Financial Advisors React featuring Graham Stephan

Introduction – Graham Stephan Joins for React Video (0:00)

Brian: We have a treat for you guys in the Money Guy family. We got Graham Stephan joining us today for some wild and crazy reacts.

Bo: Brian, I am so excited about this because I can’t wait to see what the content team has put together for us to react to. Graham, thanks so much for hanging out with us today.

Graham: Thank you for doing this. I’m honored to be here.

Brian: All right, let’s dive right in.

Grant Cardone – You Can’t Save Your Way to Wealth (0:20)

Video Clip: The idea to become a millionaire is an adopted concept. It is a lazy man’s or woman’s dream. If you make 400 grand a year, I don’t know how you feel good about yourself as a husband and a father. This is why I tell people never get advice from a millionaire because when you go from nothing to a million, the first thing you do is you go into conservation. When you study the most successful people on this planet, they’re buying whatever the hell they want because spending is not the problem. It is for the middle class. And the reason spending for the middle class is a problem is because they’ve taken their attention off of income and put it onto a budget. And a budget is a defense position. It does not put points on the board. You cannot save your way to wealth. Cannot save your way to freedom. You cannot save your business. You cannot save your brand. The only way to save anything. True prosperity and affluence come from expansion and risk-taking, not from saving.

Graham: See, but Grant is great at marketing. Like, he’s targeting that 5% of people where they’re going to hear that and be like, he’s speaking to me.

Bo: What I think is wild is that I could not agree with him more that you absolutely can save your way to wealth. I mean, we have an entire financial planning business based on folks who have literally saved and invested a wealth. And for him to say that, oh, if you make $400,000, how do you feel good about yourself? A million is nothing. That’s asinine. That’s not the real world. That’s not where people actually live.

Brian: Well, I think that Graham is spot on is that what Grant is trying to do is stratify to that 5% of the population that he can sell products to. Because without a doubt, when you start your journey, you better be budgeting, knowing what your dollars are doing. As you even catch a little traction, then you start investing in index funds and all that stuff. Grant doesn’t want those people because if you’re going to get into the apartment complexes and the other products he’s selling, you need to be higher than that. I’ve known a lot of entrepreneurs that have bought Grant’s programs because it helps with sales and other things. So, I think he’s just thinning the herd. He doesn’t really believe it, it’s really good click engagement.

Graham: There’s another guy, Sebastian Ghiorghiu, went viral like two years ago by saying that “if you don’t have a Lamborghini, you should actually sit down and have like a serious discussion with yourself as to why you don’t have a Lambo. $200,000 is chump change,” but he got so much attention from it. And his whole point is that the opportunities exist if you were there looking for them and it’s your priority. But at the same time, it’s just it’s good marketing. It’s good marketing and we’re talking about it and this is proof that like it’s working for Grant.

Brian: Yeah. But is the part that are we making the world a better place with the content. That’s the part that I’m like

Graham: For the 5% yes, for 95% they’re going to talk about it like this and move on with the world.

Bo: That’s right.

Living in a Car for Crypto (2:54)

Video Clip: This is day 115 going home almost to buy cryptocurrency yet. I daily a BMW and sleep in a Tesla. This isn’t a flex. Both cars need thousands of dollars in repairs and I’m drowning in the negative equity. I would have to pay thousands of dollars to get rid of these cars. I’m not keeping these cars because I want to. I’m keeping them because they’re part of my survival strategy. Crypto pumps. I clear my debt. I start a business.

Brian: I don’t even know what to say.

Graham: It’s high risk, high reward. I’ve been following this guy on Instagram for like a few months. He’s dedicated to it. He’s posting every single day. I actually reached out to him and I said, “Hey, let me know if you’re coming to Vegas.” Because he’s living in I think it was Orange County. And I’m like, “Hey, maybe the taxes in California a little high. Maybe there’s some other states, right?” But he was saying the opportunities he gets in that part of Orange County, the people he networks with is worth it. He’s going all in. So like his dedication from a content standpoint and going in cryptocurrency, 10 out of 10. I don’t know if it’s going to work, but like he’s getting attention from it. And even if crypto fails for him, I think he has a career in social media.

Bo: If I were going to think about how to build wealth, I don’t know that that’s the way that I would attack it. Going all-in, that seems like pure speculation. Like I just don’t know. From a high probability success standpoint, I don’t know that that’s the one.

Brian: But chicken or egg, is his success coming from the content creation and the engagement or is it actually from the way he’s structuring his business? That’s the thing that’s so unique in these day and times is that there’s people that are trying to use their uniqueness like living out of the car in Orange County and then doing crypto strategies. That’s not a viable, it might be, you know, it could hit. It feels more like this is a content creation strategy and creating a brand.

Graham: He’s hedging himself though because if crypto does well, then he makes a ton of money. And if it doesn’t, then he’s building his brand. Either way, he’s going to win.

Bo: That’s a lot of eggs in that basket though, right? Either crypto has to hit or you got to make it on social. One of those has to happen.

Graham: If crypto doesn’t hit, then he’s going to get more attention on social. And if it does hit, he’s going to get more attention on social. When you look and you see his posting schedule, he is on it. Like, he is so dedicated to it.

Bo: All right. How long you been following him for?

Graham: Few months.

Bo: I can’t wait to see.

Graham: I don’t think he’s missed an upload.

Brian: That’s great.

Graham: And his consistency, I have to say, is admirable. Just from a business perspective like that crypto investments, I could go either way. I’m not sure.

Steve-o Got Me Rolling – Predatory Car Loans (5:16)

Video Clip: What’s going on, folks? It’s your boy Steve-o got me rolling today. I got my dog Cam here approved on the 17 Ford F-150. First time buyer. I was interested to experience you today, my man. I was in here. It took a little longer than expected, but I was in and out. You know, he made it happen. A miracle with a low credit score. I mean, got it going. Well, sir, if you’re in the market for the vehicle, all you need is your ID, piece of mail, your name, shoot me a DM. Steve-o got me rolling today.

Graham: Is this real?

Bo: Oh, yeah. You’re not familiar with Steve-o.

Brian: Well, you’ve been following the crypto live in your car. We’ve been following Steve-o because he makes an entire living off of people with bad credit, small down payments, and then financing years upon years on cars that are going to depreciate rapidly. It’s disgusting. It’s real. This is real. His whole thing is no matter where you are financially, he can get you in the car of your dreams. You show up and Steve-o will get you rolling. And what you end up with is 84-month car loans with like $100 down and 19% interest rates and he is selling this over and over and over again to a social following.

Graham: I’ve seen, I talked to a guy who runs a car dealership who does stuff like this and he says the way he structures it because some of these buyers are very high risk, there’s a large percentage of them that can make the first few payments and then they stop. So the way he said he structures it is by making payments due every other week. So that way they’re not going to get like a full month behind. So if they default you’ll know after the two weeks and it’s an easy repossession after that point.

Bo: Imagine if your whole business was set up on the fact that most of your customers are going to fail and fall off. It drives me nuts because we know in our world, in our view, automobiles can be like napalm to your personal financial wealth. If you’re borrowing on a car, you’re putting a low down payment, you’re financing it over 84 months, you are never going to own that automobile and you’re never going to be able to build wealth outside of the car.

Brian: You can’t afford the car. I mean, that’s one of the reasons we talk about, you know, the 20/3/8 when you have to have transportation, but that never applies to luxury vehicles, large expensive vehicles. That’s why I mean paying $600 a month for the next 84 months, he’s not funding his Roth IRA. He’s not going to ever have enough capital so he doesn’t have to work. And that’s the part that saddens me when people drive their wealth instead of actually building something that can work harder than they can with their back, their head, or even their hands.

Graham: Who’s loaning the money though, because it has to be a positive ROI.

Bo: You would think so, but again, it might be one of those things that interest rates are so high. So they’ll tell you they have like 14, 15% interest rates on these auto loans and the people end up not sticking with it. So I don’t know what the cost associated with the loan are, not a great deal for the consumer. These people should not be able to get into these vehicles.

Graham: They’re probably paying fees up front just to get the loan so that even if they repossess the car, they get their money back.

Bo: They still made money. Yep.

Real Estate BRRRR Strategy (8:11)

Video Clip: This is the strategy that people employ. They buy a property, you fix it up, you rent it out, and then you refinance it and say it’s now worth $100,000 more than what you bought it for. You can get a loan for that exact amount, which you then use as a down payment on another property. Rinse and repeat. Do I have that right? So, let’s say the property goes from $1 million to $1.1 million. They’ll give you 70 to 80% of that. That extra $100,000, they give you $70,000 to $80,000 of that. It’s just that simple.

Bo: So, when it comes to real estate investing, it’s just that simple, right? That’s all you got to do. You go buy something for a million, it automatically turns into $1.1 million. You refinance, you cash out. You go buy another one, anyone can do it. Is that the way that works?

Graham: This, unfortunately, was cut very short. Like, you know, in these clips, this was probably a 10-minute segment where I talked about how to buy a property, add value in terms of remodeling it, maybe renting it out at a higher rate. If the market’s going up, you can refinance your rate. That was filmed in 2020, and the market has completely changed. Like you could look back at my old videos and it was so easy to invest in real estate back then. It was as simple as just be patient, find a right deal, negotiate, here’s how you could add. I mean it was really rinse and repeat back then. None of those strategies work today.

Bo: And interest rates are an entirely different place than they were, right? The whole landscape has changed.

Luke Belmar’s Three Asset Classes (9:26)

Video Clip: My investment strategy is very simple. Be super liquid. Have minimal assets that require maintenance. I like three asset classes. One, the hard assets. I like gold and silver. Why? Because I can exchange these things anywhere in the world for a fair price, right? We all can agree that I can move $1,000 of gold anywhere and sell it for $1,000. Same thing can go with crypto, but I can do it in a digital way. Yes, the price fluctuates. Yes, there’s a little bit more uncertainty, but I can take $100,000 and move it from here to Lithuania with a hard drive and nobody would ask me a question. If I was to take $100,000 worth of gold bars from here to Lithuania, they would be all over. So cash, US dollar, Swiss Franc and Singaporean dollar banking on those empires. On the digital side have digital assets that you can move that are liquid and physical gold, physical silver.

Bo: So what were his three asset classes?

Brian: Gold, silver, and crypto.

Graham: And then different currencies.

Bo: The currencies, right? It was the bullion, the gold and the silver, and then the crypto, and then the currencies, but those are all in theory supposedly supposed to be sort of like cash and cash equivalents or hard commodity goods. I don’t know if I was going to build a diversified portfolio, I don’t know that those are the ways I would do it. Because he just said, I can take $1,000 of gold right now and exchange it anywhere in the world for $1,000. Well, only if the spot price of gold stays exactly where it is right now. If I buy $1,000 of gold right now and a year from now the value of gold goes down, that gold that I bought is no longer worth $1,000. It’s worth some amount less than cost.

Brian: I mean, where do you walk in with a gold bar right now in downtown Franklin, Tennessee, where we are?

Bo: Hard to get a cheese.

Brian: Who’s going to give you the spot price? There’s going to be some, I mean you go to pawn shops, you go to other things and they’re all going to have different friction costs. I don’t think it’s as liquid as he was making. Plus the whole custody of it. I mean if you’re walking around with gold bullion

Graham: But that’s where Bitcoin comes in. Then you could just go on your phone.

Brian: But that’s why it’s a comparing contrasting walking around with gold bullion or even silver. There’s a little more I will give that to the crypto side because you can just have it on a drive or something like that.

Graham: This appeals to the doomsday prepper though where it’s like, hey, you might have to go to like New Zealand one day. Like you might have to do that. So you have your currencies.

Bo: But in the event that you don’t have to do that, here’s what I didn’t hear him say. Hey, I really like buying, you know, solid American companies via low-cost index fund and the S&P 500.

Graham: That’s not exciting, right? You know what I mean? Like talk about that sort of thing. This is the same guy who says that like drinking tap water is like lowering testosterone. Red number 40 is like ruining everything.

Bo: Got to stay away from all that.

Graham: So it’s Luke Belmar like I wouldn’t expect anything. So it’s on branding. It’s marketing.

Bo: But again it’s like that’s the 5% who see this like oh yeah when you think about general audience out there financial advice you’re going to take be careful taking advice from folks who are speaking to 5% of the population, right? Because the advice that they’re giving may not be the advice that actually makes the most sense for you.

Brian: I feel like I’m learning more than anybody else probably in the audience and the fact that I feel like this whole game of education has been our motive and operation of why we create content. Graham is educating me that maybe we have missed the boat on this. We should be pushing this in a completely different way.

Graham: It just depends on what your goal is. If it’s reach and views, everyone that’s on here is doing that because their goal is to maximize viewership. If you maximize impact, you’re going to take a different approach. But you could also argue that the more reach you have, the more impact you’re going to have so long as you’re sharing good stuff, right? Or you get fewer views and those people who watch you really enjoy your content.

Individual Stock Picking vs Index Funds (12:59)

Video Clip: You want me to be happy with a measly 12% on average return when I need to come up now. I need to come up now. Look at these returns. If I was dumb and I invested in VTSAX, I get 12%. But look, if 10 years ago, I go all in on the real stuff that makes sense. All I do is I hold FAANG plus Nvidia, Meta, Amazon, Apple, Netflix, Google, and Nvidia. I would have gone up 713%, 873%, 633%, 1,268%. Had I put my $3,000 into Nvidia, I would have gone up 26,129% in 10 years.

Daryl Collins: That’s amazing. And if you had wings, you could fly. Yeah. So, what crystal ball did you have 10 years ago that told you that?

Video Clip: I don’t I just

Daryl Collins: Oh. Oh, I don’t have one. Oh. Oh. Oh. Well, yeah. Obviously, if you knew that was going to happen, if I knew that Bitcoin was going to go from a penny a coin to $100,000, I would have sold everything, everything and gone into Bitcoin. The thing is, you don’t know that’s going to happen. And there’s a lot of stocks that looked every bit as promising as those that you put up 10 years ago that flamed out and went to nothing. You would have wound up broke. You don’t know which horse is going to win. But I do know that VTSAX will reliably make me wealthy. And 12% a year compounded over time. 8% a year. Let’s be much more conservative. Compounded over time is an extraordinarily powerful thing.

Graham: That guy’s awesome.

Brian: I love that. That took a different turn.

Bo: Daryl Collins, by the way.

Graham: Wow, that’s awesome.

Bo: It’s about high probability. Do you have a high probability of picking the next Nvidia or Amazon or Google? Not likely because like we said, we don’t know what the future’s going to hold, but we do know over the last 50, 60, 70 years, a well-diversified basket of large US American companies has done really, really well. So, I like when it comes to investing, I like betting on the side of probability.

Brian: Can I give an old man perspective here? I have like Apple. I was the guy with a group of friends. We bought a chunk of Apple during the Great Recession. And I talked about this at Millionaire Mission. My buddy, one of them still owns all that Apple. And I’m talking about a $5,000 to $10,000 investment is worth close to half a million now. I took my $5,000 to $10,000, but as soon as it turned to $15,000 to $20,000, I was like, can you believe I turned $5,000 to $10,000 into this $20,000? I sold to go diversify. That’s the thing. Even if you win, you lose. Because most people who buy these horses that do so well, these stocks that do so well, the moonshots, you’re going to sell it before it reaches the 10,000% return. It’s just human behavior. You’ll start getting antsy. You’ll get nervous. It’ll be like you brought this stock to your Thanksgiving dinner because you’re just so emotionally vested with it. So that’s why I tell you be careful because I’ve also seen people where they bought these stocks, they sold it too soon, and now they just kick themselves every time they see the stock keep going up. Nvidia, I have friends that 3 years ago asked me about this stock, they didn’t buy it, and now they’re like, “Do you know what I’d be worth?” And that’s why I don’t even play those games. I think that they’re not healthy.

Graham: Oh, I beat myself up over that all the time. I look at the stock that I sold and it’s worth this now and I think that could have been. I’m bad at that. I do that all the time.

Bo: That’s the problem with individual stock investing is you got to get two decisions really really right. I got to buy it at the right time and I got to sell it at the right time. Or if I get either one of those slightly wrong, I’m going to live in the world of would have, could have, should have.

Graham’s Best Advice – Open a Roth IRA (16:46)

Video Clip: What’s the worst financial decision you see 20, 30-year-olds make?

Video Clip 2: Not setting up a Roth IRA. You could be a millionaire from this and it’s incredibly easy. It’s a retirement account and by the time you’re 65, all that profit you make within the account is tax-free. But the goal is that when you’re young and doing that, you have 40 years of compound interest where all of a sudden that $800 you invest could be worth $8,000.

Bo: So, you would say the number one mistake that you see people make is not doing a Roth IRA, not just getting something working for them early on.

Graham: Yeah. That’s like the easiest low-lift thing you could do because it takes you 5 minutes to set up. You could contribute anything you have into it. And most people like in their late teens, early 20s, they’re below the income threshold anyway. Most people just are below. So, you may as well. It’s like the way I see it, it’s a free opportunity. It’s like free money they’re giving you. So, you may as well just take advantage of it. If you don’t, you’re leaving out hundreds of thousands of dollars.

Brian: Now, I have to ask you, you have a successful platform, viral videos. That was a 95% answer, meaning that was I consider it educational. Hits everybody. We’ve had quite a few videos we’ve reacted to that where you kept calling them 5% answers. You gave a 95. I think that’s commendable, but it’s just interesting.

Graham: I didn’t, when you look at my early videos talking about a Roth IRA. My video that got like a few hundred thousand views when I first started my channel was how to be a tax-free millionaire. I love that. That’s great. That was like the 5% is like how do I be a millionaire tax-free? Oh, it’s with a Roth IRA. So, I don’t lead with a Roth IRA. I lead with hey, do you want a million dollars? Let me show you exactly how you could do it with like you know 90% probability if you stick with these things it will happen barring you know a massive collapse. I mean we have no idea.

Bo: What I love is you said that when I first started doing these YouTube videos and early started out my answer was Roth IRA and it sounds like still today even now you’d say that’s one of the best things for young people to go out there and do. Open a Roth IRA and get something in it and something working for you.

Graham: Yeah. From an investment standpoint yes. And then outside of that like sales. I think people are sleeping on sales careers. And the trades.

18-Year-Old Wins $85,000 Defender (17:47)

Video Clip: Hello, Kieran.

Christian: Yeah, it is Christian from BOTV. Nice to meet you.

Kieran: How are you?

Christian: Good, thank you. How are you?

Kieran: I’m all right. Good.

Christian: Your family’s kept a bit of a secret from you. I got something parked down the road for you. You’ve just won a V8 Defender for 18 pence.

Kieran: Don’t know what to say. Starstruck.

Christian: So, this technically would be your first car, would it?

Kieran: Indeed. Yeah.

Christian: Yeah. There’s an interesting first car to have, that’s for sure. We start it. Foot on the brake.

Kieran: Which one’s that?

Christian: Nearly $85,000 worth of motor and you’ve got your provisional license. And you didn’t know which one was the brake. So, we’re off to a good start.

Christian: Will you take the cash alternative or do you think you’ll take the car?

Kieran: Oh, come on.

Family: Car.

Kieran: Car.

Family: Your family’s like car. Take the car.

Brian: Can I ask you a question? Let’s all be honest. 18-year-old versions of ourselves. Do we take the cash or do we take the car?

Bo: 18. Me? I’m probably taking the car. Yeah, because it seems

Graham: I might take the cash.

Bo: Really?

Brian: I mean, I was the guy driving the $1,000 car with $2,000 worth of subwoofers. So, I’m worried 18-year-old me would have taken the car. But now with wisdom, that is a mistake. Go get a much more modest vehicle and then invest that money. It would be an incredible issue.

Graham: At least in the United States, when you receive something like that, you have to pay tax as though it’s income. So, I don’t know if they’re covering the tax or not or what the law is in the UK, but he might have a pretty big tax bill and then he’s going to have to take the cash equivalent at some point.

Bo: Even from a behavioral standpoint, not even factoring in the taxes, if you start out and you’re 15, 16 years old and that’s your very first car, where do you go? Where do you go from there? What happens when that car it’s time to replace a new one? Do you go back to the Corolla then? Right. Like that’s one of my biggest gripes that I see with wealthy folks or folks who’ve had any sort of financial success. They’ll go buy their kids really nice luxury automobiles. And I think in my opinion, they’re setting them up way too early with something way too nice that’s going to create a very difficult to sustain lifestyle over the long term. I don’t think they’re doing him any favors. I don’t think they’re doing that guy any favor setting him up in that car.

Graham: I would agree.

Closing (20:59)

Bo: So Graham, this has been an absolute pleasure having you here. This is kind of fun doing it.

Graham: I thought this went by too fast. I think that we needed you want the episode to be an hour.

Brian: When you came in town, we promised this will be really quick. This won’t take long.

Graham: This should be longer, I feel like.

Bo: But if anybody just in case I think it’s almost laughable to say this if they don’t know who you are or where to get more info on you, where can they go check you out?

Graham: Yeah. If they want to check out the channel, honestly, at this point, Iced Coffee Hour. Like I would recommend the podcast and you guys are going to be on. Maybe by the time this posts our podcast will have gone live. So, I would just recommend the Iced Coffee Hour podcast.

Brian: Guys, we love creating this type of content. And by the way, we’re trying to create both the 95 and the 5, giving you the best of all worlds so you can maximize every dollar that comes into your army of dollar bills. I’m your host, Brian Preston, Mr. Bo Hanson, Graham Stephan, Money Guy Team out.