Latest / Becoming Financially Confident / BFC Weekly Recap: Retirement Regrets, Scam Warnings, and Real Numbers (Aug 31 to Sept 4)

Transcript

BFC Weekly Recap: Retirement Regrets, Scam Warnings, and Real Numbers (Aug 31 to Sept 4) · Becoming Financially Confident

• 0:00
  Foreign.
• 0:15
  Listen, I understand.
• 0:18
  Like, I think there's an emotional component to that.
• 0:21
  Right.
• 0:21
  It's, you know, you're looking at your money, and if you open that statement, you see, oh, I owe this much on my credit card.
• 0:27
  Or like, oh, my gosh, I only have this much in my checking or my savings.
• 0:31
  I get that feeling.
• 0:32
  Feeling I'm also still there.
• 0:33
  Every time I need to open my banking app, I just, you know, eat a little piece of chocolate to make me feel better.
• 0:39
  Chocolate always solves all problems.
• 0:44
  Yes, yes.
• 0:44
  But I mean, something that Ralph and I, we even talked about, this episode, is like, you don't know.
• 0:49
  You can't improve on what you don't measure.
• 0:51
  And so it's one of those things that we're definitely going to talk about.
• 0:54
  And I want to be there with you, John.
• 0:56
  I'm going to also take a look at my last.
• 1:00
  I'll just start with one month instead of three months.
• 1:02
  You're just gonna look at 30 days.
• 1:04
  But even Julia, even looking at 30 days.
• 1:07
  Yeah.
• 1:07
  It is going to surprise you.
• 1:09
  Yeah.
• 1:10
  Because most people underestimate what they're spending by about 30%.
• 1:15
  I believe it.
• 1:15
  I.
• 1:16
  Ralph, over the last two weeks, I have canceled so many subscriptions.
• 1:20
  I'm like, I don't know why I bought you.
• 1:22
  I don't even use you.
• 1:24
  And I'm.
• 1:25
  Every time that happens, I get a little bit upset at myself.
• 1:27
  But it makes me a lot more cognizant about what I'm spending my money on towards the future.
• 1:34
  Like, I had one guy hadn't paid his car loan in six months, and I was chasing this dude down.
• 1:39
  I'm calling Grandma.
• 1:40
  Grandmas are great.
• 1:41
  Because grandma's would be like, he hasn't paid you.
• 1:43
  I'll get him to call you.
• 1:44
  He called me, like, the next morning.
• 1:46
  How did you get grandma's phone number?
• 1:47
  Oh, so that's what we do a little called skip trace work.
• 1:50
  So what we would do is we pull credit.
• 1:51
  We see who they lived with, who they were associated with, and that was my ace in the hole with collection work.
• 1:57
  I called grandma, and grandma would say, that rascal, he'll call you tomorrow.
• 2:00
  Well, anyway, this guy hadn't paid me for six months, Juliet.
• 2:03
  He calls me, and I said, listen, you haven't paid me for six months.
• 2:06
  Yeah, bring the car in.
• 2:07
  Surrender the car.
• 2:08
  He goes, well, Ralph, I need a car to continue to drive.
• 2:11
  I'm like, okay, well, let's work something out.
• 2:13
  And I did.
• 2:14
  I said, look, I'm gonna take all the money that you owe me.
• 2:16
  I'm gonna put it to the back end of the loan.
• 2:18
  What I need you to do is pay me every single week you mentioned.
• 2:23
  Is it too late?
• 2:24
  No, it's not too late.
• 2:26
  But, John, I have to be honest with you.
• 2:28
  You're starting off in a deficit position.
• 2:31
  You have a shorter window to where you can retire when you can put money into retirement.
• 2:36
  So you've got to be super practical.
• 2:38
  You've got to be very intentional.
• 2:40
  If you've got a 401k at work or your wife has a 401k at work, make sure you understand what your employer matches.
• 2:46
  What go do.
• 2:47
  That first is a great analogy.
• 2:49
  And Julie and I've talked about this before.
• 2:51
  It's kind of like you're walking down the road and you see a hundred dollar bill on the sidewalk.
• 2:55
  Do you bend over and pick it up?
• 2:57
  Well, if your company has a retirement plan where they match a certain percentage and you don't do that, you're walking over $100 bills.
• 3:06
  So you mentioned a 15,000 deductible.
• 3:08
  And this is for like a flat fee insurance.
• 3:11
  Right.
• 3:11
  Does it work?
• 3:12
  Kind of similar to health insurance, which means you have to pay for up to, I don't know, $15,000 worth of damage before the kicks in.
• 3:19
  Yeah, basically what they're saying is because.
• 3:21
  And I think the average flood claim is like $68,000 when they look at the numbers.
• 3:28
  I'll give you a great example this Juliette.
• 3:30
  When I was working in the credit union, I had a collector and he was putting out great numbers and I couldn't understand why.
• 3:35
  Then I finally realized it.
• 3:37
  He was such into this heart.
• 3:39
  He was paying people's loans for them himself.
• 3:41
  He was making money himself.
• 3:43
  Yes, he was doing it himself because he felt so bad for the situations.
• 3:48
  So that's the thing you need to understand.
• 3:50
  People want to help you.
• 3:52
  You just have to make that first call.
• 3:57
  So let's get into John's letter.
• 3:59
  This is what he said.
• 4:00
  I am a recent subscriber to your podcast and I am becoming a big fan.
• 4:04
  The Bible verses are a tremendous comfort in addition to your wealth of knowledge.
• 4:07
  My name is John.
• 4:09
  I'll be 50 in two months.
• 4:10
  I have always been good with money.
• 4:12
  The past few years have taken a huge toll on my family and I.
• 4:16
  Loss of family members, funeral costs, unexpected events, vehicle repairs, increase in everyday cost like fuel, energy, etc.
• 4:25
  I have never had an emergency count.
• 4:27
  Crazy.
• 4:28
  I know I am now more than ever looking to start one.
• 4:31
  I just feel like I am doing Something wrong?
• 4:33
  My wife and I are paycheck to paycheck at this point.
• 4:36
  We both have decent paying jobs.
• 4:38
  We have a 16 year old boy and I also have my parents living with me.
• 4:42
  I look at some of her friends and question myself and the man upstairs.
• 4:45
  I what did I do wrong?
• 4:47
  What can I change?
• 4:48
  Is there enough time before things get really bad?
• 4:51
  Things I am sure many families are dealing with.
• 4:54
  I can't afford a financial advisor currently as I am beyond overwhelmed with finances.
• 4:59
  Late car and utility payments.
• 5:01
  I'm working extra shifts trying to catch up.
• 5:04
  Every time I do, something else happens.
• 5:06
  I am doing my best not to give in.
• 5:08
  I just feel like there's no way out.
• 5:10
  I pray and read my Bible every day since the age of 13.
• 5:14
  I am Christian.
• 5:14
  That helps at our local church in any way I can.
• 5:17
  Yet I feel like I am failing every way I turn.
• 5:22
  Ralph, that, that's like so much to handle.
• 5:25
  I mean, John is going through a lot.
• 5:27
  Would you say that John is actually failing or is he just having an unusually difficult season?
• 5:33
  No, I just want to commend John for sharing that with me.
• 5:36
  Number one, that was an amazing letter.
• 5:37
  When I got that, I was like, you know, it's funny, we talk in the podcast, I have a lot of friends in podcasts and we talk about how do you stay engaged in podcasting.
• 5:45
  You get letters like that and it makes what we do every day worth it.
• 5:49
  So, no, John, you're not alone in this.
• 5:50
  You're not failing.
• 5:51
  You're actually.
• 5:52
  I think you're doing better than that because I think you're actually able to see with clarity what's really going on.
• 5:59
  And that's super important.
• 6:00
  It is.
• 6:01
  And I say this to people all the time.
• 6:02
  The number one thing is to have clarity about what's going on.
• 6:06
  About 15 years ago, when I was originally diagnosed with diabetes, the doctor prescribed the new medication and the local pharmacy we had at the time was called Happy Harry's, which is kind of a funny thing is this guy
• 6:17
  Harry, and he was happy all the time.
• 6:18
  It's now been bought out by Walgreens, but I never forget it.
• 6:21
  The pharmacist called me and the pharmacist said, ralph, listen, we got this prescription that was sent over by your doctor said, okay, is it new?
• 6:28
  It wasn't experimental drug, but new to me.
• 6:31
  And I never forget.
• 6:32
  She said, and it'll be $770 a month.
• 6:36
  Whoa.
• 6:36
  And I said, wait a second, I have insurance.
• 6:40
  Why is it so much?
• 6:41
  And she goes, well, it's Non formulary, it's non generic, all this kind of thing.
• 6:44
  And I said, okay, well what does the average person do who can't afford that?
• 6:49
  And she said, I'm give you an idea.
• 6:50
  She says, if you go to the drug manufacturer's website, you can actually sign up for their affordability plan.
• 6:56
  We didn't know that at all.
• 6:57
  Oh, I know you're sitting down, ready for this one?
• 7:00
  So I went to their website.
• 7:02
  Okay.
• 7:02
  And that drug, that was $770 a month, can I guess, signed up for their annual plan.
• 7:08
  It's now $25 a month.
• 7:11
  That's a huge jump.
• 7:12
  Yes.
• 7:13
  And so I said to the pharmacist, I said, well, what would have happened if I just paid the 770?
• 7:18
  She said, the pharmacy would have made a lot of money.
• 7:22
  My mom drives us to the dealership and here I am, this fat little 12 year old kid, got my little sister, she's three years younger than me and my mom's haggling for this.
• 7:30
  I'll never forget, she loved this car.
• 7:31
  It was a Pontiac Grand Am, four door.
• 7:34
  And I love the idea of four door because there's no more fighting to get in the car.
• 7:37
  We had that hatchback and my sister and I used to fist fight to be who was going to go in the front, who was going to go in the back.
• 7:43
  So we get into the car dealership, my mom finds this car she loves.
• 7:46
  I mean she's ogling over this car, she's like.
• 7:49
  And so the dealers are going, oh, we got a live one here.
• 7:52
  I could see the guy set the hook.
• 7:53
  And the second thing my mom did wrong is she told the dealer, and Again, this is 1993.
• 7:57
  She says to him, I can afford about $300 a month.
• 8:00
  That was her, that was her cap on payment.
• 8:03
  Yeah.
• 8:03
  So now she had violated two cardinal rules.
• 8:06
  And then she violated the third one.
• 8:07
  And I love my mom.
• 8:08
  She passed away a few years ago, but she wasn't sophisticated when it came to finances.
• 8:11
  And then she says, oh, I have this trade in.
• 8:13
  They looked at this trade in like, you might get 2000 bucks for that lady.
• 8:16
  Anyway, so we get to the point, she gets to the point, the card she haggled, negotiated.
• 8:21
  She gets to the point where she agreed, I'll pay 300amonth for this car.
• 8:25
  And I'm thinking, great, we're gonna get this new car and Ralph's going to Burger King.
• 8:30
  I'm excited.
• 8:31
  So, you know, we sitting with the sales guy, then we get pushed into the finance, the Finance guy's office.
• 8:37
  And the finance guy looks at my mom and says, okay, Mrs.
• 8:40
  He stepped.
• 8:41
  We've got everything put together.
• 8:42
  And I see the bottom line is your payment's going to be $412 a month.
• 8:46
  And she's like, no.
• 8:46
  I said, 300?
• 8:47
  Yeah.
• 8:47
  My mom looks at me and she's like.
• 8:49
  And she called me Ralphie.
• 8:50
  Not a lot of people get away with that.
• 8:51
  But mom could.
• 8:52
  She said, ralphie, they told me $300 in the other room.
• 8:55
  And I said, yeah, what's going on?
• 8:57
  So I look at the guy and I say, dude, what's going on?
• 8:59
  He goes, shut up, kid.
• 9:01
  So my mom's like an Italian.
• 9:02
  You don't say to an Italian mom, shut up, kid.
• 9:04
  That's not cool.
• 9:05
  So my mom goes, wait a second.
• 9:07
  And she goes, but, but the guy out there told me $300.
• 9:11
  And I said, yeah.
• 9:11
  The dude out there said $300.
• 9:13
  And the guy tells me again, this doesn't involve you, kid.
• 9:16
  Shut up.
• 9:17
  And I said, well, you're trying to play a game on my mom now.
• 9:19
  I'm 12 at the time, but I grew up around accounting.
• 9:21
  My dad's an accountant.
• 9:22
  So I knew numbers.
• 9:22
  I, those are my, my blessing and a curse, right?
• 9:25
  So I knew numbers.
• 9:26
  Yep.
• 9:26
  I said, so explain to me why the payment went from 300 to 412.
• 9:31
  Yep.
• 9:32
  And he finally realized he wasn't getting past this.
• 9:34
  He was going to have to explain this to me.
• 9:35
  But what they did was they added this insurance and they added that insurance and they added an extended warranty and, and they added all these things.
• 9:42
  I said, here's the bottom line, homeboy.
• 9:44
  I said, here's what's going to have to happen.
• 9:46
  My mom is going to pay $300 for this car because you made the deal out there.
• 9:49
  You figure it out.
• 9:51
  And he go, one of these kind of things.
• 9:54
  Yeah.
• 9:54
  Well, it turns out they had put her into a longer term.
• 9:58
  They gave her a higher interest rate because they could.
• 10:00
  Cuz she told them what she was willing to pay.
• 10:03
  Right.
• 10:03
  What did my mom end up paying for the car?
• 10:05
  $304 out the door.
• 10:06
  Oh, but see, this is the thing, like you go into there, you have to be armed with knowledge.
• 10:12
  That's what this show is all about.
• 10:13
  We want to give you knowledge to help you make better decisions.
• 10:17
  You also can refinance it, or like I said, you can roll it into another loan.
• 10:22
  But just understand, if you continue to do that and a lot.
• 10:25
  And listen, I'm guilty of this.
• 10:26
  I'm the accountant who should know better.
• 10:29
  But many times in the last hundred cars that I bought, I know it's probably not 100, but it's a big number.
• 10:35
  I would consistently roll those things into the next one.
• 10:37
  But you understand what I'm doing.
• 10:39
  I'm just pushing this pebble farther uphill and farther uphill, and the interest is getting bigger and bigger and bigger.
• 10:46
  And I'm taking the term and making it longer and longer, which is costing me more and long run.
• 10:50
  And here's the other scary side of that.
• 10:52
  So car A, I was upside down $7,000.
• 10:56
  So think about car B.
• 10:57
  I'm so excited I got in this new car, I'm driving off the lot.
• 11:00
  The car I just bought is worth 40% less because I already had the 7020% first loan.
• 11:08
  Now I've got the depreciation on car B.
• 11:12
  So that thing with that steep decline we talked about, it just got worse.
• 11:17
  It just got worse because not only did you lose 20% on the new car, you rolled $7,000 from the old car.
• 11:24
  So if you buy a $50,000 car, that's a $10,000 hit by plus seven.
• 11:29
  That's $17,000 that you're losing on day one.
• 11:33
  And a lot of people don't realize that.
• 11:35
  So they don't buy the Gap policy.
• 11:36
  They get into an accident, and now they owe more than what the car is worth, and they're out of luck.
• 11:44
  You also have to be cautious if someone asks for a payment by gift card.
• 11:48
  Like, you know, as soon as somebody says, hey, we're a charity, send us a gift card, Ralph's out of there.
• 11:54
  If they ask you for a wire transfer, charities are not asking you for wire transfer.
• 11:59
  Now, if you're donating a couple hundred thousand dollars, that might be a different discussion, but that's not what we're talking about here.
• 12:04
  And they're never going to ask you to donate with cryptocurrency.
• 12:08
  So if you get a text, you get an email, or even if you're at what's called the official website and they're asking for a gift card, if they're asking you for a wire transfer, or if they say, hey,
• 12:19
  you can pay this with Bitcoin, run the other direction.
• 12:24
  And so if you didn't watch that pre launch show, I do want to just make it clear because I did ask Ralph this question.
• 12:29
  Like, if you freeze your credit report, does that mean, like, if you go to Costco and you spend money on your credit card, do you have to unfreeze It.
• 12:38
  And the answer is no.
• 12:39
  The only reason why you would ever need to unfreeze your credit report is if you're asking for, like, a credit card increase, you're asking for a loan, you're opening a new credit line or bank account or anything like
• 12:50
  that, so you can still use your existing payments to pay for stuff that's not going to affect your credit report.
• 12:57
  Absolutely.
• 12:58
  Let's talk about this whole credit freeze thing, because I think I kind of laid that out, but didn't talk a lot about it.
• 13:04
  What you're basically doing is you're saying to the credit bureau, if anyone applies for credit, stop them.
• 13:10
  You're basically putting a stop sign up.
• 13:12
  I actually have a service where I do that for all of my credit reports so that if I want to apply for the loan, it's super simple.
• 13:19
  You go to their website, you remove the freeze.
• 13:22
  So let's just say, for example, we talked about getting a car loan today.
• 13:24
  Let's.
• 13:25
  Let's walk through this together.
• 13:26
  Let's say that you do this and you freeze your credit report on all three credit bureaus, right?
• 13:31
  Get to the car dealer, you negotiate the deal, you make the best deal you can, and they usher you into the finance manager's office, and he says, okay, Juliet, we need you to complete a credit application.
• 13:42
  At that point, you say, okay, no problem, but I need to pause here for a second.
• 13:46
  You get your phone out and you go to the credit bureaus and.
• 13:49
  And you unfreeze your account.
• 13:51
  Because what's going to happen is when that car dealer pulls your credit, when they go to look at the credit agency, if there's a freeze on it, they're going to get a stop sign.
• 13:59
  No, you cannot do this today.
• 14:01
  Cannot.
• 14:02
  It's going to say to them, there's a freeze on your credit report.
• 14:05
  So you can even ask them, say, which credit bureau do you pull?
• 14:08
  Because they're not going to pull all three.
• 14:09
  They're going to pull one.
• 14:10
  So let's just say, for example, you say to the finance person, hey, I'm going to fill out this application right now.
• 14:16
  Which credit bureau are you going to report?
• 14:17
  Oh, we're going to go to TransUnion.
• 14:19
  Fantastic.
• 14:19
  Get on your iPhone, get on your Android phone, get on your app, and go unfreeze your TransUnion report.
• 14:26
  Let them pull your credit.
• 14:28
  Then as soon as you're done with that, freeze it again.
• 14:30
  Because then if somebody you know who knows what could happen goes out to try to get credit in your name, they get the stop sign.
• 14:38
  So it doesn't affect you.
• 14:40
  If you're using your credit card, it doesn't affect you.
• 14:43
  It's only if you're applying for credit.
• 14:47
  So he came in, he's no longer.
• 14:48
  Qualified for poverty income.
• 14:50
  Correct.
• 14:51
  So he was outside the.
• 14:52
  And it's like a trap door.
• 14:53
  Once you go $1 over, you're done.
• 14:56
  So comes in, sits down to get his taxes done and we're plugging in all the numbers.
• 15:00
  And I said to him, so you got $18,000 last year in healthcare subsidies.
• 15:06
  You didn't qualify for any of those.
• 15:08
  So now you owe $18,000 on your tax return because you got these premium credits all year that you weren't entitled to.
• 15:17
  And he broke down in my office.
• 15:18
  I mean, this is a grown man crying.
• 15:19
  And I get it.
• 15:20
  Because he didn't have $18,000.
• 15:23
  He had affordable insurance that he couldn't afford.
• 15:27
  It's funny, before, before the show, I ran down the hall here and one of the ladies that works for me, name is Renee.
• 15:31
  And I said, renee, we're going to talk about side hustles today.
• 15:34
  We're going to talk about delivery driving.
• 15:35
  She goes, don't do it.
• 15:37
  And as you count.
• 15:38
  Well, I'm going to tell you why, because we've seen it with our own clients.
• 15:41
  It is very difficult to make money in this.
• 15:46
  Let's say you did a five hour shift working for one of these door dashes.
• 15:50
  And let's say you collected $110, which that's not bad for five hours.
• 15:55
  It's about $20 an hour.
• 15:56
  Right?
• 15:57
  But here's the thing.
• 15:58
  You got to understand, you drove 95 miles for that, right?
• 16:03
  So you got to figure out what is the cost of the car.
• 16:06
  Now, right now, the standard mileage rate, but the IRS is 78 and a half cents.
• 16:12
  So the IRS is already saying to drive 95 miles, it's costing you $73.32.
• 16:20
  So you made 110.
• 16:21
  Do quick math.
• 16:22
  I got enough fingers and toes for this 110, minus the 73.32.
• 16:27
  You've only got about $35 left over.
• 16:30
  Add on to that hour.
• 16:31
  Right.
• 16:32
  For five hours.
• 16:33
  For five hours.
• 16:34
  So for five hours we're about $32.35.
• 16:38
  Then you got to pay self employment tax.
• 16:40
  Self employment tax on that and it's based on the number is another $6.
• 16:44
  Yeah.
• 16:45
  So now you're down to $30.87 that you've made for five hours of work.
• 16:52
  Divide.
• 16:52
  So, so yeah, take that $30.87 divide by five, that means you're making $6.17 an hour.
• 16:58
  This is the part that none of these delivery drivers ever think about.
• 17:01
  The companies don't tell you this.
• 17:04
  And here's the thing.
• 17:04
  Let's just say you made $140 that same time.
• 17:09
  You have the same issue.
• 17:12
  I did the math for a particular guy.
• 17:13
  We figured out he was making $3.65 an hour for that whole shift.
• 17:19
  And I said, you could have went to McDonald's and asked, do you want fries with that?
• 17:23
  You could have went to Home Depot and got a job and made a lot more money.
• 17:29
  I have used buy now, pay later for places like Sephora and a couple.
• 17:35
  And I think it was after two or three months.
• 17:38
  And I would see this because it's on my monthly credit card, Right.
• 17:42
  Because I got to pay my credit card off.
• 17:44
  I was disappointed in myself, and I was like, I don't like this feeling of ickiness.
• 17:50
  I don't want to do it anymore.
• 17:51
  I need to figure out how to get out of this habit.
• 17:54
  Yeah.
• 17:54
  And that's the thing, is it becomes addictive.
• 17:57
  And we talked about predatory lending, and that's the answer to the question.
• 18:00
  Because if you're in a good financial position, unless there's an incentive to do it, you're never going to do it.
• 18:08
  63% of people had multiple loans at once, averaging nine and a half loans a year.
• 18:15
  61% of these were at subprime or deep subprime rates.
• 18:20
  26% of users paid late.
• 18:22
  11% triggered an overdraft on their account.
• 18:25
  So that's why this is such a big problem.
• 18:28
  And because it's like I call it, death by a thousand cuts.
• 18:32
  All right, you ready for the sound bite of the day?
• 18:34
  Because I'm getting ready to drop it.
• 18:35
  What is it?
• 18:36
  Your renewal is a price.
• 18:39
  It's not a verdict.
• 18:41
  It's an offer.
• 18:44
  Hear me on this.
• 18:45
  All of us make financial mistakes.
• 18:48
  I'm the accountant.
• 18:49
  I spent 30 years telling people what to do.
• 18:52
  I spent 30 years telling people to save.
• 18:54
  Early start for retirement.
• 18:56
  Well, here's a true confession.
• 18:58
  I didn't put a dollar away from my own retirement Till I was 47 years old.
• 19:05
  Here's the first lie I sold to myself.
• 19:07
  And you may be thinking the same thing.
• 19:09
  I'll get to it.
• 19:10
  You know, it'll happen.
• 19:12
  I'm just a young guy at this point.
• 19:13
  And the years were just ticking.
• 19:16
  And, you know, I never decided to save.
• 19:18
  I didn't decide not to save.
• 19:21
  I just never decided to do it.
• 19:23
  Yeah.
• 19:23
  So if you're in that same feeling right now, I want you to hear me loud and clear.
• 19:28
  Someday is not a date.
• 19:31
  It's not a date you can put on your calendar.
• 19:33
  It's never going to show up on your calendar.
• 19:35
  So that's the first lie.
• 19:36
  And I told myself this lie for many years.
• 19:38
  I've made good money since I was 20 some years old.
• 19:41
  I'm going to show you some charts here in a few minutes and we'll share the charts to our community.
• 19:45
  But that's the first lie.
• 19:46
  Second line.
• 19:47
  And I bet a lot of people raise their hands right now because I used to say this every month.
• 19:51
  My wife would say to me, hey, are we putting anything into retirement?
• 19:54
  Yeah, you know, there's just not anything extra this month.
• 19:57
  We're raising two young kids.
• 20:00
  Well, here's the truth.
• 20:01
  There's never going to be anything extra.
• 20:04
  Yeah.
• 20:05
  Extra is not a thing.
• 20:07
  Extra is something you create, it's something you intentionalize.
• 20:10
  It's say, I am going to do this.
• 20:12
  It's not going to be something that arrives.
• 20:14
  There's no right period of that.
• 20:18
  And the thing that I found in my practice, the people who actually save aren't the people with extra.
• 20:25
  The people who save are people who build a pattern, they build a habit, and that's the difference.
• 20:30
  And I kept saying to myself, oh, you know, there's nothing extra this month.
• 20:34
  You know, the kids need this and we need this and we just never got to that point.
• 20:38
  Yeah.
• 20:39
  Now the third lie.
• 20:40
  And then I'm going to let Juliet ask some questions.
• 20:43
  Here is.
• 20:44
  And this was a tough one for me too, because I share with you my health journey.
• 20:48
  Type 2 diabetes, high blood pressure.
• 20:50
  I didn't really care about my physical being because I was like, I'm living for today.
• 20:54
  So the third lie I told myself is I might not even live that long.
• 20:58
  It's like I wasn't planning to go away, but in a lot of ways I was gambling and I was betting against myself.
• 21:06
  And one thing, if you learn about gambling, don't ever bet about against yourself.
• 21:11
  Yeah, that's true.
• 21:13
  And here's the thing, and I'll share some of these numbers here in a second, but a 65 year old man today, if you're 65, you're listening to me or watching me right now.
• 21:20
  If you're 65, you could live another 17 and a half years.
• 21:25
  One in four people who reach 65 are going to live past 90 now.
• 21:29
  And that's a great thing.
• 21:30
  That's a fantastic thing.
• 21:32
  Yeah.
• 21:33
  The risk was never dying at 70.
• 21:36
  Yeah.
• 21:36
  The risk is living to 92 and not having anything to show for it.
• 21:43
  If I had started at age 27 and I put $500 a month into a retirement account, and let's just assume a 7% annual return in 40 years at age 67, I would have $1,310,000.
• 22:00
  That's a big number now because I waited to start till 47.
• 22:04
  If I put that same $500 a month in at 7%, 20 years, compounding to 67, guess how much money I have then?
• 22:14
  $260,000.
• 22:16
  So this decision to not start till I was 47 cost me $1,050,000.
• 22:23
  That's the real number.
• 22:26
  And then the second time I almost got scammed was actually through Facebook Marketplace because I was trying to sell a bunch of stuff.
• 22:32
  And it was.
• 22:33
  It was.
• 22:33
  I was trying to sell technology.
• 22:35
  It was have like a.
• 22:36
  A bunch of old.
• 22:38
  What are they called?
• 22:38
  Like, routers.
• 22:40
  And routers.
• 22:41
  A lot of routers.
• 22:43
  And what they did at that time was, oh, they wanted to send money.
• 22:49
  Oh, this is related to Zelle.
• 22:51
  They wanted to send money through Zelle.
• 22:53
  And I said, we're not scheduled to meet in, like, two days.
• 22:58
  I don't want your money right now because I want to see the person to do this right?
• 23:01
  And then they go, oops, actually, I just already sent it, so, like, then can you give the money back?
• 23:08
  And I go, look.
• 23:08
  And I'm like, I didn't get anything.
• 23:11
  And then they.
• 23:12
  Again, emotional manipulation.
• 23:14
  They're like, oh, my God, this is really bad thing.
• 23:16
  I'm gonna call my bank account right now, and there's like a whole problem.
• 23:20
  You have to ask your bank to, like, return the money.
• 23:23
  That is not how Zelle works.
• 23:24
  I think we need to have another conversation about that.
• 23:26
  That is not how Zelle works.
• 23:27
  Okay?
• 23:28
  Zelle does not have a customer support line.
• 23:30
  Your bank doesn't take any.
• 23:33
  Take any.
• 23:34
  What is it, like, accountability, Responsibility for mistakes that happened through Zelle.
• 23:39
  And so I basically got caught up in this, like, three hour conversation with these scammers.
• 23:45
  And afterwards I was like, nah, I feel like once I got to calm down, I was like, I feel like you guys are manipulating me right now.
• 23:52
  And so it's not true.
• 23:55
  Goodbye.
• 23:56
  And then all the messages stopped.
• 24:00
  What happened was I was meeting with a client, husband and wife, and the husband had just gotten diagnosed with early onset dementia.
• 24:07
  So he had Alzheimer's, and him and his wife had saved nothing.
• 24:13
  I'm Talking about, they are 65, 66 years old.
• 24:16
  They were relying 100% on Social Security.
• 24:19
  Now, fortunately, they had their house paid off.
• 24:21
  Okay.
• 24:21
  But they sat at my desk, and here the husband.
• 24:25
  And nothing he did to cause it.
• 24:27
  It was just one of those things.
• 24:29
  And the wife just sat there and sobbed.
• 24:32
  And she said, ralph, for so many years, we went on trips, we bought what we wanted, we helped this one out, we helped that one out, but we never put away for ourselves.
• 24:41
  And she said, now I'm sitting here.
• 24:43
  And I was crying, too.
• 24:46
  Like, that's the kind of person I am.
• 24:47
  And she goes, my husband needs to go into a facility because I can't help him anymore.
• 24:53
  And she says, the only thing we can do is sell our home and use everything that we have so that we can spend it all down so he can qualify for Medicaid.
• 25:03
  Wow.
• 25:04
  And when she said that to me, I said, ralph, here you are.
• 25:08
  I was like, 47, 46 years old.
• 25:10
  You make good money, dude.
• 25:11
  Like, why are you putting yourself into this position?
• 25:15
  So that was the thing that really changed me because I saw it all around me, but yet I hadn't done anything about it.
• 25:21
  And like I said, this is a very vulnerable thing.
• 25:23
  And listen, money things are vulnerable.
• 25:25
  I get it.
• 25:25
  I tell people this all the time.
• 25:27
  People share with me stuff that they don't share with their spouses.
• 25:33
  Most money issues are not about math.
• 25:36
  This is an accountant saying this.
• 25:37
  I'm an accountant that hates math.
• 25:39
  But, you know, I love people, and I love relationships, and I know this.
• 25:45
  Your relationship with money is an emotional relationship.
• 25:48
  Yeah.
• 25:49
  That's what you need to cure.
• 25:53
  So what's going on here is people are saying that they're government agencies.
• 25:57
  They're saying they're a law firm.
• 25:59
  They're saying there's some consumer group.
• 26:01
  And they're saying to you, we realized that you were the victim of a scam.
• 26:05
  And they're saying to you, you know what?
• 26:06
  If you'll send us a small retainer or if you'll send us a processing fee or what they call an administrative fee, we can help you get your money back.
• 26:16
  And then the next thing they ask you for is your bank information.
• 26:20
  Not a good thing.
• 26:22
  You can forget that.
• 26:23
  You know, you just.
• 26:24
  There's no reason to do this.
• 26:27
  And I'm going to tell you, I'm going to use a mean word here.
• 26:30
  And what we're talking about here is sucker lists, because that's really what we're talking about here.
• 26:36
  People are getting hit once, getting put on the target on your back.
• 26:39
  So they're coming after you again.
• 26:42
  Yeah, here's the rule for this.
• 26:44
  And there's no exceptions to this.
• 26:46
  Rule 0.
• 26:48
  No legitimate recovery service is going to ask you for money up front to get your own money back.
• 26:55
  I've often said this to people.
• 26:57
  If we ever gave people their gross pay and their paycheck just one time, you would see revolt in this country because people would say, what?
• 27:05
  How much do I get?
• 27:06
  Because here's the thing, Juliet, people are so used to living on the net, they have no concept of what the government takes and what all the insurance pieces take and all those things that go into your paycheck, that
• 27:19
  if you ever got your real paycheck, you'd be like, what in the world?
• 27:23
  This is all this stuff that's been going from my account.
• 27:25
  It's a big deal.
• 27:26
  It really is.
• 27:29
  So the first question is what she was asking is, if I do that, Ralph, because the lender's offering this, right, Is that going to trigger a tax issue?
• 27:37
  Is that income?
• 27:38
  To me, the answer is no, that's not income to you.
• 27:41
  Because you're borrowing against your own equity.
• 27:44
  When you do that, two things are going to happen.
• 27:47
  You're going to get the money, and the second thing to happen is your loan balance is going to go up.
• 27:53
  What's interesting about what they've said is that it's actually going to make their loan payment go down.
• 27:59
  So here's the part that they're not getting.
• 28:02
  And it's kind of a sneaky thing because what's going on here, they've been paying faithfully for 10 years, let's use an example, and they're paying extra payments every month.
• 28:11
  So actually their principal is going down.
• 28:14
  What the lender is basically saying, and this is the part that nobody wants to talk about, the lender is going to refinance that loan.
• 28:21
  And instead of them owing only 20 years left on this loan, it was, let's say it was a 30 year loan from the beginning.
• 28:25
  30 years, a kind of a common mortgage.
• 28:28
  And now they've got 10 years paying, so they only owe 20 more years.
• 28:31
  Okay?
• 28:32
  What the lender is basically saying to them is, hey, you can take some cash out, go have fun, do what you want with it.
• 28:38
  And here's the best part.
• 28:40
  We're going to make your payment even less than what you're paying now.
• 28:43
  Okay, here's how they're doing that.
• 28:46
  They're refinancing the loan and they're making it a 30 year loan.
• 28:49
  Again.
• 28:50
  Oh, see, that's the tricky part.
• 28:52
  Yes.
• 28:53
  So what they've done is they the bank or the lender has just made a lot of money because now you're going to start paying back on the bigger loan balance for a longer period of time.
• 29:03
  So all the work that you did to get that loan paid down, those extra $200 a month payments, all of those things are going to be washed away because you're going back to a 30 year mortgage.
• 29:16
  So I said to the lady working the register, I said, so tell me what's on your cheesesteak?
• 29:22
  And she turned around to the guy who was putting them together and he said it was just a plain cheesesteak.
• 29:27
  So I'm thinking, okay, great.
• 29:28
  So it's a plain cheesesteak.
• 29:29
  Because I didn't know if they were gonna put something I didn't like on there.
• 29:32
  I mean, I like most things, but anyway, order the cheesesteak, get my food.
• 29:36
  My son got a couple hot dogs.
• 29:38
  I got a soft pretzel.
• 29:39
  I love soft pretzels.
• 29:40
  So I go sit down.
• 29:40
  I was like, oh, I'm gonna put some ketchup on my cheesesteak.
• 29:43
  So I walk over to the, like the condiment bar and I open up this cheesesteak and I'm thinking, this thing has mushrooms on it.
• 29:50
  Now I've had mushroom cheesesteaks before, that's fine.
• 29:55
  I would have been nice if they told me that since I did ask what's on the cheesesteak?
• 29:58
  And they said, nothing, it's plain.
• 30:00
  So I said, okay, well you know, obviously it's got mushrooms on it.
• 30:03
  So I take a couple squirts to the ketchup thing and I put it and walk back to the table and I take the first bite.
• 30:09
  They cut it in half.
• 30:09
  I take the first bite of this thing and I'm thinking, wow, there's a lot of mushrooms on here.
• 30:14
  So I got about halfway through it, I'm thinking, man, there must be some thin meat on this thing because I'm not tasting any beef and I raise beef so I know what beef tastes like.
• 30:23
  Yeah.
• 30:23
  So then I.
• 30:24
  We're sitting in a place where I can look over at the board, like the menu board, and I look over there and I see cheesesteak.
• 30:30
  But what I didn't notice before that is there's a line above that, and the line above that said vegetarian cheesesteak.
• 30:38
  Vegetarian mushroom cheesesteak.
• 30:41
  And I'm thinking, oh boy, sit down, look back at this sandwich.
• 30:45
  And my son goes, dad, that's disgusting.
• 30:48
  My my son's not a big mushroom person either.
• 30:51
  Now, I'd already spent $12 on this thing, so I'm like, I'm hungry and I need to eat.
• 30:56
  So we were just.
• 30:57
  There wasn't a whole lot of people there.
• 30:58
  And I hollered over to the lady.
• 30:59
  I said, I wish you'd have told me this is a vegetarian.
• 31:01
  She goes, of course it's a vegetarian cheesesteak.
• 31:04
  I said, well, those two names don't even make any sense to go together.
• 31:08
  How do you have a vegetarian cheese?
• 31:13
  I'm just going to correct something you said, and I don't think you meant to say it.
• 31:16
  That's just the cost of daycare alone.
• 31:18
  $16,857 a year per child.
• 31:24
  And it's.
• 31:25
  I see this all the time in my tax practice because people come in and get their taxes done, and one of the things they can do is what's called a dependent care expense.
• 31:32
  They can do flexible spending.
• 31:34
  These numbers are getting huge.
• 31:36
  Like, I've got clients between two kids that are paying a mortgage or more.