pennies, and now you’ve got $16. Every time you repeat it, your money multiplies by four until finally, on the 10th trade, you end up with $1 million and a lifetime in prison.

Bo: There is truth in this – the cost of creating a penny was more than one cent, which is why they’ve said they’re not going to create any more pennies. They’re done producing them. The idea here is that this might be a get-rich scheme, a way to beat and break the system. I don’t know that you would be able to extrapolate this out into millions and millions of dollars. And they are right – if you destroy money, I believe that is against the law and it could likely end you up in jail. Maybe?

Brian: Yeah.

Clip #4: Financial Literacy vs. the School System (5:07)

[Clip] Do you know how to do your taxes? No. Do you know how to build credit? Mm-mm. Do you know what a 401(k) is? Absolutely not. Do you know how to mail a check? Not a clue. Do you know how to balance a checkbook? Nope. Do you know what a mortgage is? No. Do you know what the powerhouse of the cell is? The mitochondria. What’s the Pythagorean theorem? A squared plus B squared equals C squared. Do you know what moon phase this is? Waxing crescent. Do you know the underlying theme of Of Mice and Men? The impossibility of the American dream.

Brian: You know, this makes a solid point.

Bo: We do have a problem. A lot of people do not have the basic fundamental financial skills when they graduate, and yet there are a lot of things that we do know, like the powerhouse of a cell, the mitochondria.

Brian: We were talking about this the other day. Do you think the system is rigged against people?

Bo: Do we think that the system wants people to stay uneducated because it’s more profitable for that to be the case?

Clip #5: 10K in 60 Days – How Did It Go? (6:10)

[Clip] Day 60 out of 60 of making 10K in 60 days. So the 60 days have now finished and my final total is $8,380. That’s from January 1st, so not exactly 60 days, about 4 months. That’s 2.7K lost in trading and about 5K lost in ecommerce. But I also spent $5K on courses. So without the course fees, I only lost about $3,400. But yeah, I did not make 10K in 60 days. So now we’re going to continue and see how long it takes me to make 10K.

Brian: I would love to know what the S&P did during the same period. My expectations aren’t too high.

Bo: A lot of people want to tell you, “Here’s how you can beat the system and make all this money.” And it just doesn’t work that way. If something sounds too good to be true, if there’s some automatic money to be made based on some trading strategy, some option strategy, some ecommerce platform you’re going to subscribe to – that’s just not the way that wealth is built. I feel bad for this guy, but I love that he made this video saying, “I did what the internet told me and it didn’t work out.” But what I am nervous about is that he said he’s going to keep going.

Brian: Hey, you know what? Put the shovel down. Sometimes it’s better to just quit digging and try to change course. That’s what I would do. Instead of trying to beat the market, let’s be the market. Understand the power of index funds and the concept of the law of accelerating returns, meaning that things are actually speeding up. Innovation is making it where you can make even more money. So don’t waste your effort, your resources, your money, or your time – the most powerful of all three. Focus on being the market by being an index investor.

Clip #6: Getting a Mortgage vs. Getting Student Loans (8:18)

[Clip] So what is your combined household income?

[Clip] Between me and my wife, we make about $150,000 per year.

[Clip] Poverty line.

Brian: What?

[Clip] And how much do you have in debt?

[Clip] We have about $90K in student loan debt.

[Clip] Oof.

[Clip] Didn’t have to react like that.

[Clip] Yeah, that’s just a lot of money. And your credit score?

[Clip] 700.

[Clip] Great. So good news — looks like we’re going to be able to approve you for a loan of $210,000.

[Clip] That’s all? Are you serious? That’s not really enough. We need multiple bedrooms. I don’t even think that amount of money would get us a bedroom.

[Clip] We can look into alternative options. Might I suggest divorcing and finding a richer spouse?

[Clip] No, I’m not going to do that.

[Clip] All right. Well, good luck renting the rest of your life, nerd.

[Clip] How much income do you currently have?

[Clip] $0. I’m 17.

[Clip] How about liquidable assets?

[Clip] Zero. I’m 17.

[Clip] How much money do you think you’ll probably make someday?

[Clip] Oh, I’d say a mill and a half per year easily.

[Clip] See, that’s great. We’ll just use that. What do you think you’re going to do for a career?

[Clip] I don’t know. I haven’t thought that far ahead.

[Clip] Awesome. So I have some pretty good news. We are going to be able to approve you for a loan of $250,000.

[Clip] Yes! I am sure this will not financially ruin the next 20 years of my life.

Bo: It’s so true. He’s talking about the difference in how difficult it is to get a mortgage and prove income versus how easy it has been for the last 20 to 25 years for students at 17, 18, 19 years old to rack up tens if not hundreds of thousands in debt that I would argue is unjustifiable. They’re spot on. It’s a problem.

Brian: I feel like next time I go on Netflix under the thriller category, we ought to have that because do you see the twist there? I thought I was like, “Wow, that is brilliant. What a great teachable concept.” And it’s true. Y’all know that education, if you read any of the content that Bo and I create or read my book Millionaire Mission, you know that I think education is noble. Yet somehow all that goodwill has been squandered by a lot of these institutions and banks to just make it a trap. Bo, how many people care when they see your diploma how many years you spent at that school?

Bo: It does not say how many years you spent. It only says where you finished. So as long as your diploma is from that school, it doesn’t matter if you did community college, joint enrollment, or AP. It just matters where you finish.

Brian: Don’t let colleges sell you a product that’s not going to have a return on investment. Be an active student who knows how your education is going to pay it forward.

Bo: Now I have a question. You said there was a twist. Did you not see at the very beginning it said the difference in getting a mortgage versus getting student loans? It kind of led with that.

Brian: Oh, did it lead with that?

Bo: It was the very start. It was the very first thing. So, you really were surprised when it cuz I was like you’re like talking about I was like, “Yeah, it’s it said it’s You know what?

Brian: My elementary teachers are right now watching this saying “There it is. There’s that that reading comprehension that I told I put on his report card back in the third grade. Watch that reading comprehension.” I fell right into the trap. He foreshadowed.

Clip #7: Wealth Building by Decade (11:54)

[Clip] Your 20s: you may not generate a ton of wealth in your 20s, but that is when you need to be taking the biggest risks and taking the most shots. You have nothing to lose in your 20s. Your 30s: you can really start to generate wealth in your 30s, but if you slacked off in your 20s, it’s going to be very difficult. Your 30s are reliant on your 20s. Your 40s: you have a lot of knowledge, relationships, and experience, and your 40s are the beginning of your highest income potential years. Your 50s: just like your 40s, your 50s are also your prime earning years, but you’re not yet to the age where you have to start thinking about taking your chips off the table. Your 60s: you do not want to be building wealth in your 60s. You want to be preserving and growing the wealth that you built earlier in your life.

Bo: Here’s the only thing – I don’t know what S stands for. I’ve got A, B, C, D, E, F. I want to know what S stands for, but I’m assuming it’s the best, right? Superior. I think that’s what it is.

Brian: Supercalifragilistic expialidocious.

Bo: I would argue that in your 20s, it’s not about taking the biggest risks and being the most aggressive – although that’s a great time to do it. I would say your 20s are most important for just starting to do something. Because even if you don’t take a big risk or do something crazy, if you can just start saving a little bit in your 20s, that is even more important than trying to catch fire in your 30s, 40s, or 50s. So I think that’s the way he laid it out, but I’m not exactly sure because of the supercalifragilistic category.

Brian: Man oh man. And by the way, I get that excited about people in their 20s because if you just start buying index funds in your 20s, man oh man is your future self going to be so happy.

Clip #8: Retirement Savings Benchmarks (13:46)

[Clip] To be in the top 50% of retirement savings, you need to have $13,000 saved. To be in the top 25%, you need $122,000. To be in the top 10%, $460,000. And to be in the top 1%, you need a total nest egg of $2,290,000. Now, if you’ve been investing but you’re still nowhere near those numbers, don’t worry. It takes time for compound growth to do its thing. You don’t need to invest $2 million to have $2 million. You just need time to let compound growth work its magic.

Brian: That wasn’t insane. It’s insane how much growth it creates.

Bo: All the numbers were right – top 50%, 25%, 10%, 1%. But does it matter if you are in those percentages? No. What matters is how much you need to be able to live the life that you want to live on your terms. That number for you may put you in the top 1% of net worth. Or you may be someone who has $500,000 to $600,000 — not in the top 1%, but because of the lifestyle you want to live and the sources of income you have, that might be enough. So be careful just chasing the scoreboard, because that may not be what matters for your financial situation.

Brian: Don’t sleep on the fact that your money can work harder than you can with your back, your brain, and your hands. But you’ve got to do something and take action.

Clip #9: The Private Chef Tax Deduction (15:17)

[Clip] I can’t write off a private chef, but if I invite somebody over every single night to have business meetings with me and I hire a private chef to cook the meal, I can write off the private chef and the food. This is how I’m able to afford having that private chef every single month inside of my house making me and my wife meals, along with my friends, family members, and my business clients who also — some of my family members — sit on my board of directors.

Brian: Oh man. Look, niece, you need to be more deductible. Pass that lettuce over here so I can put some ranch dressing on it. Did you fund your Roth? All right, deductible. I made it happen. That’s how it works. Uncle, what do you think you ought to be doing with your next dollar? All right, now pass those potatoes. That made that deductible. Wife, what do you know about an employee stock purchase plan? All right, you answered that. You’re deductible too.

Bo: Everything is deductible until you get caught. I would argue Carlton has taken some aggressive stances here.

Brian: Libertiessssss.

Bo: I just don’t know that having your friends and your family and your spouse in your home with a private chef — I would have a hard time explaining to an IRS agent that these are legitimate business meetings and these should legitimately be deductible. If you are going to try to take this advice and implement it in your life, you better be ready and prepared to defend that to the IRS. I don’t know if you want to do that.

Brian: If you’ve ever represented clients before the IRS, it is scary. I have literally seen grown men cry because they were too cheap to pay me to represent them. Be careful what you think you can get away with, because the IRS can take your stuff. You need to be on solid ground when you take deductions. Look, there’s nothing wrong with this — our government highly encourages you to maximize your deductions, but they don’t want you to cheat. How did they get Al Capone? They found him cheating on his taxes. So don’t be Al Capone.

The Better Way to Do Money (17:37)

Bo: We believe that there is a better way to do money. You don’t have to follow insane advice or carry out crazy strategies. If you can understand the three ingredients of wealth creation — discipline, margin or money, and time – and you can put those to work, then you can build a great big beautiful tomorrow.

Brian: There is a better way to do money, and we are loading people up with what we call the abundance cycle. We give you all the tools, all the calculators, and all the resources you need at moneyguy.com/resources. And when you reach success, you’ll remember who planted that little apple seed that has turned into the huge tree generating so much fruit that you’re living your best life. I’m your host, Brian, joined by Mr. Bo, Money Guy, out.