Financial Advisors React to Financial Advice on YouTube!

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0:39Alright, tell us, how much debt do you have? That face is telling. I don't know exactly, but I'm a college student, so there's debt there. Okay. Credit card debt. Student loan debt, credit card debt, do you have a car payment? Okay, what's the total balance if you had to ballpark it? 50 grand. 50 is an even 50 no more no less is it more like 54 probably what do you think how much do you have with my car payment i'd say probably around 16 17 000. okay what are you driving these days tesla model y how about you what are you driving a kia k4 you sound disappointed you're like is it because of the debt it was expensive yeah what did that cost well my car payment's like 630 a month.

1:23Wow. Yeah, that's hefty. What's your car payment? I'm doing 400 a month right now. 400. Was your Tesla used, new? Used. Was yours brand new? Yeah. He has to have it crispy. Yeah. That new leather smell. Yeah. Are you guys an item? Mm-hmm. Does that mean one day, if and when you guys are married, would he then be helping you pay off y 'all's debt? We do it all together. If one of us is up and the other one's down, we build each other back to the middle. Whoever's high, if the other one's low, we help each other out at that point. We've been dating for three months. That's romantic. If you don't know how much debt you have, a great thing you can do is you can start tracking your annual net worth statement.

1:57What I would tell her to do is she can go out to moneyguy.com slash resources or learn.moneyguy.com, download our net worth tool and every single year, she could fill in where all of her balances are and she would have been able to tell George right there on the spot, I have this much debt. Well, think about even 23, 8, 20 % down, don't finance for longer than three years, 8 % of your gross income. Her payment was$630 a month. That's more than maxing out a Roth IRA every year. That's a lot. Yeah, definitely more than what she's doing in her Roth. It is hard to start out just as a 20-year-old, start out in this world in which we live.

2:33Do you know how much harder it is if you start when you're$50 ,000 in the hole? Don't love it. I want to show you how the decisions that you make today when it comes to where you put your money can impact your financial situation. So let's say you have$10 ,000 and today it's sitting in a regular bank account paying 0%. After 10 years, you still have that 10 ,000. What if you choose to put that in an account that's paying a high interest, say around 3 %? Assuming that 3 % maintains, you've got 13 ,439 after 10 years. What about if you choose to put it in an index fund that on average grew 7 % per year for the next 10 years?

3:08Then you have just under 20 ,000. That's nearly double your money, not from working more or taking big risks, but just by choosing where you put your money. And that's if you never added any money on top of that 10 ,000 that you put in. Imagine what happens if you keep investing consistently. If you're just starting out, begin with your employer-sponsored account, especially if there's a match, it's essentially free money. Then open up an individual investment account. Both of these come with tax advantages that make your money work even harder for you. Bo, we talk about it, the wealth multiplier.

3:36If you go to moneyguy.com slash resources, I would encourage everybody, go figure out what every dollar that comes in your possession for your age is worth in the future. And look, I'll just tell you this off the cuff. For a 20-year-old, it's 88 times over. For a 30-year-old, it's 23 times over. Do you see the drop down there? For a 40-year-old, it's seven. For a 50-something, a 50-year-old, it's right at three times is the growth opportunity. Do you see how kind of awesome, but also cruel it is? You've got to get your money working early and often. What this reminded me of is the hardest part of building wealth is saving.

4:14But saving is only part of the equation. And once you've even mastered the ability to save money, you have to take it one step further and actually invest that money. Let those dollars start working for you. She showed, hey, someone who can save$10 ,000 is great, but someone who understands how to put$10 ,000 to work where it can work harder than they can with their brains, their back and their hands. That's when the picture gets really, really exciting. Yeah. If you're doing the hard work, do the easy step of actually making it work too. A lot of people just let it sit in cash or put it in just a savings high yield account.

4:45At some point, you need to be thinking Roth. You need to be thinking index funds. Put this money to work. Is it bad to lease? Bad to lease what? A car. Financially, probably. It depends on where you are in your life. There are certain things that are not financially optimal, but if you're wealthy enough, it doesn't matter. If you're trying to build your wealth, no, I wouldn't lease a car. I also wouldn't take a car payment. I've never had a car payment. Never. You just bought outright. Yep. Go to the dealership. Yep. Yes, I will take the Toyota Corolla. Right. Full MSRP. Well, not full MSRP. Here's the money.

5:22Economy box and then you're done. I wouldn't have said it like that. You know, there's a lot of people that have made a lot of money that have said that with a depreciating asset, just lease it. And every two to three years, you'll get a brand new. And if you have a lot of money, that's probably not a bad thing to do. If you want a brand new car every few years. I don't disagree with anything that he said there. The only one little caveat that I would throw in is just because you're paying cash, just because you're buying a reasonable car, doesn't mean that you can't still negotiate. Doesn't mean that you can't still call a couple of different dealers and get a pit against each other.

5:49You don't have to pay full MSRP. You can go in and buy a reasonable car and still pay a very good price for that reasonable car. My preference for vehicles is for you to pay cash for them. But I will say we all know that money is only a tool. And sometimes in households, you'll have very shrewd decision makers and you'll have people that are just, they want to drive a new car. And I can tell you, I've seen it with clients. I've seen it in my own household. You own a Honda or Toyota, even a Lexus or an Acura, the repairs are just, they're a few hundred bucks here and there. But when you own like these European cars, it's nothing to lose three, four, six,$7 ,000 on these repairs.

6:30You could rent those bad decisions through a lease. I mean, if you are 30 years old and you haven't even maxed out your 401k and you're leasing a European luxury car, you have failed in this financial order of operations exercise. However, if you've got a paid off mortgage and you're now at this level where, you know, it doesn't even move the needle on what type of car or what your monthly payments are, go knock yourself out. It's much better to rent this bad decision than it is to own it and just have the internal strife as you're trying to keep the house happy. Here are the three biggest investment mistakes you need to avoid.

7:03Number one, waiting for the perfect time to invest. The market will go up and down. There's always going to be all-time highs. No one has a crystal ball and can tell us the exact perfect moment to invest. So the next best thing is investing consistently over time. Number two is panic selling. The stock market has huge swings and that is completely normal. I know it feels terrible to see your investments drop 20 % and you think you can save a little bit of it by selling it before it drops even more, but you don't actually lose any money unless you sell. If you're investing for the long term, historically, the stock market goes back up.

7:32It's just a waiting game at that point, so don't freak out. My best advice is don't even open up your accounts. Don't look at them at all when the market is tanking, if you have that feeling that you need to sell. And number three is not investing inside of your account. Putting money into your Roth IRA and taxable brokerage is not investing. The cash just sits there until you actually go in and purchase investments. This is so, so common and people end up missing out on years of investment growth just because they didn't know there was an extra step to investing? Bo, I didn't even see number one because I was thinking from a content creator standpoint that she had to actually feign hiding, you know, because that was post-edit, the words shooting across the screen and her kind of feign avoiding.

8:10The dedication to the craft. You stopped paying attention. Now I got the panic selling. I got number three, but number one, I have no idea because I was just like, well done on the dedication to the craft. It was waiting for the perfect time to invest. And I love everything she laid out there. One way that we combat all three of those things, we say that if you're an investor, if you're a builder, you should always be buying. And if you can always be buying, it's going to avoid you waiting for the perfect time to buy. It's going to avoid you panic selling and it's going to avoid you putting money in the accounts and not investing it.

8:41Because if you're always buying, you are counteracting those three things because we know and we believe that time in the market is way more valuable and way more successful than timing the market. I love everything that she said, even when she did her matrix. Well, the other thing about ABV, besides making automatic for the people and your wealth creation in a lot of ways, that number two, which was panic selling, it kind of turns you into a financial mutant. Whereas when you know the stock prices are coming down and you know you're automatically buying into it, it gives you a behavioral counterweight where you actually, you get excited that things are going down in some ways.

9:20I know it sounds weird. If you're not part of that, you don't get it yet, but I'm telling you, you too can become a financial mutant and kind of see that cool retro counterintuitive thing that happens when you look at your money differently. Here's the power of investing in a Roth IRA. As of 2025, you can contribute up to$7 ,000 per year to a Roth IRA. If you can generate an 8 % rate of return, here's how much money you would have over time. If you contribute just$10 a month to a Roth IRA, after 40 years, you'll have$32 ,000. If you can bump that up to$50 a month, after 40 years, you'll have$160 ,000.

9:52The more money you put into a Roth IRA, the more money you'll have over time. And if you can max out your IRA for 40 years, you'll become a tax-free millionaire. I love it. And what this showed is it only takes a little bit of money over a long period of time to have a huge outcome, to have a huge portfolio built up. You don't have to save it all overnight. If you can start and be consistent early on, it gets really, really, really exciting. I love Brian's use of the highlighter there because I was watching it the entire time. We know Brian, and I will say he does a great job of using visual illustrations like this on Twitter X.

10:27I'm old enough I can call it Twitter. But I think that that's a great thing as an educator is being able to figure out what's visually going to create people to be more curious and lean into the concept more. And I think Brian does a good job with that. It's another reason why if you are someone on that cusp and you're just thinking, man, I'm not quite maxing out my Roth IRA. You have until the tax filing deadline next year. If you can max it out every year, every single year you max it out over that 40 year period is one step closer. You've come to becoming a tax-free millionaire. So if you can max out your Roth IRA, you absolutely should.

11:02Well, think about it. The government restricts who can put in and how much. If you don't load it up, you're going to have regrets later. So now that I've opened. This episode is brought to you by Google Chrome. You think you know a browser, but Gemini and Chrome, that's new. It can help you with practically anything on the web, like restoring a vintage motorcycle from a 50 page restoration block, or finally break down that long article you've had open for weeks. Gemini and Chrome is here for it. Ready to make anything online make sense? There's no place like Chrome. Check responses set up Required compatibility and availability varies 18+.

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12:13These are essentially a basket of stocks that you can buy at once. Think about it this way. It's Halloween and you only have Snickers to give out to kids. There's a large chance that maybe some of these kids that show up on your doorstep could be allergic to peanuts. But if you were to have bought a variety pack, you would have a lowered risk of people coming to your house, not being able to eat the candy, and then your house getting egged. I never advocate for cherry picking stocks because most people who do this will actually lose money. They typically don't perform as well as a diversified portfolio and most active managers.

12:48So folks who are working at hedge funds, they actually underperform benchmarks. and if people who spend their entire livelihoods trying to pick the perfect investment can't do it right, what makes you think 15 minutes of Yahoo Finance and Googling is gonna help you do it? We say all the time, Brian, we do not care about beating the market. A lot of active managers, a lot of stock people, the other one that they want to go out and I want to beat the market and outperform. We don't care about beating the market. We just want to be the market. If you can be the market for a long period of time, financial future is super bright.

13:19Well, even I was sitting there thinking, because I go to a spring training like good old men do. And a few years ago, my buddy said, hey, should I go and throw a few thousand bucks into NVIDIA? And I, of course, told him exactly like this video, I said, no, go buy the index funds because that's the right decision. Well, we all know the rest of the story, but here's the thing I always remind people, even if you stick it, the landing, with the best investment that you possibly could, you're going to still run the risk that after it doubles, triples, quadruples, you're more than likely going to sell it.

13:52And then you're going to bear the weight of watching it go tenfold after you got out, after it doubled or tripled. Or it could go the other way. Whereas like she shared, most people who are out there individually picking stocks and so forth, they underperform the broad indexes. So if you go and you buy the dog and it underperforms, you're going to kick yourself forever because you emotionally now have gotten yourself tied into this thing. You're trying to figure out the right time to get out of it, to redeploy the assets. It's just better to do exactly what Beau said. Instead of trying to beat the market, just be the market.

14:24And that way, when your friends call up and go, hey, how's my Nvidia stock doing? Be like, hey, great. It's 6 % of your index fund. You're doing it. You're crushing it. You don't even have to worry about if you sold it when it quadrupled. You'll be all A-OK. Actual wealth has basically nothing to do with anything you buy and everything to do with this invisible force field. And that invisible force field just means that problems are less severe. Things take less time. You have more options. And it doesn't mean you don't have problems. It just means that the problems are about the problem and not about the money.

14:53Because when you don't have money, almost everything becomes about the money. And when you go from really financially struggling to being financially secure, like you see those differences constantly. But often if you've only ever known a life with that financial force field constantly protecting you, you don't even realize it's there. And often you don't even have to tap into it to benefit from it. Because even when you look at like the lifestyle choices people make or the risks that they can take or the things that they can pursue, it is drastically impacted by what the actual consequences of failure are.

15:21Like I can afford to take bigger chances and do bigger things now because I know that there is a safety net underneath me. And it's not because I'm smarter or more creative or more thoughtful. It's just because I have more money. What she's unlocking there is that more wealth and more resources and a more secure foundation gives you more freedom and more flexibility. Some people have lived in the situation where they've always had freedom and flexibility because they've always had that safety net there. and they don't recognize that that safety net is valuable and important in being there. So that's why one of the things we tell our clients all the time, who maybe are first-generation millionaires, and they've built the first generation of wealth in their family, make sure you educate your children well about what you did, how you did it, and how they should steward it when the assets pass on to them so they recognize those traits and characteristics that allow you to be successful.

16:11Well, I also think it's because you talked about the force field. I would say it's a separation of what you can generate time and income. Because I think a lot of people get in this trap, they think, just because they can earn a big income, that they're protected from a lot. And I always say more flexibility comes when your money or the resources you've built up through your discipline can start replacing all of your income. And so you control your time. You have that additional flexibility. It also creates a bigger moat of exactly like, Bo, you share with me all the time, is that when I get stressed out about something, you're like, what are you stressed out about?

16:46You can just go buy this repair. You can hire somebody to do that. And it's always good to be reminded that, yes, if you can build up enough resources, potentially you can solve a lot of the stresses, but you have to actually do the hard work. It's not fast. It's not an overnight thing. That's why you have to start early and often is because it's going to take a little bit of time to get that separation to where your money can actually work harder than you can and actually give you that flexibility and owning your time and having all those options. I have a really good buddy, Brian. He always frames it this way.

17:17He says, if you have a problem, but you have money and you could write a check to solve that problem, you don't really have a problem. It just takes time to get there and you have to make the decisions to be in the position to be able to use your money that way. Something I'm actively working through this year is my inability to let go of money, like hoarding money, saving too much money than what you actually need. I'm really good at that, But I have found that it's actually hurting me long term. That money sitting there in that savings account, even if it's a high yield savings account, is not doing all that much for me.

17:50And I knew this was a problem when I had difficulty moving money from my savings account to my investment account because I thought the money is safer with me in that savings account. That's the level I'm at. And I know where all of this comes from. Obviously, I grew up as an immigrant here and my parents came here with nothing. All they did was save and they got to a point of where they didn't need to keep saving. and yet they didn't work through that problem. And so I see how they live now and I don't want that to be me, okay? I don't want that to be me because I think money should be enjoyed at the end of the day.

18:23Of course, handle your business, but also enjoy your life. What in the short term feels safe can actually be risky. And what I mean by that is cash. It feels good to have cash in the bank like she was talking about, but over the long term, that is going to get eaten alive by inflation, purchasing power, it just doesn't do it. But then the things that in the short term are very risky, like investing in the financial markets and index funds and so forth, in the long term can actually be your best performing or less risky or more likely opportunity to create wealth. And this is something I can tell you growing up with modest, and I know you come from modest beginnings too, Bo, is I watched my parents be so good at saving money, but their idea of investing was CDs.

19:09And then I watched relatives or in-laws, you know, who just maybe weren't as disciplined with how they lived their life, but because they were putting a few hundred bucks a month into the fast rising stock or mutual fund of that time, their money was doing so much more, even than the hard work and the hard discipline that my parents or the household that I grew up in was doing. What I think is so interesting that she hit on is that money is nothing more than a tool. It's a tool that allows us to achieve the goals that we have in this life, but we need to make sure that we're using that tool in its highest and best use.

19:49We want the tool to be as efficient and effective as possible. So if one of the things you want your tool to do is help you build towards financial independence, you're gonna have a much higher likelihood of being able to achieve that by using investment accounts and low cost index funds and having a long time horizon then using that tool is something that just simply pads a savings account, earning a very low rate of interest. So if you're going to use the tool, use it in the best way possible. Well, I think also a lot of this is this is your first time. If you're somebody who's, maybe you're the first one out of your family that has a good income, and now you have that margin that allows you to use discipline to start saving and investing this.

20:27If you've never had it modeled for you, you don't know what to do. So you're probably figuring out, what do I do with my next dollar? I'm so worried. There's so much noise. There's so many people trying to get in my back pocket. What do I do? I'll tell you what you do. You go to moneyguy.com. And then even better, go to moneyguy.com slash resources. Let us love on you. Show you the free stuff that we give out to our audience because we know this stuff works. Go check it out and you will be that much better for it. And your army of dollar bills, before you know it, will be working harder than you can with your back, your brain, and your hands.

21:00I'm your host, Brian. For Mr. Bo, Money Guy team, out. Thank you.

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