Financial Advisors React to RIDICULOUS Money Clips

Introduction – Content Crew Delivers (0:00)

Brian: Looky looky here. Content crew has been busy with some ridiculous financial content.

Bo: Brian, I am so excited to see what the internet has in store for us today.

Turn $60 into $1,000 (0:10)

Video Clip: Yeah, I’m going to show you 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.

Brian: Go to your job. Go to your job. I bet.

Video Clip: And now all you got to do is wait for your truck or whatever vehicle you’re driving to fill up with gas. 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 $50.53. And now that you have a full tank, you can drive yourself to work in two weeks and make a thousand.

Brian: That’s exactly right.

Bo: You’re not supposed to ruin the punchline. You ruined the punchline.

Brian: Whatever. I think he— I might have given him the idea for that. How often do I say that the best way— Sometimes you have to even do 20/3/8. So because your first wealth builder is going to be your J-O-B. He might be a financial mutant that saw our content and actually said, you know what, let me make something out of this.

Bo: I love that. It’s not get rich quick. It’s not get rich overnight. It is, 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. Well done.

Meme Stock Trading Advice (1:11)

Video Clip: 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 15 to 25% on this meme stock stuff because it’s hot and it’s early. And the one thing that we learned from 2021, 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 I don’t know what happened. Maybe there was some random algorithm attached to my tweets. It just triggered some type of domino effect to bigger money. I don’t know. But that was maybe the luckiest trade I’ve ever made.

Brian: It’s just— there’s nothing— it’s gone. Hey, you want to get rich? Let me tell you a system that I have that’s going to blow your mind. Get in early. Buy low, sell high, you’ll dominate the world.

Bo: 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.

The Rolex Investment (2:49)

Video Clip: Here’s why buying this Rolex was one of the dumbest yet smartest financial decisions I’ve ever made. You see, when I bought this watch back in 2015, at the time it cost me £5,400. 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 sh—. 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 8 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.

Bo: 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.

Brian: 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 you.

Bo: 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— he rubs her nose in how much money he’s made. 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.

Debt Saves You Time? (4:45)

Video Clip: The average American makes what? $58,000 a year. Average worldwide is like $35,000 a year. All right. $50,000, right? Yeah. 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? With that $50,000, they’d have to pay taxes on it. Oh, yeah. Taxes, living expenses. 10 to 15 years. 10 to 15 years. What would you say? About maybe 8 to 10 years. Now ask me how long it would take me to go get a quarter of a million dollars from the bank. Probably a week. 30 minutes. Say probably five minutes. Skill level is different. Is that all business is? 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. Can you get that money back that you invested? No. What if you fail when it was the bank’s money? You file bankruptcy and start up. Oh, there you go. File bankruptcy. You’re not adding no money. Yeah.

Brian: There’s a lot of small businesses out there that are based upon the work you do that. Think about your attorneys, your accountants, your doctors. They’re all service-based businesses. Much lower capital requirements. 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 we’re saying this— the startup of a small business.

Bo: 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 for a down payment, 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 much faster 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. Easier is not necessarily better.

Move to Brazil to Be a Millionaire (6:54)

Video Clip: 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.

Bo: 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 and like where we have relationships, where we establish those. 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 is only one part of the life equation that we get to live.

Brian: Bo, can you go home and record the conversation when you go home and tell your wife and children that you’re moving to Brazil or Thailand. Tell me how that goes with kids and schools and churches and everything else that you have, you know, roots in the ground with.

Paying Off the Minivan with Passive Income (7:54)

Video Clip: We 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 2 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 note. So the investments essentially paid for our new van. 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.

Brian: I almost felt like he forced the content creation on this because he was like, “Hey, 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, and 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.

Bo: 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 is going to work harder than I can, and the money that 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, a big bucket of assets in financial independence, he said, “I’m going to go out and lever. I’m going to borrow all the money for 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. 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.

Brian: That video did nothing for me like— what do I do with my next dollar based upon if I took his guidance? I mean Roth IRA or am I going to be pressure washing driveways? What’s— what— 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.

Timeshare Your Luxury Home? (10:32)

Video Clip: We hit upon the idea of co-ownership, which is what Picasso allows. Buy a home in 1/8, 2/8, 3/8, and then you co-own it with other people. It’s like carpooling. Time share your house. 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 tier. Most people can’t afford a second home. 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 6 weeks a year. Why is 6 weeks relevant? Well, that’s 1/8 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 homes, whole home value is around 4 to 8 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 1/8 of the home.

Brian: Yeah but can we all just say time share? He just— He just came up with a time share concept without saying time share, but for your luxury property.

Bo: 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 pro— is that— for— 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.

Brian: Well, when I’m trying to solve housing issues, it’s not necessarily even for any secondary home.

The 401(k) Vesting Trap (11:57)

Video Clip: We 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. We will give the people a retirement plan. One where we match the investments. Yeah. Okay. Because we could definitely afford matching. Not all at once. Go on. 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. You simply attach a price to it. Okay. And how long until their 401(k) plan will fully be vested? I say six, seven years. Actually, no. Make it like 3, 4 to preserve the comment section. After every bad day that they want to leave, it becomes a calculation because leaving will feel like theft from themselves, punishment disguised as a benefit.

Bo: 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 going to give you this much money if you stay here for 6 years. I’m going to 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.

Brian: Well, and if 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— what? If you want to get the cameras inside the room, be a fly on the wall. It was much nerdier than that, right?

Closing (13:51)

Bo: Brian, 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— new—

Brian: What are you talking about? I’m headed out right after this to go pick up a new Rolex.

Bo: 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 and we believe that you can do money better.

Brian: With that, I’m your host Brian joined by Mr. Bo, Money Guy Team out.

Brian Edit: Let me tell you a system that I have that’s going to blow your mind. Now, hone in, lean in, because this is all you need to know.