Business, You Call THIS A Business?!

0:28A KFC tale in the pursuit of flavor. Hablas Español. Spriches to Deutsch. Condénosque.

1:00My name is Santi. I'm 29 out of Albuquerque, New Mexico, and this is Financial Audit. So what do you do for a living in Albuquerque? I have a mobile detailing business. Oh, okay. So you're a business owner. Yes, sir. And that's your full-time thing? Yep. Mobile detailing. So going, I'm not mistaken, that's going through and cleaning cars, making them look all pretty on the inside? Yeah. So really mobile detailing is like a very thorough cleaning of your vehicle inside and out. there's a few different types of detailers out there but really that's what we do we come in take brushes to the vents and the cracks and crevices and clean and everything dusted down dude that's sick how long have you been doing it i launched my business in june of last year okay so a year just over a year how has it been interesting oh yeah um very um i finally got some bookkeeping help and was in preparation for well i was gonna do it anyways but it came through just in in in time for this to get a p &l for the first time uh which if if you wanted a little later or whenever we can go through that because i think that's important last year the first six months so i've only looked at the p &l specifically at like last year and then like this calendar year yeah um last year i was negative i think like three or four thousand um this year at this moment I guess that explains all the debt.

2:21But go ahead. Well, the debt is honestly like from before that. Oh, geez. Yeah. So, but this year I'm up like 13 ,000, 14 ,000. That's not a lot to live on. No, but that's what I'm figuring out. Trying to get through that and anticipate this work will really help give me some clarity. How many hours a week do you work this job? In the field, I mean, it's all I do. Total work, total work. Yeah, what do you do? How many hours a week? Let's see. Let's guess. Like probably like 80 hours a week. Oh. But that's not all detailing. No. So that's detailing. How much of that is detailing? Probably about five days a week, anywhere from four.

3:06How many hours a week? That's, let's see, four, five. I'm going to average like, let's say six, seven hours. So let's say six and a half. Six. Yeah. So a day, five days a week. two of my days one is uh coaching and coaching coaching what uh business coaching didn't you just say it took a day okay so so that's what one day one day is reserved for that but it's an hour yeah yeah but not only that so like the whole morning is like content creation or working on content creation yes sir okay what's that is that a different job or is that for this business no it's for the business what content are you creating uh mostly reels and then also also So Instagram and stuff?

3:45We'll link his in the description then. Thank you. Yeah. Yeah, so my reels and then also my email marketing and I've been doing some blogs and stuff as well for the post. So it's all the work that I do is for the business and business related. Do you have more business than you can take on? Not at the moment. Okay, good. For the area, where's your pricing in terms of the overall competitive industry the lowest to the highest, where are you? Probably like high-mid.

4:22If you're detailing six hours a day and you're in the high-mid, this doesn't sound like a business that's going to make it. Not to just be negative, but what did you say? $13 ,000 this year so far? Almost in Q4? Yeah, well, that's net. So the business is done over 26. even$26 ,000 and three quarters basically. But that's six hours a day. Five days a week. Yeah, let's pretend it's just a normal eight hour day. That's not going to make the gap to a livable income or a successful business. I'm sorry, I'm not trying to be negative. I'm just trying to figure it out because I want you to obviously do well and I'm trying to be very realistic which sometimes can sound kind of pessimistic.

5:11how does this business go to making you a living that I am not seeing my my current plan is to go harder on marketing and advertising um and so trying to generate more so I did some quick math so an average detail I can expect about 350 and so I figured if I do that five days a week and I did so excuse me if I do two two a day five days a week and I just assume just a 50 hour work 50 week year. I think it's like 175 if I did the math correctly. So it would be an average of$700 a day, five days a week. How many hours again a day? I'm sorry. Well, so if I do this, if I, so my goal is to book out five days a week, two jobs that I can anticipate being anywhere from like eight to 10 hours and I can anticipate doing about 700 a day.

6:09How many days are you doing? How much a day are you doing right now? At the moment, um, probably on average, like one a day, five days a week. No, no, no. 700 a day. How much in terms of dollar amount now? Um, I can't think of the average right now off the top of my head. Um, but probably like 250 to 300 so like for example my last job i did um that was like 400 but that's also assuming some days that i don't have have any jobs no that's 65 000 hours a year five days a week 250 a day you're at 20 and we're three quarters in correct um and so that's my assessment is based off of what I've been doing maybe over the past like six weeks where I've seen a lot more growth and development in my skills and abilities to fulfill services.

7:04I participate in some networking groups as well that are like the referral based. And so I started one, I want to say maybe like five weeks ago. And then another one I started about three, four weeks ago. Well, me assuming the numbers that you gave me is like me putting a bet on a single stock, penny stock. I don't know. I can't just assume that. Historically, again, you were negative last year and we're up. I mean, you've walked away with 13 ,000 this year so far. Okay. But given that I'm building a business and like really working on myself in this business, I foresee it like developing over time.

7:50I'm good with risk in taking businesses. There's things to do before then. We have a fully funded emergency fund. We don't have any bad debt. We haven't even touched this endless stack of bad debt. This is bad credit card debt. So is it the right time to start a business that doesn't make any money? I don't know. Like, okay, why not, for example, work for a detailing company, get paid, soak up the job experience, understanding what it's like to run the business and what they've done and all the successful things. then eventually after some non-compete end. What's going on? I'm Arch Manning, Viore athlete and college quarterback.

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9:00orders over$75 and free returns have a great day start yours well again you're going off a trend line but your trend line is down right now June, July, August is down June was a peak. Great, which is awesome. It was March, April, May, June, July, August. So if we're going off the trend line, we're headed in the down direction. Correct. Yeah.

9:30Maybe I'm banking a little bit too much. The expenses aren't low. We're just not bringing in money. Yeah. Yeah, and I know it's not much to go off of, especially, right, like we see the trends going up and down and new business and figuring things out. I'm surprised you're even like making payments How What's your living situation right now I need to know I bought my house in 2019 Oh you own a house Well I got a mortgage on it Yeah Okay And that right now is about 1200 bucks a month Wait you mentioned to me beforehand Oh this would make so much more sense for a living I was like how is this dude paying to exist You mentioned that your girlfriend contributes a lot.

10:14Oh, that makes sense. Because math was not mathin'. Yeah. How long have you been with your girlfriend? About six and a half years now. Is marriage in the future? Yeah. Well, and that's what we both plan and move forward or towards as well. Oh, buddy. Okay. What is she taking care of? At the moment, she covers the majority of the utilities. I've been up until this point paying the internet, which is like 45 bucks. we have well there's not a document on it but I do have food stamps EBT which I think is about I think it's like$290 a month so we use that you do she doesn't right? she makes$50 ,000 a year I think you told me before and so she also covers the groceries that are in excess of that and then majority of the time if we like go out with her family or something like that she covers it or we'll split it.

11:10So those things and then some of the toiletries. Would you take care of your rent or the mortgage completely? I am, yes. So I cover all of my debts. How have you been able to afford it? Because, again, the math isn't math. $13 ,000 a year doesn't even cover your mortgage. What's your mortgage? $1 ,200. And technically there's two because I got it on a first-time homebuyer. So I got the regular mortgage. and then also they financed the down payment. So you would have had$2 ,200 left this year outside of your mortgage payments. I don't know. You have to tell me something. Yeah. What is not adding up?

11:53Because this is f***ing I'm confused, and this doesn't make sense. Yeah. Honestly. Where's the numbers? Honestly, I'm not too sure. I had a part-time job early this year at AutoZone. So I was making a couple bucks there, but not a lot. And then we got robbed a second time. No, you didn't make a couple dollars. That's the minimum wage in New Mexico. I think at the time it was like 12 something an hour. Okay, so you're making$12 an hour, not a couple bucks. Yeah. And so that helped cover especially the early part of the year because I had like only three jobs between December and January. And then I got robbed.

12:32Three detailing jobs? Yeah. Yes, sir. You got robbed? Yeah, we got robbed. The store got robbed, and I was working twice. The second time they pulled a gun on me, and I was like, that's probably good for me. I get that. If I had that in business too, but then I would go get another job and not just not have another job because there's debt. Let's talk about the debt. Oh, my gosh. What would you give yourself? Score zero or ten hammer. Your score. Zero. Santee financial score. Yeah. I'd like to take a brief moment and thank today's video sponsor, Vora. Vora is an exciting investment platform that is changing how to grow your money.

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13:40This can give them a head start on their financial journey, or it can get you some help in jump-starting your own. And by using my promo code HAMMER23, after you deposit$25 or more, you will get an additional free$10 bonus right away. And that's why I love this. It's just free money. And after you create your account, you can get an additional$25 for each friend you refer using your unique referral code. So use code HAMMER23 and get a$10 bonus when you sign up for Vora using my link in the description below. Yeah, I don't know. I've just been super, I guess, scrappy. And every month has been very close to paycheck to paycheck.

14:14You know, like I'll get maybe a couple grand in the bank account. And then between either softwares or like, you know, the mortgage and things like that. And paying the minimum payments on all these debts. It's like just making it by the skin of my teeth. Oh, and before we go into this debt Make my day better Hit that subscribe button 750 ,000 subscribers, that's what we're trying to get to And thank you to everyone who has so far I really appreciate it We have a freedom card, yeah, this is giving you a bunch of freedom Freedom of Owing 5 ,000 The balance of this one went up So yeah, no sh** Okay, math is making more sense now Because you can't afford life So you just put it all on a card that's already basically maxed.

15:00Yeah. Is that what's happening essentially? Not really, but there is. So I've over the past couple of months, I've resulted to as much as I can only pay for things either cash with my debit card. And they're talking about you purchased two hundred seventy eight dollars on this thing, even though you only made one hundred sixty three dollar payment towards that. plus an additional$122 of interest charged on it, by the way, fun fact. Yeah, that's bad. So go on telling me about the thing that was incorrect. I can't remember off the top of my head, so I'd love to go through the statement to point them out.

15:35I think on this one there is one thing that I've maintained on a credit card, which is your Nest subscription. Is it a Nest subscription or did you go purchase a camera? No, it's a subscription. It's an annual, yeah. Then an annual Amazon Prime subscription as well. Get those off there, man. $122 of interest. You've lost$1 ,000 of interest on this card so far this year. The interest rate is basically 30 % rounded up. We can't have things on here. This is a card that's f***ing you. $5 ,037. Balance went up. It's basically maxed out. The minimum monthly payment on here is$172, which you can't even afford that, and this is just one of the debts.

16:16Now we have an Amazon card, which is funny. I probably would have put my Prime purchase on there, but whatever. It went from$9 ,462 to$9 ,391. But you made much bigger of a payment,$342. But guess what? We still purchased$58 and then$213 of interest on it. So$9 ,391. The largeness of that number didn't even hit me until right now. Jeez, probably because I'm hungry. Okay,$307 is a monthly basis. You can't afford this. Correct. Audible, you don't need that. No, and I did just cancel it. USCCA, Delta Defense. Yeah, so that's one thing that I made sure I was going to maintain, kind of no matter what.

17:04It's a membership for legal support in the case of a self-defense situation. And this, I don't know if maybe we... What does that mean if someone attacks you, you get... Yeah, so fundamentally what it is, if you find yourself in a case of self-defense, they have lawyers that will come to support your case. And then it's also backed with financial for legal fees and stuff like that. $1 ,500 of interest loss on this card so far. Basically, again, 38%. It was like 28%. Harbor Freight Money Rewards. This is a 0 % interest thing? yeah so 12 12 equal payments starting when june yeah and so i've made my first payment this month of uh it should be on there i think it's 88 bucks um i have it right here i think it's 88 a month yeah that'll do it okay good that's fine i'm okay with the zero percent financing again not 100 sure for you because you just haven't managed that well.

18:13But for people that can, 0 % financing is fine because you just invest the rest. And obviously, 8 % of general stock market return is a bigger number than 0%. So it's fine as long as it's managed. But, you know. And like I was mentioning a little bit before, this debt pretty much, I think basically my downward spiral for debt came about when I, after I bought my house at the time, at the time I was bartending and I was making like 60, 65 a year. Um, and like no responsibilities, you know what I mean? It was like my girlfriend was the only other like response. Oh, and my, and my, my dog. Um, like I don't have like a specific thing.

18:57Like this is how I got this much debt. It was more so just like maybe like stress spending and like kind of giving up a little bit. Um, how'd you give up? um, I think it was just like some stress. You could maybe call it depression or something like that. And it was just being, just being completely irresponsible. I think at the time it was like, Oh, I got money. Money's coming in. Like it's, it's good. I wasn't being, uh, very thoughtful or looking into the future. Yeah. Cause you've racked up more credit card debt than I've seen in a very long time. And you're only 29, at least this card, you made a minimum monthly payment of$959 on, but it only took it from a balance of 8 ,834 to a balance of 8 ,788 because there was$213.16 of interest that accrued on this card, sitting at a lovely 28.24 % interest rate.

19:48And this year so far, we've lost$1 ,600 on it. For those keeping track at home, that's going to take us to... What are the different cards? You had$1 ,000, I think.

20:084 ,100 in interest you've lost this year so far. You've brought home$13 ,000 from your business. Make that nine now.

20:20With some credit union, New Senda, we have a balance of 328. That's all? Yeah. What's this for? What is this? That was when I was early on building my credit. Well, sorry. I was explaining what the line of credit was, but that was a vet bill. So I pulled from my line of credit to pay the vet bill. Is there a minimum monthly payment or you just have to pay it whenever? Minimum monthly. Late charge assessed. Yeah, because you're missing payments. Five. One. I was just going to say you're about get ready to yell at me. yeah that one I just completely forgot about it like I knew I had it out but I spaced getting in there to make the minimum payment and it hit and it took like on my credit score I think took like a 50 point hit but I would say that's the one and only surrogatory mark I have 75 minimum monthly balance this is at a 14 % 14.5 % interest rate so we haven't seen an interest rate that wasn't like death except for that 0%.

21:31Wells Fargo, something. Oh my gosh, dude, it doesn't stop. Wells Fargo, everyone's favorite bank.

21:42$7 ,179 is currently owed. $0.58. Okay. Dude, so much credit card debt. This is an absolute insanity. $225 ,000 of payments, $2.43 of purchases. Looks like he went and got some taquitos at Shell Oil. And$160 of interest was accrued. Lovely. 25.24 % interest rate. And you've lost$1 ,209 on that. So that brings us to a lovely$5 ,300 of interest lost this year so far. And that card, real quick, before I move to pass, just because I want you to have some of the context too, is this is why you say not everybody's credit card people and getting a transfer is not the best thing for everyone. That was a transfer when I was living in Arizona for work.

22:33At the time, I was making like$43 a month, but I just had my rent there, which was$1 ,000, and my mortgage at home, which was$1 ,200. I had some tenants, but they were only paying me like$800.

22:51Some important people to me, So I wasn't charging them what would be an effective like rent rate at the time. So it was 800 bucks. So there was 800 bucks for that. So, but I was still paying, that's at least four to like 1400 bucks and like just housing expenses during that, during that time. And so I opened this card with the hopes of transferring it over and then making progress on it. And you didn't. And then you just racked up the pass card again, probably. Yeah. And so it was just surviving. So many people say not to. Yeah. And I ended up just surviving. And I think the biggest thing was I didn't have actually a plan.

23:30And so I was just still trying to like survive. And that landed up on the cards. Now, this was your new owner's thing. So was this you financing a part of the down payment? What was this specifically? Yeah. Yeah. So the structure of the program I qualified for. And I wasn't like too, too well aware of exactly what was going on. not that i necessarily feel like i was taking advantage of but just the way it is is that um i got the mortgage and then there was a reduced down payment to like three percent in new new home buyer and then the other program that i got was basically financing yep so you financed the other three percent yeah which was like 75 that's so bad i want everyone to get into a home i want you to get in home i want you to get into home well actually well technically you can't afford because you don't make any money.

24:18You're kind of relying on the girlfriend, and then you're relying on other debt. So it doesn't make sense for you to have purchased this anyway, but having equity in a home is important, and there's ways to get there. We don't need to rush into it. It's hard for many people in many cities. Don't get me wrong. It's not a one-size-fits-all, but you did not need to do it because it's not a very expensive house. Either way,$6 ,675 is the current principal with a$10 payment. It's going to take forever. I pay just under$45 a month. Oh, yes. Sorry. interest$33.44 $44 total. Yeah, because all of it's gone to interest pretty much.

24:53$44.75. At a 6 % interest rate. You know.

25:03Then here's the mortgage. What is this home worth today? Do you know? Last I checked, I think on like Rocket Money it throws out like expected values. I think I saw like$2.30. Well, I did. Not that I think that. But the last time I checked. We have a mortgage of$138 ,292 With a monthly payment of$1 ,175 That's what's rough for you It does include my escrow and my insurance and all that as well At a 4.5 % interest rate And we like that So I'm immediately, there's things going through my head right now It's like, okay, if you want to fully focus on this business Fully focus on it And you don't really make that much money But you think you're going to get to a place of money But we need to get rid of this debt Because you can't afford it So you're just building more and more debt right now.

25:47And it just doesn't make sense. The situation is not mathing. A way to clear the debt is to sell the house. You have that chunk of, what did you say it's worth? Uh, two 30 based off of, uh, rocket after fees and everything, maybe walk away with 75 ,000 hours, do this, pay, you know, pay for that, have a little bit of an emergency fund. Yeah. Pay off all the debts, have a little bit of emergency fund that you can sustain yourself while you build the business and you and your girlfriend rent for a bit. That sucks though. Cause you're locked in at a 4.5 % interest rate. Who knows when or ever if we'll see those again, probably at some point historically, but it could take a very long time.

26:21You're in a rate that I like, and I would rather you just have this forever and just minimum monthly payments until it's paid off. But I feel like you're not willing to do what's necessary to pay off the debt other than sell the house. I don't even know if you're willing to do that, because what's about to be necessary to pay off the debt is you spending less time in your business and spending more time actually making money for other business that makes money, you know? Yeah. Because you have to pay off the debt. You have that as a responsibility. Yeah. And so I'd like to let you know, it's something that I certainly have considered and would like to do.

26:59Like to do? Yeah. But my, so our current situation, me and my partner, we've had the conversation. Selling the house is at the moment, not quite an option. Go on. We just aren't looking to sell the house. You just said you would like to. Yeah, but as a... So why is it not an option? Well, because it's not just my own opinion. Actually, it is. You own the house. She doesn't have... She doesn't pay for it. I don't care. Wait, I don't give a shit. I'm sorry. I don't care. Yeah. What? Does she know how bad your debt is? I believe so. I'll just jump ahead right away. I don't think she's gonna approve well it's not her choice this is not this is not up to her yeah I would like to be clear too like with moving forward I know this situation is dire do you yeah that's why that's why I came here to get some advice and I would like I just want to be honest with you as well so we can work out long long day late night love putting on your makeup but hate taking it off there's really no better feeling than coming home getting comfy and removing your makeup with garnier waterproof micellar water it easily removes even stubborn waterproof mascara none of that harsh rubbing needed and you don't even have to rinse afterwards it leaves skin cleansed refreshed and never dry head to amazon to shop garnier waterproof micellar water now good plan um selling a house is certainly a consideration you literally said you want to but well because it's going to be a joint decision and she's not for it why is it a joint decision I'm sorry but why you guys are not married she has nothing legally to this house why does she even care about the house you guys can rent and get a house together when you guys are married I want you guys to have a house I want you guys to have an amazing future together one she has no say in this legally speaking honestly even morally kind of to a certain extent and you guys will be in a house better house even in the future yeah this there's no logic right now i agree um it's just a joint decision and i would love to maybe at some point also look at some other options i just have to come better prepared to tell her what a plan is okay if we're gonna if we're gonna make that change no it's fine you're right this was the easy change so now comes the you change where you're gonna have to do a ton of work more work than you've ever dreamed of in your life, more work than you've ever pictured in your life to get out of the debt.