Why Everyone Is Drowning In Debt (and how to get out) - Caleb Hammer - #1123

how do you describe what you do for work depends the viewer if i'm talking to the nice little church lady i'd tell her i'm helping helping young folks and some old folks with their money i'm just talking to just random person on the street i'd say i'm yelling at a bunch of retards who suck with money and roasting them along the way and having a lot of fun doing it i was gonna ask why you get death threats but you've kind of precluded that i mean i don't understand like okay if you come on financial audit you would come through a multi-week onboarding process and give me all these things like let's pretend you didn't want to me to make fun of your curly hair for whatever reason you would tell me that you would tell the producers that because we ask you in advance yeah yeah so we don't bring it up so and then i get consent to make sensitivity about exactly so why get death threats for making fun of things that someone gave me explicit permission to make fun of makes no sense it's the being offended on behalf of someone who's not offended i will never get it i'm not the person i've never been that person i don't understand it the white knighting yes yeah the the moral hero the you're on your moral horse and i don't know you want your tiktok community to raise you up i guess it makes you feel good you get views it's one of the my least favorite categories of people are those that their morality stands on the shoulders of other people that they're saying are worse than them but don't look at how good i am because i don't want that scrutiny on me just look at how bad they are and implicitly that makes me feel like a person that's of higher moral standing it's pretty yeah we had um when we were filming this episode we had a guest on on our episode that uploaded yesterday and i brought in one of my co-workers employees also friends tyler black dude big black dude very intimidating could beat the shit out of anyone and like the guy where you were sitting is a piece of shit racist like an actual racist he was like did you do this on purpose a cast him you brought a black person in with somebody that you knew would be racist so the guy was sitting where you said and he said you know i'm one of those people that says things that need to be said and i was like okay pause brought in the guy that he would actually have a consequence oh right yep yeah and he was like uh yeah n word so i just said that but you know what he consented to it obviously i wouldn't have my friend go through a situation he didn't like he even reacted to it on his own stream later that day he loved it no he just loves being called the n word gets off on it no black we scoured the internet no black person was like offended anywhere but there's a lot of white women that were super offended on his behalf saying that he should sue the show for having to go through that that's workplace harassment and all this stuff when he's friends we're i'm friends with him we're literally just having fun together making fun of the dude that was a piece of shit in front of us he and i were on the same team having a good time and it was just white ladies upset on the internet kind of blows my mind that people want to step into that environment because it's very intense it's not opposite someone originally it's one-on-one and then it's one-on-two but there's also maybe someone behind the scenes and you know that there's all of these people on the internet that are going to see you do this thing the psychology of someone that's prepared to go on a show like that and go head-to-head with someone on their home turf and be an asshole it's kind of impressive it is it is almost impressive i don't think that i would be very good at if i was an asshole doing that and being on this side it's like if you are an asshole by design i'm usually trying to keep it quiet so people don't realize people aren't advertising that assholery up front but that's what makes it fun though is that anyone who's seen our show or anyone who comes on the show has seen the show so they already know i'm an asshole then they watch it sent to them when they have to watch in the green room and i'm like hey i'm an asshole i'm gonna make fun of you i'm gonna yell at you telling me what you don't want to do so honestly besides that piece of shit racist because i actually don't like someone who's actually racist um every other guest that has come on the show practically other than a few here and there i respect the fuck out of because yeah that's crazy showing up to a show that a lot of people are gonna see that you're gonna get goofed on but they also do get resources and the vast majority do change their lives for the better afterwards that is the fun effect of it and i'm they get to go through the whole cycle with us and i think it would be crazier for them to sign up if everything no matter their say was on display since they get to say what they don't want to talk about it gives them more control which if there is something that actually would impact their life or their job or their family they can call that out and not have that in the episode so they do have that level of control but they're still very brave and i have a huge amount of respect for them what is the process of getting access to somebody's financials and how do you they haven't kept something super secret behind the scenes that they haven't shown you right well it would be difficult for like a checking or savings account but we do get them to send us their credit karma with you know important things bleeped out what's that their credit karma oh credit karma well it basically shows your credit report for the most part i mean it's kind of simulated it's not perfect you're not getting your like requesting your three free credit reports every single year or whatnot but um it's the app that many people use to actually see what's going on and the impact of their new debts they're opening their hard inquiries everything like that but if we get them to send their screenshots that way we can see if there's debts that they don't even know about because oftentimes there are debts that they don't know about collections that they don't know about so we're able to hold their feet to the fire that way do you think it's genuinely harder for young people today or are expectations the problem it's harder to do certain things i mean you're not going to be able to do the single income household thing like that's going to be there's going to be harder things right that's going to be harder buying your first home is going to be harder um you know getting your first car might be harder it depends you know how you do it that one's definitely a hit or miss for sure um that that's going to be harder but being independent in terms of groceries or rent or getting a comfy office job that is relatively decent paying like we've never had it better than ever before now you can take a snapshot in time this year this period in exact time yeah for college graduates it's objectively shit that's just an economic situation not a general uh generational situation because five years ago college graduates had a great they were entering the best job market in the history of humanity essentially when that pandemic money was just flowing from tech companies anyone could get a job but now it's objectively not but that's a period in time not a generational thing so the cost of practically every category of life spending as a percentage of income has dramatically dropped since the 1950s besides a few things that are very important buying a house health care and borrowing for school borrowing for school do you have to do that you know there's different paths we can talk community college we can talk apprenticeships trade schools okay so there's flexibility there house you don't have to buy a house when you know if you're a young person right now you don't have to in the and even if you do that actually might be a worse use of your money than in just investing in the s&p 500 health care yeah that one's fucked control that one that's a mess so if something bad happens to you what's happened to the cost of health care over time oh it's just endlessly there are premiums and if an emergency happens health care is one of those issues that's actually really interesting when it comes up on the show because i get very invested in trying to learn as much as i can about the personal finance categories across the board but for health care for some reason i've just missed it because this is one of those things that was never my passion so i never fully dove into the reason the why and how i just make sure you know i have the general necessity the the things that someone would need to make sure they're getting a halfway decent plan through their job and whatnot making sure their premiums aren't completely out of control that they can afford their co-pays that they have their highest deductible taken care of in the case of an emergency but speaking on the cost of health care you know this is that's definitely out of all things in the financial world not my expertise and i said i said that on another podcast that hasn't come out yet and now that it's come up in two podcasts in a row in a row i'm just you know i need to educate the fuck out of myself on health care because it's very curious because housing you talk about housing all day cost of college and school i could talk about that all day but not health care it's one of the big three one of the big three housing health care school you know a lot about the first the first and the last but because it's a lot more that you can control so i'm interested in the things you can control it's very difficult for people to be able to control their actual health care situation whether or not they have a pre-diagnosis or there's only a few plans off getting to an accident exactly but school and housing there's a lot more control and financial audits more about what things you can control it's interesting that you said as a percentage of earnings the cost of living in almost all areas including fun has become more affordable yeah except for three that are fucking massive massive and those three have done so much damage that they've managed to basically net detract from all of the gains that were made in everything else yeah i mean it's pretty brutal but again with the two that i can speak on a little better house you don't have to buy a house so you have more choices there you don't have to buy a house fresh out of college you don't have to go when it comes to the cost of school there's so many different paths that include going to school and that's local four years that's community college that's not going to private institutions or going to your dream school because it has the sports team you're like it also has to do with if cost of college is high you need to make sure you're getting a degree that has an appropriate return on investment. So there's lots of choices there. So those three categories are pretty brutal, but of two of them, you still have choice in it. Gen Z borrowers are carrying more credit card debt than millennials did at the same age, despite growing up with more financial information than any generation before them. 98% of Gen Z say credit is important, but only 53% believe they have adequate access to it. And more than half of Americans have used buy now, pay later services. 59% of those users were Gen Z. Oh yeah, that makes sense. Paying for Klarna, everything. It's a very Gen Z thing. Tap to pay, super easy to use those. They're at every checkout for any concert you go to, pretty much anything you want to do. So that's not surprising. There is, I'm forgetting the term off the top of my head, but it's something like doom loop or something that a lot of Gen Z is kind of getting into where mostly because of the information out there, it's like, oh, I don't know what to do. I don't know what to do. So it makes sense. It seems to me like a big part of it is people being so unsure about the future and feeling like things are not going to get better that, well, fuck it. It's almost like the end of days. You know, there's this interesting story about during the blitz in World War II in London, the amount of casual sex that people were having went through the roof, but lingerie sales, stayed the same. And it was just, people thought, look, I might die tomorrow. It doesn't really matter about how sexy I look in bed. Let's just get down to it. And it's kind of the financial equivalent of that. I'm just going to dump it all, which is this weird sort of a recursive system. It's this self-reinforcing mechanism that if you have negative information about the economy and about the quality of life for young people and about how hard you've got it and the fact that it's never going to get better, that encourages people to behave in a way that makes the thing true. Yeah, absolutely. It's kind of wild. And it's reality. It's a self-fulfilling prophecy that kind of gets not made out of nowhere. There are real material changes, but it's certainly worsened. And it's tracked. The University of Michigan does consumer sentiment survey on that. I think they've done it since the 1980s. And right now is one of the three lowest we've ever had. I think it was right when COVID kicked off, the Great Recession, and now. But now is not even near Great Recession in any other indicator anywhere. It's not right when COVID kicked off. When everything shut down and no one knew what was going to happen. But consumer sentiment is basically at an all-time low. What do you think's going on? Well, we are stuck in those algorithms. You make money on negativity. I have a documentary channel, more of a passion project, not much of a moneymaker called Front Page. Still getting the feel of it. But either way, the reality is the topics that are interesting to talk about are the more negative ones. Super positive content. Super positive content isn't as interesting to talk about for whatever reason. I'm not interested in learning about super positive. I'm not interested in talking about super positive. It doesn't feel urgent. No, exactly. So that's the information that's getting out there. That's the information that catches people's attention, keeps them in the algorithm. So I'm not surprised at all. I mean, nightly news, other than one fluff piece, is usually just negative, negative, negative. Even about the heat outside, it's like the apocalypse. It's always just negative. So it's not surprising. That's what drives our attention. It's what drives the algorithm. So consumer sentiment will, of course, be lower. Right. And that is impacting people's behavior, which actually brings that reality, brings that imagination into reality, or brings the news feed into your finances. Pretty interesting. Yeah. Even though consumer spending is actually relatively healthy overall. This isn't the best year in our economy, but it's also not even close to the worst year. Things are relatively healthy. There's some bad things like a called out. There's the new graduates, bad job market for new graduates. And there's a lot of bad things. There's a lot of bad things. There are a lot of things at play there. There's the nervousness of AI. There was the overhiring during the tech boom, during COVID. They've cut back there. And if there's no people leaving their jobs voluntarily, there's no jobs opening. And the people that are leaving their jobs in techs are the one getting laid off, and they're not rehiring someone who's getting laid off. So those job openings that were there during the pandemic aren't there. So there's actual negative things happening right now, but it's not the overall economic situation. We're still having okay GDP, but we're still having bad things happening. growth post inflation um warren iran done allegedly we'll see is it he signed the uh idea of peace or something yesterday and so did iran the leader of iran that's like a guy with erectile dysfunction saying i've signed the idea of erection today yeah signed the idea of a penis i want to get you to react to a financial case here can we pull up that tiktok i've had such a bad financial burden the last couple years so after meeting with attorney and doing lots of research i realized that filing bankruptcy really isn't as bad as it's made out to be and it was truly going to be my best bet i decided to file chapter seven and you know truthfully my consumer debt really is not that bad a lot of people have it a lot worse financially but for me ninety one thousand dollars was just too much it was uncomfortable and i just wanted to get a fresh start i moved to texas directly after high school and i made a lot of very irresponsible decisions financially and really dug myself into a big hole of debt i decided let's go ahead and file bankruptcy let's get myself out of here and i'm going to file bankruptcy and i'm going to file bankruptcy a clean slate that way i can stop stressing and i can actually do better okay just to give you a little breakdown of the debt that i do have that totals up to ninety one thousand three hundred dollars i owe about fifty one thousand dollars on the vehicle that i have we did try selling that trading it in all that good stuff but way too much negative equity to come out on top i bought a motorcycle back in 2022 thought that was a great idea um fucking americans tried selling it not able to get what we owe out of it and i do own a camper and i owe about thirteen thousand dollars on that she's retarded because i can't afford a house um so i am keeping that since i do live in it i have twenty two hundred dollars worth of medical bills that i had no idea were in collections and then i have twelve thousand dollars worth of student loans however those do not get forgiven with bankruptcy so i will still continue that payment and then i have about seventy seven hundred dollars worth of credit card debt all coming into a grand total of ninety one thousand three hundred dollars first of all okay yes it is harder to get into a home now yes a lot of large sum payment is difficult to get to uh interest is not great on our house how in the world does she think she's possibly possibly going so i don't mean to scream at you you're not a guess on my show why does she think in in what world does she think she is ever going to get to home ownership if she's getting camper motorcycle in a fifty thousand dollar car fifty thousand dollar car when she's moving to a brand new state this is this is so american we are so debt brainbroken and she's actually right i mean bankruptcy is actually right i mean bankruptcy is actually not that hard not that brutal a little expensive but it's really not the worst it fucks your credit for a bit and it's not a good learning lesson people usually end up in the same situation they are without changing their behavior before going through bankruptcy so but she was right on that but how did she ever expect she can't get sympathy of not buying a house if she's getting a camper motorcycle and car of which minimum repayments on the camper on the motorcycle and car are likely over a thousand dollars together like a thousand dollars going against anyone's income and unless you're like in the top one percent is going to aggressively prevent you from saving anything remember she can get an fha loan on her first house she can get what is that as low as 1.5 percent something like that down on your first house um how would she how is she surprised you can't get anywhere and that also is really stupid getting a trailer instead of renting an apartment because she's she's getting debt on a depreciating asset it's almost even worse because an expense could pop up have to get new tires she has to pay rent anyway likely to park somewhere and get the utilities plugged in no she's america summed up what are the hidden costs of bankruptcy that no one wants to talk about uh i mean usually it costs a couple thousand bucks to go through it go through the process and get a lawyer on your side um some court filings um there is the credit impact there is a credit impact seven to ten years depending and with that that could really make it more expensive to get in to an apartment because that's usually instead of just a security deposit you might have to do first month last month that includes that includes rent not just buying yeah yeah just rent right instead of just doing a security deposit like someone with a decent credit score you might have to do first month last month as well which makes it very burdensome to get into an apartment but you're in a risk you're a riskier person you have bankruptcy and a lot of people have apartment collections so it's not surprising they would request that um you would have to get into a predatory car loan if your car breaks down you don't have money you have to get a twenty-five dollar loan and then you have to get into a predatory car loan if your car breaks down interest rate car just on a horrible like eight year term and it's probably some piece of shit car that you buy for 20 is worth 15 before it's even driven off uh then the credit cards you get you're not getting the the good intro zero percent cards you're like you're getting credit one cards at 29 with monthly fees even if you pay on time so you just get access to worse services in the personal loans and again like i said the most important thing bankruptcy doesn't actually fix anything unless you fix your behavior because just like consolidating your debt or transferring to another credit card or um even letting things go to collections and negotiating them just like just like all those bankruptcy if you do not change the your behavior that got you into that situation in the first place you will literally end up right back there again in a few years we've had we've had quite a few upper-aged people on our show that have been through bankruptcy multiple times and now they're heading there again because it changes nothing. most people have no idea where their testosterone levels sit but what if i told you there was a solution something that identifies low t faster than a high school bully and it won't cost you all your lunch money that's where function comes in gives you access to over 160 lab tests including a deep dive into your full hormone panel every result is reviewed by clinicians anything out of range is flagged you get clear explanations with a personalized protocol with actionable next steps so if something's off you know exactly what to do about it whether you just need to go to the gym more or you need to play creed louder in your car function will tell you exactly where your testosterone and everything else stands normally this level of testing would usually cost thousands but with function it's 365 a year that's one dollar a day to stop guessing with your health and start knowing and right now you can get 25 off bringing it down to 340 bucks so get the exact same blood panels that i do and save 25 dollars by going to the link in the description below or heading to functionhealth.com slash modern wisdom using the code modern wisdom a checkout what's the biggest misconception people have about why humans end up in debt um well a lot of it and it's not necessarily a misconception but it's the wrong way to look at it is because of an emergency like yeah if you have zero dollars something happens you would have to probably go into debt for that but people don't look at what happened before then they were living their lives and spending whatever they wanted on fun they never saved up even a one month emergency fund or a highest deductible coverage they didn't save up anything so of course when an emergency happens you're going to go into debt but it wasn't the emergency that did that it was you living your life not saving up even a three month emergency fund which i would recommend six by the way but it's not saving that got you into that emergency debt not the emergency itself it was your behavior before that emergency yeah it seems to me like a lot of financial success it has a knowledge component of understanding the physics of the system but a huge part of it is emotional regulation what's the relative amount of knowledge versus emotional regulation when it comes to being good with money depends where someone comes from i mean so i'm in a place of privilege now you could say i have information and yet i look like this i know what it takes to lose this this is now this is this is i have the knowledge this is all behavior at this point i got the tits i got the tits because i'm choosing that some people pay for them some people do i would pay to lose free yes i'd pay to lose them but instead i'm just not doing the work that would be required to lose it i have the knowledge don't have the behavior yes so there are people in those financial situations there are going to be the people that come from a very different life incredibly low income no opportunity in their neighborhoods no people to look up to maybe even bad internet so they don't even get to watch the same podcast as us don't have a good library to go read a good personal finance book um and i don't want to just victimize someone or infantilize someone but there are harder situations to come from it doesn't mean they can't get out of it it just might be a little more difficult and you need to surround yourself with the right people do you find it difficult when somebody comes in front of you and a lot of the time it is because of decisions that someone has made and there's illustrious uh like tailwinds that you've had to deal with and you've had to deal with all of these people that have made bad decisions and then somebody comes in front of you who has come from a situation which has put them so far on the back foot financially do you sometimes find it hard to change gears with them as opposed to sort of pointing the finger too much to actually be like oh i see you i see you in this problem that you're going through and that you've been you've been put into yeah i mean we really only allow people on the show where it's their fault because it's a personal behavior show so anyone that complains about the people on our show saying that well they can't control that no everyone that comes on our show they can control if someone applies and it's something out of their control something like an incredible medical diagnosis that's where we send them like a page of resources and like if we can connect you with anyone let us know but it doesn't make sense for financial audit because financial audit is about personal change so we just we just don't have those people because that's not the conversation yeah what's going back to personality traits what do you think of the personality traits that predict financial success that predict financial success certainly being disciplined i mean discipline comes down to everything um everything in the world of budgeting comes from or money comes from budgeting and budgeting is all about discipline so you know that's why we created dollar wise that personal finance app that budgeting app that is made for the everyman not just like the you know super financial nerds who want to use things like wine app things like that that are incredibly difficult to use um they have the discipline to actually log into that app connect their accounts to their banks see where things are going and take the actions of the people that are in that business and they're going to on the advice that's given to them based on their actual financial information that's plugged in without the discipline even a tool like dollar wise that is incredibly useful to changing people's lives you got nothing like you could be tracking all of your calories using macro factor or something but if you're not going to change what you're eating it doesn't make a difference yeah it's discipline if you know people people are excited when they leave financial audit or they watch financial audit and even me like a diet even me like a diet if you did a fitness audit on me i might be excited for a couple weeks then you know if you don't have the discipline sometimes you fall back it's easy to have a fire under your ass for a couple weeks uh if you don't have that discipline for the long term it's difficult it really is what does debt do to someone's identity well unfortunately it turns a lot of people into victims that they're really not um a lot of people have more control than they're really willing to admit what does it do to their identity that's interesting some people use debt to improve their identity more than anything you know pulling up you really care what the person next to you at the stoplight thinks about your car i don't know why people care about that i've never cared about that um a lot of people use debt to get the clothes that make them look good the jewelry that makes them look good unfortunately actually that quality tends to come from lower income communities anyway it's kind of crazy how that works but um people use debt to change their identity but then people also use their identity of debt to put themselves in a place of victimhood and like i'm in debt i can't i can't do anything i may as well just spend the money i already have the credit card debt let me just put it on a credit card again what's an extra ten dollars gonna do to five thousand dollars and the answer is not much but it's a death of a thousand cuts they just think that over and over again yeah it's a very strange sort of death debt spiral where the sunk cost fallacy if this is already bad what does it matter if it's a bit worse yeah and also if you're stressed with finances you probably want something that makes you feel a bit less shitty and that could be food i'm gonna sedate myself from my financial troubles by further ingraining myself into my financial troubles which also becomes a spiral of itself yeah that was totally me in college you know when i had a lot of bad debt uh car debt student loans private student loans multiple credit cards and family debt i absolutely went to mcdonald's swiped the chase freedom card getting it close to maxing out constantly and because it felt good what did it matter is basically maxed out anyway what's an actual maxed out credit card gonna do do you think lifestyle inflation has become a bigger problem than inflation itself oh bigger problem i wouldn't say oh it's a good question you're a professional podcast host that's nice damn um i would say inflation is worse overall i'd say worse overall because that impacts everyone that's not your choice right it's not your choice but i on a personal level yeah no that's bad that's bad that's gonna that's gonna fuck you over when someone gets the 20 percent no no one gets a 20 percent raise okay when someone gets a five percent raise but increases their spending six percent you know that that is very common on our show you know what's interesting people on financial audit that are doing worse are the highest income earning episodes people often um you know you open the show with uh getting death threats and stuff and death threats and it's kind of minimal but we do get lots of complaints and stuff about the show one of our biggest complaints is you know i'm making fun of poor people those are actually the people i usually make fun of and yell at the least it is the high income earners that if they just fix a couple things they can get out of debt pretty quickly but they also get into worse debt because they have a higher income so they get approved for more debt they're always the worst off they lifestyle inflate i swear the closer they get from 100 to 200 to even a half a million dollars a year the worse debt the more credit cards the more time shares the more cars the more bullshit they have it's it's impressive it's so bad it feels i think probably incredible to a lot of people that you could earn half a million a year and have a bad financial situation which i wouldn't be surprised if the majority in the united states didn't who make that much why you have a half million go get yourself the nice house go get yourself the nice car the nice clothes why not you worked hard deserve it it's in our culture we want we're consumers do you think that uh the things that richer people waste money on different to the things that poorer people waste money on absolutely i'm trying to get over my fear of flights and i guess i'm rich now so that's nice i'm knock on wood with all that help you get over your fear of flights i rented a pj tell me so that's a waste of money easier or easier or harder so it's a control thing for me i don't like being stuck in a situation that i can't control do you know how to fly the pj no but i can say let's land i can't do that with a commercial uh well you can you could make a big a fuss that you would like but it would be a real headache and bad for my career too so that would be a real headache yeah but like um so what was your i mean pause yeah what was the first time with your travel anxiety getting on a pj like um it was for oh the pj itself it was actually really bad and we filmed it too we filmed that it's on the internet i burst down in tears it's really bad i'm sorry man oh it was it was anxiety like it's not i don't think that you should dismiss it like that so ah but it's not like something bad happened to me right like anxieties make belief it's like it's not real my brain thinks it's real but it's not so i was crying i was sad but you know what was actually making me more sad and crying a lot of people thought it was out of pure terror it was remembering a lot of the things that i haven't done a lot of the family i haven't visited because of my fear of travel grief as much grief as it was anxiety yeah so interesting point here there's a guy called vinnie shorman who's a hypnotist in the uk i have a friend my friend's name is sky king sky king right this guy lived in hawaii while he was a kid flies all around the world loves asia been to japan a bunch of times out of nowhere just developed travel anxiety bad travel anxiety tried to get on a plane couldn't bailed out tried to get on a plane couldn't bail i think this happened maybe six eight maybe ten times and i put him in touch with vinnie now some people have better results with hypnotism some people have worse in a single session vinnie fixes travel anxiety and i don't know what the full story is but i know that the simpsons theme tune is an integral part of the anchoring for how he gets over his travel anxiety interesting and uh that was real interesting that was like it's a fucking cool gift to give somebody to like unlock that but i i know what you mean there is nothing wrong rationally in terms of the utilitarian approach view of the universe there is nothing happening but your felt experience of yeah i'm getting on this jet that i've paid money for that's kind of a momentous occasion for me it's this landmark as a person who talks about money doing something that's kind of canonical in everybody that has money's life and my experience of that has been tarnished by the fact that i've got this thing that isn't me that i don't want in me and is kind of like behind the steering wheel a little bit i think that's i think that makes sense but it was nice because i was working with a panic therapist at the time and just started working with him again thank goodness because i need to get over this thing uh he didn't let me get off like like is he with you of course i yes so i brought him you brought your panic therapist on the jet with you it was our plan you know we kind of oh it wasn't like an intervention or something well actually technically i heard in the day before so we already decided but yeah um so we brought him with us and we're going to be talking about it's really cool and i'm working with him now again and we have we have a game plan uh to get over it but um yeah it was it was it was really simple it was austin to san antonio so it was nothing i just i wanted to get on a plane again because i was just preventing myself from getting on a plane so that's a very quick flight how long had it been since you were on the decade at least yeah so mostly road trips places but even that still gives me kind of anxiety um which is just it's just i hate it um uh but you know we have a game plan we're doing some things i want to go be on some more shows i mean dude if some people's exposure therapy is we just need to get a spider and put it in the corner of the room your exposure therapy requires a private jet exactly it's a slightly higher bar it's just as well that you're rich because if you won you'd be fucked exactly exactly what really sucks is the same exact model private jet i was in just crashed in laredo texas yesterday and a ceo in austin texas died on it so that's like kind of fucking with me that plus all of a tree there aren't many forms yes air transport that are feeling pretty safe right now the next one's a commercial we're doing a commercial next we're doing some long road trips i would book if i was you i would try and get maybe your row and then one behind one in front i was thinking that just in case there's a you know one of those i just didn't want to be around people but yeah that's also nice that's also nice uh so you've got some anxious panicky tendencies yeah really just that one thing you built you built a show which is essentially high stakes live confrontation right with strangers about their most shameful secrets yeah you're someone who has panic attacks you run a show that gives other people panic attacks yep is that a coincidence or is this just like the most elaborate exposure therapy ever it's great i mean that's what people have to go through they have to go through it what's actually nice is because of mine and i'm uh you know working with my guy friend who's a for a while now like i can actually work through them pretty well and now if someone actually does have a legitimate panic attack on the show i can help them through which is pretty nice oh cool we just pause the cameras and do that real quick and then this episode is brought to you by whoop according to my whoop i've tracked nearly 2 000 days of my life and the thing that still gets me is that i could have predicted almost every bad day before it happens that's because whoop gives you a complete picture of your health every single day your sleep your workouts your recovery your breathing your heart rate even your steps and over time you get to see what's working and what isn't and the whoop 5.0 is the best version yet it's seven percent smaller you get more than two weeks of battery life from a single charge got health span tracking to see how your daily habits affect your pace of aging it's even got hormonal insights for the women that are listening i'm a huge fan this thing rules it's been a huge part of my health journey and it's why it's the only wearable that i've ever stuck with best of all you can join for free pay nothing the brand new whoop 5.0 strap and you get your first month for free and there's a 30-day money back guarantee so you can buy it for free try it for free if you don't like it after 29 days they just give you your money back right now you can get the brand new whoop 5.0 and that 30-day free trial by going to the link in the description below or heading to join.whoop.com modern wisdom that's join.whoop.com modern wisdom what is your process somebody is sitting opposite you you're pushing you're pushing you're pushing the realizing how but you actually just explain to me what you think is happening inside of them inside of their mind somebody's got a lot of debt maybe they've been hiding from it like what's their emotion before what do they get to and then i'm interested in what you do to bring them back into land as well usually i can tell they kind of just go flat-faced in that moment like they they disengage their eyes kind of go blank and maybe even like a little bluish um and i'm like oh shit okay so we just literally pause i'm like hey you okay you know i go for a little bit of from the crazy voice to like just down to like hey you okay remember you know it's like of course they know it's like real and everything but i'm like yeah we can take a pause you know you can take a break and then i help them if they're like actually having anxiety attack i'll do like a breathing exercise real quick it's like three and six out and um that's pretty rare these days but uh and we definitely have people that need to do like a lap around the building or producer will take them or they need to go outside and hit a bite is that red do you think yeah hit a vape that's good that's why jared i need a fucking e-pipe for the people that are listening i require i want to be able to come up with i want to be able to pontificate uh but i want to be able to do it with nicotine so if anyone can find me a pipe that looks legitimate like this but i can have some nicotine and that will be um i wonder whether part of the reason that you're not inducing as many panic attacks is because you're getting soft in your old age you think so yeah i wonder whether it's because you've taken your foot off the gas i just threw something at someone the other day you'd be fucked here there's so many projectiles so many potential projectors some of them are heavy as well no honestly i am proud of it i think our our onboarding process is so thorough we've had people that have come to work with us or people that interviewed with us that have worked for like dr phil and a lot of other type shows dr phil's close in dallas so that's why him specifically but they go through our process and they're like this is crazy i've never seen an onboarding process like the process like this at all because usually for like i'm not speaking dr phil at all don't sue me but many shows like that daytime tv they don't give a fuck about their guests but we actually really care because one they're members of our audience so a little selfish there okay a little selfish i want members of our audience you're going to reduce the audience size yes exactly and i want them to do well whether that's you know you could look at it from two perspectives pretend like you hate me and i'm the selfish most piece of shit ever fine take that obviously i want them to do well because it proves in spite of me or do it because of me it shows that it works it shows that the show works so i don't care about how what the mechanism is can be because you don't like me i'm an asshole you want to prove me wrong saying that i don't think that you're going to be able to turn it around or because you love me and you think that my advice is worth listening to and you turn it around yeah and or there's the second option where it's and that's the real option that i actually really do care about how they succeed so i really want them to do well and the average guest pays off it's just over like 20 000 and 12 months of debt after coming on financial audit that's annual report we do one every december how much of that impact that you have on people's debt do you think is because of the knowledge that you give to them and how much do you think is because of the intensity of the emotional discomfort that you put them through yeah it's a mixture of both there is the that tough love crazy and fun approach of it like i think oftentimes 90 of the time they're having a good time too like they know the craziness of the show so but they have fun and uh that's not for everyone but i'll don't come on the show if it's not for you so it's like a show i would actually personally go on when i was in debt it would have worked for me someone's screaming at me that works for me it worked for me when i played sports you know it's whatever it works for me um and then we set them up with lots of tools afterwards they get dollar wise for free forever no matter what they get all of our personal finance courses they get a certification through course careers to help with their jobs they get access any kind of resource that we're working with third party they get access to so we try to give them everything and then we check in with them i don't remember the exact dates but it's like the day their episode goes live a week after that a month after that and then three months after that and we do two updates a week with former guests on our in our hammer elite membership um and we're endlessly checking in with them with surveys and we tell them to reach out anytime they want so there's the mixture of the show and that lights a fire under their ass and the post filming support as post-coital care process yeah uh i did love island 11 years ago and uh famously the uk series i don't know whether it's happened in america yet but the uk series of love island has killed more people than any other tv show like two past stars took their own lives one of whom was a really good friend of mine that's crazy then the fucking host took her own life caroline going on caroline flack yeah i just i'd once uh that's strange twice you're like three times including the host you're like there's a fucking pattern here uh but one of the issues and this was something that i saw especially i think love island broke the app store when it came out it was the number one app in the world above chat gbt above fucking claude uh and like there was shutdowns on servers and shit like 300 000 concurrent downloads at a moment like downloading the app to watch i don't know what i don't know what you do voting on it or something maybe and um the post show care routine thing because i did the first i was the first person through the doors of the first ever episode wow right at the first season so they were we were the the guinea pig we were the first child where you make all of the mistakes you drink when you're pregnant you smoke in like you fucking forget to feed it for 12 hours like all of that stuff and um once you finish up you should have a support system as you get thrust back out into the world now the first season that i did was like way smaller it was 10 times smaller than season two which was 10 times smaller than season three which it really sort of took off on that exponential but had it have been even a bit more exposed there was the least amount of post-show support and i think that's the thing that i think uh even though it was that much smaller the post-show support was basically non-existent and then each time that one of those incidents occurred you could tell that uh itv which is the the company in the uk that was but it's channel three in the uk right they have channel three and channel seven and um every single time that one of these horrible horrible situations happened everybody got an email just reminding you that you have access to the safety and care team i'm like dude fucking too late man you know like something about the horse bolting and the door being closed but the fact that also probably didn't get the opportunity when walking out of the island to be like hey if i do this make sure it's not in the episode so it's like you you were like no matter what happened exactly you do not control the edit and the entire universe is watching you and commenting on you and then what's mad is you come out because it's recorded and published live but you only enter back into the world once it's happened you have no idea what's making the edit you have no idea what people think of you you could come out and be the hero or the most hated person in your country it's fucking crazy yeah should i get into that everyone's doing that everyone's doing these pouches uh like would i be like so locked in dude no that's scary get them i'm asking for advice first before i go full those are mine so those ones are that's just caffeine that's just 50 50 milligrams of caffeine these these are very healthy for better for you nicotine those are knickknacks so that's like everyone in the world is doing pouches right now like how locked in would i be i have a bit of an oral fixation which i'm sure that the uh people that think i'm gay on the internet are gonna love to hear me say um have we got any toothpicks jb can you get if you're outside jonathan can you bring some toothpicks in from the cupboard please i want to show those just something to fucking dick about with while you're working i think is very important oh okay you've got a pen or whatever sometimes you try i could get the pipe by my fingernails that's my thing that'll do you um what what income level do people's financial problems fundamentally change where is it it's behavior it's fully behavior again like i said um the worst situations i've seen in the entire show are high income earners absolutely horrible so i i'd say never it gives you more opportunity to get out of a bad situation but i wouldn't say the income levels everyone thinks when they make the next ten thousand dollars in their income their entire life's going to change their spending changes but if their behavior is the same if their inclinations are the same their lack of discipline is the same they're actually just going to be in a worse situation so i would actually argue that if behavior doesn't change at the more income level your situation might actually get worse because you now are playing with bigger chips on the table yeah and if you're fucking it up you've got more access i didn't never thought about that it's such a good point that you've got more access to credit people think uh banks credit cards think that you are a savior you're a savior you're a savior you're a savior you're a savior because of that you can fuck yourself harder yeah and i guess i'll put an asterisk on my statement there is like you gotta hit a base basic minimum level right like if you can't pay for like the cheapest rent in the area put food on the table utilities then obviously anyone that's not making up to that point yeah that's a threshold where it's like game changer because you're just like surviving but if you can't even hit the survival like that's not even in the conversation but typically we don't really allow for that that much in this country in western society i mean you'll see it but you know we have lots of uh uh child support services for low income uh food support um housing support it's not perfect no one's gonna argue it's perfect but we do have a lot of a lot of social programs to help those people that are in those lower uh friend of the show iced coffee our boys had kevin o'leary on yeah he gave some insight about where he thinks different levels of income impact your lifestyle you pull that up for me jared look at this what would you say are the main four tiers of wealth where if you hit a certain amount life well i tell everybody this you should strive very hard if you're an entrepreneur to have five million dollars in t-bills not in anything else just t-bills making 3.82 percent this morning you know you've made it and you've safeguarded your family for the rest of your life if you can get five million dollars liquid in t-bills most people that consider themselves very successful entrepreneurs do not have five million dollars liquid in t-bills they don't but what net worth should you be at to justify five million in t-bills well you should be the first thing you should do is get to five million liquid be worth five million dollars liquid that's far more valuable than anything else liquidity with wealth is actually a superpower most people say i'm very wealthy but they couldn't raise a million dollars by two o'clock in the afternoon if they tried it's tied up in all kinds of things they think are worth a lot until the shit hits the fan the plan is if you're an entrepreneur the hardest thing is to make the first million really hard and when you make the first million put it in t-bills just as hard but not as hard is to get to two million two to three is actually quite easy because you figured something out but where you get undisciplined is you start buying shit you don't need because your mandates get to five million liquid i you have to have five million liquid to call yourself a successful entrepreneur and i don't care who said who disagrees with me they're wrong i guess i'll be wrong i mean no i i agree one of one of the first goals i had was to get to five million as quick as i could and and but invested in the stock market i don't really understand get your first million put it in low indexing uh t-bills a t-bill like treasury right so i'm not really understanding like putting it in bonds or something it just makes sense if if you make your first million in your young let it grow in the marketplace at an average rate and i don't really understand average of eight to ten percent that makes more sense i mean i guess if you're approaching like 60 and you make your first million off of a business being successful yeah put it in something more conservative but if you have time on your side unless america collapses like the stock market's going to do over a long enough time horizon you'll weather any of the little wobbles yeah exactly so um but i do agree with that five million mark because that five million mark if you do the four percent rules four percent of five million i think what is that sixty thousand dollars a year something like that so you live a good middle class income off of that using the four percent rule so that works so that was one of my first big goals it's i don't like the idea of taking the first million you make and then literally just not letting it grow past inflation that doesn't make any sense if you're getting your first million you should let it work have it work for you in the stock market i'm not saying reinvest it immediately into the business and certainly he's correct where people start getting money and they start blowing it he's a hundred percent correct on that this is weird to take the first million put it into something low index especially if you're young mm-hmm is there a financial milestone that creates the most happiness for people um yeah a lot of the happiness that can be achieved through wealth like you can't buy friends you can't buy family so a lot of the happiness that can actually be achieved through wealth i'd say if you can cover if you can weather practically any emergency including like a cancer diagnosis something really bad if you can how much money is that uh i mean honestly i think that's a good question i think that's a good question i think that's a good question 5 million is a good marker. That 5 million is a good marker. You can really start pulling into it for, you know, few years if it's like really aggressive, really bad and you want to go to the best in the world. So with that, you know you can weather anything. You can even if you blow through the five, hopefully you make it to the other side and you can start bouncing back. But that gives you unlimited flexibility. You don't get to do the crazy things that are super fun. You don't get to do the you can't buy a PJ. I can't buy a PJ. I can rent a short little trip. But I don't think that's what drives happiness. It's a fun thing. Moment of happiness. But I think the true happiness that you actually can buy is security. And five million is a really good number to get to security. That sounds like a massive number for people to feel financially secure. Yeah. But you know you can weather literally practically anything. That's the question. Like you can weather almost everything with a few hundred thousand hours set aside. You can, you know, take a while to find a new job if you have a few hundred thousand. But I'm saying if I'm really thinking like you can weather anything, five million is a great number to have. Yeah. I totally didn't think about the five million. I didn't think about the five million. I didn't think about the fact that you can afford to invest in specifically the S&P with any kind of tracker if you're younger because there's going to be some movements. There's going to be periods of downturn, but over a long enough time horizon. And I mean, if the S&P goes to fucking zero, there's much bigger problems than what you're doing with your money. Yeah. We'll be killing each other. Yeah. Yeah. Yeah. Most people don't realize how much being dehydrated impacts their performance, which is why for the last five years, I've started pretty much every morning with Element. Element is a tasty electrolyte drink mix with everything that you need and nothing that you don't. This orange salt in a cold glass of water is like a sweet, salty, orangey nectar. And I really tell the difference when I take it versus when I don't. It plays a critical role in reducing muscle cramps and fatigue, helps to optimize brain health and regulate your appetite while also curbing cravings. Best of all, they have a no questions asked refund policy with an unlimited duration. So you can buy it and try it for as long as you want. And if you don't like it for any reason, they'll just give you your money back. Plus, they offer free shipping in the U.S. Right now, you can get a free sample pack of Element's most popular flavors with your first purchase by going to the link in the description below or heading to drinklmnt.com slash modern wisdom. That's drinklmnt.com slash modern wisdom. How much shame surrounds debt? And do you think that shame hurts people or helps people change? I think it's pretty damaging that in our culture, talking about money is shameful in general and in debt. I mean, I think it's. It's good to have a good laugh on a TikTok short, things like that. That's fine. But I think if we have a whole system where people feel shameful to even bring up their close friends, their family, or even their therapist, that they're in a bad financial situation, they're not going to get that emotional support. They're not going to get that encouragement that they actually need to change because they'll just be weathering it themselves. That's a very difficult thing. You don't want to, again, going back to even just the cancer thing, you don't want to be going through that yourself. It's almost impossible. You need support. Anything you go through, any kind of support system, you need support. You need support. You need support. You need support. Any kind of support system is good. And if we have a massive level of shame around it, which I would say in our country, in our society, we definitely have. People aren't even willing to say what they make. They're embarrassed or they're afraid of making it too much and people look down on them for like, you'll be jealous. So there's a lot of shame around personal finances in our society. And I think that's pretty damaging. It's interesting as a British person, we have shame, but in the opposite direction. We have shame about talking about how much we make. If we make a good wage- Because everyone's poor. Because there is such a strong tall poppy syndrome that if you're seen to be too big for your boots or doing too well, that can often cause way more ire. It's interesting. I understand why people would feel personal shame around talking about being in a bad position financially. What does this say about me as a human? What does this say about my habits? Maybe people are going to think less of me, but there is a pro-social, fuck, that person's down bad. Hey man, I really want to help you as opposed to, dude, I just got this new job and I got a 30% pay increase. I can't believe it. I've been working so hard for this for a long time. If that's not someone that's got your best interests at heart, that triggers in them not pity, which is not an emotion that people want to feel, but it induces envy, which is way more active. That's the sort of thing that can get you ostracized from a friend group. And again, this isn't everybody. I've got amazing friends in the UK, but- I met a million people running nightclubs. I had one of the biggest events companies in the UK for a long time. Met a million people, right? In person with a tight pair of jeans on, holding a clipboard, giving out wristbands and free champagne. I had a handful of close friends that I could talk to openly about everything that was going on, successes, failures, all the rest of it. That's not a great friend exposure to conversion funnel, right? A million people, handful of friends. And that's why- At least you had them though. A lot of people don't. That's true. Yeah. And as an only child, that was like, fuck, I've got some people that have got me and that's cool. The UK is a very inhospitable environment for people that are trying to do things financially. I've got this line. I wonder whether you agree with it. The UK is a great country to be poor in and a terrible country to be rich in. And America is a terrible country to be poor in and a great country to be rich in. And America is a terrible country to be rich in. Yeah. I mean, a lot of poor people move to and stay in the UK. A lot of wealthy people leave. I'd say the analytics just follow that in general. Bingo. Fucking nailed it, dude. Forget the pithy maxims. I just dialed the entire financial industry. There's a safety net in the UK, which moving to America to me feels quite brutal. Why leave the council estate? It's comfy. It is. National Health Service. I've got this stat. Britain spends more on working age welfare every year than it collects in income tax. Working age welfare. And the difference gets borrowed every single year. Yeah, that's insane. And all the productive people that would actually contribute to the tax base are leaving. The wealth drain, the brain drain in the United Kingdom is, I feel bad for your country. That's honestly, it's a place where, I mean, the majority of my life, I wouldn't have been able to live in. I wouldn't have been able to live in. I wouldn't have considered moving there. But there was a part where I was like, oh, this would be the best place to go live in because you get the cool walkability of Europe and the nice, okay winter and nice summers. And it's your language. Exactly. So I wanted to kind of go there for a bit. It's gone. If the UK comes back, it'll be the biggest comeback story in the history of civilization. Yeah, we're like 9-0 down at the moment in the game of football. There are, you know, I mean, there is the conversation where it's like, yeah, GDP per capita, there'd be 51st state. Did you see that? Yep. Yeah. I got a lot of shit for putting that charge up. Well, I mean, that's true, but there also are- I got a lot of shit from Americans. Well, Americans are retarded. I don't know. Americans are rich and retarded, but there are some other true things. The UK, when it comes to safety and a lot of things, you know, it ranks higher. So there's not just like, it's not all shit. Making a trade. Yeah, it's not all shit, but like, no, it is true. I mean, unfortunately, it's going the same direction as Spain or Southern. Italy, one of those places where it's people go there or are born there, get educated there, and then leave to somewhere where they can make double the income. And why wouldn't they? We're such a mobile world. Dude, if you're inhospitable, and this is the thing that I understand some of my lefty leaning friends, Jimmy the Giant is one of them. And he thinks that taxing the rich, he means like the ultra rich, he means like a hundred millions plus of liquid or whatever, held asset wealth. But that is something that's justified. That's something that would help to raise up the underclass and people that are unemployed and need that. But I think the bottom 55% of the population in both the UK and the US are net withdrawers from benefits as opposed to net contributors. Like just that statistic. Income tax in the United States, the bottom 50% of earners contribute 1%. 50% contribute 1%. Like that's crazy. We're a very progressive income tax society in the United States. United States is actually the most progressive Western major country for income tax. What we don't have is VAT tax, which usually funds like the National Health Service and whatnot. So in Americans, that's the fun thing about Americans, including especially populist Americans, either left or right. We want the Scandinavian social programs, but we want to do it on like a Florida tax system. Americans are not willing to pay the actual taxes required for the systems. And it's never about the wealthy people paying a lot of taxes because that doesn't fund at all. It's all about the flat tax, the VAT tax, the national sales tax where everyone has to pay an extra 1, 2, 3, 4, 5% or whatever it is on everything they purchase. That's what funds those social programs. And the United States would never tolerate it at a national level. Have you ever seen what a set of accounts for a normal limited company that has to, that's within the VAT threshold. So I think it's $120,000 a year or 120,000. Fuck. That was very unanglicized. 120,000 pounds a year or above that your limited company makes. And after that point, you're registered for VAT. Have you ever seen one of the accounts submissions? Dude, it is a, as somebody that had a limited company for a decade and a half in the UK, I still do. My rental properties go through that, although they don't breach the threshold. So it doesn't matter. It is a fucking nightmare. Each individual transaction you charge who is getting the service from you, an additional 20%. That's what VAT is. 20%. And then you claim back that VAT up to an amount from the government. So it's this fucking Ouroboros, this endless financially, bureaucratically in terms of paperwork. It's this huge overhead. And I understand what VAT is for. I understand that we have lots of services that you don't have in America. They need to be funded somehow. National insurance. That's another type of tax that's not seen in America. But if you do the math, after everything that you get free in the United Kingdom, after people pay for it and the median income here, after the median taxes here, after the median paying for the private services here, we still end up with more money in our pocket in the end. No way. Yeah. It's pretty close, but it's still. Even with the healthcare is one of the biggest costs, even though healthcare is the single. The single most common reason that people go bankrupt in America as well, I think. Yeah, which isn't surprising. And honestly, people make it sound more consequential than it is. So as we talked about earlier, bankruptcy is actually not that even big of a deal, really. It's really not. It's overblown. I mean, it's not great. Don't just go get bankrupt. That's not wonderful. But people make it sound like the scariest thing in the world when it's really not. But I looked into that two years ago. Maybe the numbers have changed today. But two years ago, that's what it looked like. And we still have, out of a major nation, yes, you're going to have microstates where it's like, what's. Switzerland, much smaller. Obviously, their GDP per capita and everything is just going to be a lot higher in those kind of places, or like Monaco, something like that. But as far as a major nation, large nation, the United States destroys when it comes to disposable income. The income you have after all the important stuff, after you get taxed and everything, we just lead because we just encourage, our system just encourages that. But what's interesting, when talking about the United Kingdom, and you talked about your more left-wing friends that want to raise taxes and stuff there, what's also interesting on the left-right spectrum is during the Great Recession, that 2008, 2009, 2007, the United Kingdom went more conservative, where the United States went more liberal with their spending. We pumped a lot of money into the economy. The United Kingdom, I had it in my austerity. They went austerity. And you can see what the outcomes were. We went into debt for it as a nation, but we recovered in a couple of years. The United Kingdom's GDP. GDP just recovered from 2007, I believe, like a year and a half ago, maybe two years ago. Yeah. So their more conservative approach of spending, raising taxes, cutting spending during the recession, it failed. It objectively failed across Europe. In the United States, Donald Trump, COVID pumped a lot of money into the economy. We're very liberal with our spending. Yeah, we chucked the money in. So we're pretty progressive. I mean, 50% of our federal spending, yes, it's mandatory spending. It's not whatever. It's still social spending. So left versus right, it's not always. One side's going to always be in the right, because the more right-wing running of their federal budget in the United Kingdom failed when it came to the Great Recession. It destroyed the economy, destroyed productivity, destroyed spending. Well, even that now has kind of become quite squirrely, because when you talk about conservative spending, a lot of the time that's more pro-capitalist, they're more prepared now to turn the money printer over. Yeah. It's the existing archetypes of what it even means to be left and right. Pick stuff about which races you do or don't like, which cultures you do or don't like, which religions you do or don't want inside of your country. Everything that. The whole tectonic plate underneath what used to be stereotypes and cliches, that's all moved. Oh, completely. I mean, you do see it in race. It was the more 90s liberal, which I'm probably more aligned with on this perspective of we wanted a color-blind society. You know? And it was the more right-wing people that were like, well, no, we see, you know, they're different than us, you know, and that kind of stuff. Like, I don't know about the 90s at that point, but even still, that was the more 90s liberal perspective. Now, it's the more centrist, even right-wing position, color-blind society. And people on the far left are like, no, we need black dorms, we need black graduations, we see race first, no matter what. And it's very interesting how that shifted. And I don't think with bad intention, to be clear. I don't think they're evil for that, but I do think it's. Sometimes when people get to the extremists, they horseshoe around. Correct. Yeah. Far left and far right end up looking a lot closer than you'd think. Yeah. That, just going back to the bottom 50% contribute 1% of the taxes, but then when you net it down in terms of what's given all different types of aid and assistance, I think it's up to the bottom 55% and net detractors from the economy. Yeah, it doesn't surprise me. And we have systems made for that. The title, Tax Credit. Tax Credit is made for that. It is usually lower income people that have more kids. This is how it is. And lower income people pay less taxes, but they get the same child tax credit. So this is more money is going to go to them in the end. Do you think that would surprise most people to find out that the bottom 55% of the population are net detractors from the benefit system as opposed to net contributors? Oh, of course. Absolutely. Listen, every time I take a political compass test, I find myself on a centrist, slightly leaning right economically and then decently left socially. But I had an extreme socialist on my show. I was talking to her the other day. Episode's not out yet. And I was talking to her and I was like, how much is the top 1% paying taxes? She says, nothing. They pay 0%. I'm like, no, it's like 30% of all income taxes. Top 10% pays like 50%. Top 50% pays 99%. It blew her mind. She has no idea because we're in such misinformation, algorithmically defined places on the internet. There was a study done by some elite university on the East Coast where they were. Researchers were going into TikTok and engaging with left-wing content and then a different one would do right-wing content. And TikTok immediately found out in about three minutes, whether you wanted, if you're anti-men or pro-left or anti-woman or pro-right, and they would just put you into that camp where all of a sudden all the information you got, all the content you watch was the extreme version of that. And that's all you were getting. Because you show you engage with that. And if you engage with that, they want to give you more. So you stay on their platform. It makes sense from their perspective. So you can't just say, I'm going to do this. I'm going to do that. And then you're going to do that. So it's not surprising at all that people wouldn't be aware of that information if it goes against their worldview. 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And if you do not like it, they will give you your money back. Right now, you can get a free AG1 welcome kit that includes a bottle of D3K2, an AG1 flavor sampler, and that 90-day money back guarantee by going to the link in the description below or heading to drinkag1.com slash modern wisdom. I don't know, man. I don't know what financial education, what good financial education looks like, because the incentives aren't necessarily aligned for somebody who feels like they're really struggling, who's comparing where they are financially to where they think their parents were at their age, where they think everybody else is at their age, what they think that they should have. So past generations, other people, and my idealized version of where I want to be, all of that bundled together, you saying, well, actually, the top 1% of earners, they contribute 30% of the taxes, and the bottom 50%, they're actually net detractors from the system. That doesn't make me feel any better. Like, it's not a comfort to me to take a macro perspective when my micro experience sucks. Yeah. I mean, that's why financial audit's about the perspective of the individual and their responsibilities and what they can change. Because, you know, some people comment, why aren't you talking about the systems that fucked them in the first place? And I'm like, that's not what this show can change. You can go vote. Congratulations. You contributed to changing the system that you want to do. But the reality is on that show, only one person can change what's happening in that person's life immediately, and that's that individual. So you're right. Talking about the system, it doesn't help anyone personal level. It's the actual choices. And there is good news. The United States is actually taking a pretty important step towards it. We're close to 40 states that now require a personal financial education course to graduate high school. It's close to 40 states. It wasn't even half of America just a couple of years ago. So they're really getting on. Have you had a look at the syllabus? What do you think of the syllabus? I haven't looked at it, but I mean, the governor of Michigan came on the show and, you know, she wanted to talk about it. And, you know, she's Democrat. She's probably going to run for president. And I was very impressed with how much she actually about making sure people needed to learn about basic personal finances before graduating high school. I think that's important. And I'm glad to see that we're doing that as a country. Now, I don't know about you. I don't know what the grade system is like out there in the United Kingdom, but I was a fucking retard who didn't give a shit about school. I would have done whatever the minimum thing required to pass that school and I wouldn't or that class. And I I, other than the things I was actually interested in, which is mostly history class. and music classes at that time, I did the basic bare minimum to pass and I wouldn't have learned anything. So there is that consequence, but at least we're trying. If you were to put together a syllabus of principles financially to teach young people, what would be the biggest ones? It would start with budgeting because if you can't budget, there's nothing else. So budgeting is that, you know, we talked about the discipline, personal responsibility. That's a little harder to teach in school, but at least learning how to budget a household, starting with something like the 50-30-20 method, which is 50% on needs, 30% on wants, 20% on investing, smallest categories investing. You get to spend 30% of your money on bullshit. Obviously that changes in places like New York, LA, San Francisco, but that's a good place to start from. So teach that concept, teach what is a good car loan to get. I enjoy the money guy rule. You put 20% down, no longer than a three-year term, and no more than 8% of your income is monthly payment. That equals a car you can afford. Actually teach the value of college and a degree instead of saying everyone needs to go to college and borrow as much as it takes to get whatever degree you want at any institution you want. Instead, teach, okay, a good general rule is don't get a degree of which you borrow more for than you'll get in your expected first year's salary. So that's a good rule. Oh, that's nice. Yeah, it's a good rule to just not borrow more than you need. I don't know how America stacks up in terms of different things. Different courses at different universities. Can you give me some examples of low, medium, and high and what would be expected? Because there's no way, I've seen some of the fucking student debt bills. Oh yeah, it's bad. There's no way that somebody's going to, some people wouldn't even earn that back in five years of being at work. Of course. If they had zero costs and all of the money went back to their student loan. Yeah, absolutely. I mean, so strictly thinking college, let's get rid of trades or anything like that. Community college, you can go there for two years, you can get your basics out of the way. In fact, a lot of community college, you can get your four-year degree now at like nursing and whatnot. Austin Community College here, you can go for like a thousand bucks a semester, 2000 bucks a semester, super affordable, super cheap. Many people can work their way through it. And that's in Austin and it's similar in other areas. From there, you want to transfer, if you're going to transfer to an institution, more affordable, just standard, maybe directional school, like Western Texas, you know, something like that. I went to Western Michigan University where it's a little more affordable and you complete your final two years there and you take federal student loan. Federal student loans for that. And the big question from, well, okay, to finish your question. So the four, that more directional school, finish your four years, but beyond that, then you're talking like you're going out of state at a four-year institution, skipping community college, out of state's like double the cost. Then you can go beyond that. Then we're talking private institution. You actually go beyond that and think international, which is why people really care about rankings in the United States, because that gets international students. They care about rankings and they'll pay an extra premium to go to schools in the United States. So that's why they really care. But I try to stay down here, try to stay in that community college for the first two years and then transfer to the in-state institution. Federal student loans, subsidized or unsubsidized, at least you have the protections with federal student loans. Really try not to go private. The only reason you would be going private is because your family already makes a decent amount of money. So that's how I would approach it. And then it's degree selection. That's the important one. You have to look at the fields you're going into. Unfortunately, there is a big gender division and this isn't anti-women. I don't want to be on that fucking weird anti-women shit, but there is an actual reality that women are getting lower return on investment degrees in the United States. Tend to get more things like social services, psychology, sociology, things like that that don't return where men tend to really think about the income post. I don't know if it's ingrained societally or culture to be the provider or whatever, but for whatever reason, they tend to go more engineer, things like that. And women, more teachers. So that's really important to think about the degree and the return on investment. And now, honestly, a thing to probably consider is how AI resistant your career field is going to be. Who knows where that's going to go? I think, unfortunately, women are going to be hit hardest by that. So there is, it's referred to as the lanyard class. Okay. People that wear lanyards to work. It's middle management, it's marketing, it's HR. And that is a big chunk, that sort of white collar, lanyard people. That is going to be a big chunk of what AI comes for first, supposedly. And that is going to, I tweeted this and I got, people got very mad at me about it, that. You're looking at your responses to tweets. Who cares if people are getting mad? I go on that once every two days and I see what furor has occurred within the last 48 hours. They don't matter. I post and ghost, but it's just interesting to see what the sentiment is. How close to a third rail or beyond the Overton window is this thing that I just said? This is the internet system. It's not real life. So it's just so hard to take in account what is said. Very true. Like this last election in midterms, I swear, it all went opposite of what you saw on Twitter. You're going to think all these like outsiders were going to win because they're so big on Twitter. It was nothing. It was nothing. Don't look at your response. The sexy campaign on social media is not middle America who are voting and actually have the time and the preparedness to be able to go out and have registered and are fucking ready to go. Anyway, I said, we've just got ourselves now. We've overshot it a little bit. I think women out earn men up to the age of now about 32, 33. That's about 1,111 pounds more to 29. I don't know what it is after that. And only then does it, but that has grown. It was up to 29. Now it's up to 32, 33, I think for women out earning men. Given that you've just about reached young people, gender parity between men and women in terms of earning, you are now about to see that what probably to women feels like we finally arrived economically. Okay. Majority of degrees. Yep. Two women for every one man completing a four-year U.S. college degree by 2030, et cetera, et cetera. Master's degrees even more. Correct. PhDs also more, but not more, more. Uh, that situation of parity is maybe going to be at risk. And I think a lot of fingers are going to be pointed that, um, we just arrived and now robots built by men have just taken our opportunity that is still so fucking green that we haven't settled into it away from us. That I think is going to be one of the biggest stories of the next decade. I mean, there's going to be many, but one of the ones that people are going to feel the most is more war between the sexes. Oh yes. The gender wars are so extreme. The political division right now in the most recent federal election, the gender divide and the generation Z is further than any other generation in American history. It's, it's, it's, it's scary. I'm actually scared. And it's impacting more things than this, that, uh, it's impacting reproduction numbers, which impacts the overall economy. It impacts retirees, the retiree to worker ratio. If people aren't fucking and people aren't fucking people hate each other. Now they have, um, you're swiping based on political affiliation on the dating apps, you know? Uh, so it, it is, it's very scary and it's sad to see. And unfortunately, again, it is usually like the white women that are calling me fascist online, uh, for personal responsibility. If I'm like, you're in very good company with regards to that. Yeah. But it's like, it's a, it's really weird because I really just want the best. And we're talking about statistics or anything isn't sexist. It's not right now. You know, I didn't even say it earlier because it shouldn't be about the sexes. When we talked about people struggling post-college degrees and not get a job, it's actually not women. They're, they're getting, uh, jobs at the same rate as new degree holders is traditional. It's men that have fallen off the cliff, but I didn't want to focus on that because this shouldn't be a big gender war, but the gender wars among Gen Z right now is insane. And we're going to have massive consequences down the road, just as we've seen in South Korea and Japan. And I'm terrified for that as a hopeful future retiree. Yeah. Uh, this was from my newsletter this week, Asian women now earn more on average than white men in the U S a finding that adds a wrinkle to common narratives about patriarchy and white supremacy. Asian women are winning. Yeah. Yeah, sure. Of course. And like, I understand there's the history, right? So you got to put many people feel burdened by history. I get it. Victimhood's easier to have than, you know, saying like, Oh, we're doing okay now. Um, I think, I think it's, it's very, there's two, there's two sides on that more. Uh, I guess if you have to put it in a camp perspective is like, you know, Oh, everything's good now. So, you know, we don't even need to think about what came before, right? It's like, okay, but there is an actual history. And then on the left wing side, that's just as bad is like, they don't even recognize that there has been progress. It's all victimhood. It's all bad. Women are oppressed, all this stuff. It makes no sense. Have to acknowledge the realities of the history. And you have to also recognize when we're trying to change society, that we actually have changed society and people are doing better than before. The thing that's kind of an unseen cost of always looking, with a historical context that forgets the present is that it actually denies people who are in a good situation from ever feeling like they're in a good situation. You go, Hey, Hey, you fucking arrived. I get it. Burdens from the past, uh, things that need to be remembered. So we don't fall back that the main fear is if we, if we don't keep talking about it, maybe we'll go back there. Right. That keep a weather eye on that. Make sure that that's happening. But if you make sure that what's in the present always neutered by what it, where it came from in the past, actually give people the gift of feeling the opportunity for celebration couldn't agree more but you're evil for saying that so i'm aware it's fine i've been called a lot uh people aren't fucking caleb hammer like that's the i did i did a four-hour debate about the birth rate decline uh i could have just who uh it was uh stephen j shaw who did the birth gap documentary uh simone collins who they say people are fucking because they're not no no no it was a demographer a pronatalist and a statistician uh it was broadly broadly in agreement although the reasons were what was being debated it was kind of i've been deep down this rabbit hole for a while um which if anyone knew the actual reasons we would be able to fix it right and every country has tried to write a lot of money things and it's it worked in hungary for a year and then it fell back so correct there's there is a number so lyman stone would be an interesting one for you to talk to from a like economic implication he's like institute for family studies which you may have referenced at some point he's the man when it comes to these like tip of the fucking spear um there is a number that you can pay people to fix the birth rate and it's not that much but it's fucking loads compared with what we spend it's like 10 of gdp it's a lot i mean it might be required at some point right because that's like collapse of human civilization at some point i don't think you know luckily the united states were like generally pro-immigration people want to move here so we'll be fine but places like uh south korea are done yeah for every hundred south koreans will be four great-grandchildren yeah 96 percent gone within a century what's the same so have you looked at um the economic implications sort of macroeconomic implications of a declining population yeah i mean i'm more focused on the retirement when we were um these numbers i'm gonna have to be a little fuzzy on because it's hard to remember exactly but when we first started a social program called social security that has good intent not an evil program mismanaged not smart in the end you know we had like a program called social security that has good intent not an evil program mismanaged not smart in the end you know we had like a program called social security that has good intent not an evil program mismanaged not smart in the end you know we had like a worker to retiree ratio of like 100 to 1 uh what are we at now we're like a it's close to like 10 to 1 or something you could have these numbers um but the the closer and closer we get the more burden it is on the individual and if you have social systems that are solely reliant on a growing population growing tax base it doesn't work they fail so all the social programs are starting to fail you're seeing them starting to buckle social security is going to have a why so when there were more workers we were contributing more money than was going out so that money was starting to build because old people don't work but they do need caring for yeah which makes sense and that social security uh fund was starting to build but where was it like around early 2000s or something we started to take more out of it than was going in as the less people replacing them and by 2032 unless the retirement age changes unless the cap on social security tax changes unless we reduced the cap on social security would be brought down or or we also cut benefits to those who are already high incoming you know all controversial for different reasons whatever that's not the point but unless something changes the fund goes to zero and then the only money that goes out is the money coming in and that's projected to be a 25 ish percent cut by 2032 fuck me that's going to be unpopular oh it's good whoever's president is going to get killed i mean it's going to be bad we'll probably just honestly the property law we'll borrow the difference and our debt will just go even further probably what's going to happen the last time we made a compromise was during the reagan administration if i'm not mistaken where they barely wage raised the retirement you have to remember the average lifespan what is it not 65 yeah right around there and we raised like two years the average lifespan for when we started social security was like if you actually make social security you're going to live for another two or three years now you're going to live a couple decades so it just doesn't it doesn't make sense anymore it there even though it's super unpopular among the highest voting base the boomers social security retirement age for what it was actually intended to when fdr signed it into law should have been raised almost like 70 by now which sounds evil yeah does anybody like the idea of working and working and working this is i've still not been able to thread this needle properly i've done four hour fucking discussion with the best on the planet as far as i could find to talk about this stuff endless episodes with steve and i've had lyman on before i've had simone's husband on people that are skeptical critical all this stuff i'm like dude like if you care about the quality of life of people more people are going to be old in the future than ever before we're going to have more old people than ever before and where do you think the money to support them comes from like do you want grandma and nobody i've said this a gazillion times nobody should have kids that doesn't want to have kids nobody should have kids that doesn't want to have kids there is a more extreme position than that which is it's your duty to have kids to feed the economic engine i don't subscribe to that view but like just the fact that birth rate decline is not a problem is kind we shouldn't we shouldn't consider it especially from a left-leaning perspective we shouldn't consider it because it's good for the environment i'm like i've really i've really struggled to thread this needle like properly it's a hard one the thing that disappoints me is you know before i was even born right around when i was born in the 90s they considered taking that social security fund and having it having that money get put into something like the s&p 500 yes to this point it would be insanely large and we would have enough money to do whatever we would have like a norway level uh sovereign wealth fund it'd be incredible because norway's actually capitalistic and smart with their money apparently via the government but we said no let's tie it to the low t bills like mr o'leary was talking about which is another reason why i'm against like low t bills because guess what didn't grow now it's being drained i saw some stats around uh sam backman freed's investment in the s&p 500 and i was like oh my god i'm not gonna be able to do that with ftx uh anthropic was one of them i think spacex was another one and because during administration bankruptcy whatever the fuck it's called what's it called liquidation like when we sell it all sell everything get the value of it right now and just give people the pennies on the dollar to what it is that they're owed by this bank that goes under that was run by a guy that played league of legends while he was on skype calls if they'd held to now everybody would have got their money back mm-hmm i mean you could have paid people probably double triple quadruple their investment in anthropic is worth like a fucking insane amount of money the same thing goes with spacex ipo that just occurred that's a question what do you make of having the world's first trillionaire in existence right now yeah it's interesting a lot of people are very angry about it um you know uh a lot of i i'm happy that you can get rewarded in this country for the things you do we're getting the internet beamed from space i love my tesla the self-driving is insane if people haven't been in a recently updated self-driving tesla like you can read eat drink coffee scroll on tiktok and the car will get you somewhere perfectly fine with that without without looking at the road it's one of the crazy that's technology no one would have even dreamed of 20 years ago the things that we're doing the private space like i think you should be rewarded for it trillions a lot it's crazy but even if the argument is you're against someone being a trillionaire what's then the action the action is you're forcing him to sell a position of his own company you're saying we're taking a gun and we're saying you must sell a position of your company to pay tax on it i'm against that as a philosophy that doesn't make sense should a trillionaire exist i don't know but if you decide the answer is no the actual action that comes from it is world's worst and whether or not a trillionaire should exist forcing people to sell their companies crazy it's a really interesting argument i understand inequality is the craziest disorders of human behavior so one example from candace blake who's out in australia she looked at levels of self-sexualization and beautification of women and correlated posts on instagram and twitter at the time with the geolocation it came from and looked at the wealth inequality in that area women that were in higher wealth inequality uh ecologies posted more sexy selfies did more self-beautification and more self-sexualization the reason for that her theory was when you see both how high you could climb and how low you could fall if you pick the right or wrong mate that on average will be at least contributing to the household or maybe the breadwinner and the primary provider for you and your future family you start to turn on the taps in terms of the way that you work and that's one example in one very small niche of one very small study when globally everybody is now aware that there is a guy on the planet right now that could lose a trillion dollars and he could lose a trillion dollars and he could lose a trillion dollars and still be the richest man on the planet that you and me and everybody is closest to the second richest man in the world than the second richest man in the world is to the first richest man in the world that is deranging it's deranging to the way that people see their place in society it is i just try to put it in perspective and if the thing the thing is i've i'm i do well and i'm okay with paying more in taxes if that's the argument i'm not okay with it if we're not we're not even able to investigate fraud if we're not able to blah blah blah you know there's a lot of things the bureaucracy is insane fucking so i would rather not pay more in taxes until we actually get our shit figured out but even still i would be okay with paying taxes if we say it's going to fund something that's going to help people but the conversation has gone away from that to saying that man has a lot of money that's evil let's take it that's no longer the conversation i want to fund something that's actually good if we're going to raise taxes so it's the i they they've lost me at that conversation and also they think like Where does him being a trillionaire affect you? For me, I think what actually affects someone's personal life that they have to call a cashier to unlock a toothbrush at a corner shop. That's actually impacting you on a daily life. Zoning laws is impacting you because it's preventing houses and higher rises being built, which impacts your housing costs. Student loans being tied basically to hiring more administrators. That impacts you. There's so many more things impacting you than someone whose companies that he owns large stakes in went public and they're being valued high, which made his net worth go exponential. There's so many more things to address first than freaking out about that. But something in the human nature, especially of the more extremists, I will say, and more populous is like, that person has a lot of money. I don't, let's take it. But even if they took all of his money, I think everyone gets like, what is it, like a thousand or 2000 bucks. It's something, it's something that it would actually be really nice. And for a lot of people could be life-changing, but that's one time it would drive inflation extreme. And, uh, it would actually just be damaging in the end. Cause then we don't have life-changing technology. Why would it drive inflation extreme? Speak to me as if I'm five. Well, you know, Talking to you like you're a fucking LLM here. Can you imagine if you had a Caleb LLM? It's just shouting and screaming at you the whole time. A rapid supply of 350 million Americans spending a couple thousand bucks just out of the gate, like a trillion dollars just pumped into the economy like that. I mean, that'd be brutal. Just look what we did during the pandemic pumping hundreds of billions. So it'd be pretty brutal. Whilst also sounding like the sort of thing that we would want. But no, you need people to spend money in the micro, but not in the micro. Yeah. Not so much that it drives insane hiring sprees that pushes everyone's incomes to insane levels that pushes inflation higher. What are the biggest financial red flags in dating? Uh, high car debt would be absolutely horrible. If I pull up to that Tik TOK girl, we saw earlier in $50,000 car financing, a $50,000 debt on a car, like we'll hook up, but we're not staying for a second. Okay. It's a big red flag. High car debt. What else? Um, I think it's nice for people to off offer, like splitting the bill on a first day. You know, I like being, I guess the man and like paying for it, but I think it's actually, it's a green flag when people, you know, if they expect you to pay for it, I think is a bit of a red flag. You know, if they're thinking like they're that special thing. And that's why entitlements. I don't know. It just kind of turns me off specifically. If, when people, people have that main character syndrome and it gets tied into the financial situation of like expecting things, you know, that's kind of gross to me. A bullshit degree. I mean, less, less. Bullshit degree. Just toss that out to the side. Yeah. What'd you do your degree in? Yeah. No, sorry. I dropped out. This is not going to work. No, no. You meet me on an imaginary, imaginary day. Would you date me? I dropped out. Uh, how much debt you got? Uh, 25,000. That's all right. I'd date you. Okay. Yeah. Nice tits. Thank you. Um, car payment. Bullshit degree. Yeah. Um, and that entitlement of like expectation around spending on them. Anything else? What, what, what, uh, low ambition. I know that's kind of tied to finances in general, but if someone's that ambitious, I don't need someone to be ambitious to want to go make a million bucks a year, but if someone isn't driven in their career or even just hobbies, if they're not driven, what a turnoff. I think. Going, uh, low ambition, high materialism is the perfect cocktail. It's like, Hey, you're allowed to be materialistic as long as you've got the conscientiousness to know where the limit is and to be able to keep the front of the funnel pouring in. Yes. You've described a gold digger and we've had lots of them on the show. They're the, Oh, I love a couple with a gold digger. I can just, I can just verbally punch all day. Why? So much fun. It's just so much fun. Cause I see the person, the typically, unfortunately a man, but I've actually had the reverse a few times, but usually the man's actually working, making a lot of money and she's over there feeling entitled. And I see all the spending and their own statements. I see proof in front of me of her just spending all this money and feeling like they should do all this. Well, this guy over here is struggling working two jobs. It is just, it is a brutal thing. And the nice thing, the thing that I love about it is seeing that light bulb go off in his head. When he notices this person's just using me. How many couples have broken up because of what you revealed financially? A very rare on the show. We've, we've had a couple, we had one divorce. It wasn't from the show and it was a couple of years ago, which is a bad marriage, but it's actually pretty rare for people to break up. You should couples merge finances. At some point, it's nice to have a joint account that incomes go in and then bills come out of, and then we can send a fund money to our own accounts from there. I think after marriage makes a little more sense, at least common law marriage, cause then you have some, uh, some of those protections in the case of death or whatnot. But, um, yeah, I mean, it's fine. And it's fine if people want to keep it separate, as long as they can actually budge. The household, people just usually fail at that without getting insight on the full thing. What's your perspective on prenups? Yeah, it's fine. If there's like a big wealth divide. Yeah. Big wealth divide. It makes sense. I think if you're both making a hundred, it's a bit weird. Do you often see financial infidelity, like hiding purchases or debt or accounts? All the time. So common. And most people don't think it's actually much of anything, but the other person feels really hurt in the end. They just don't realize it. Cause spending is just one of those things where it's not, it's not viewed as extreme as cheating. It's not as extreme as cheating, but it does impact. The other person that they're hiding it from more than they think. And the moment it's exposed on the show, you can see the pain in their face. It's still trust, right? Yeah. It's trust. It's exactly trust. Not talking to the person. It's a lot of things and it hurts them personally. If you're not being honest with me about this, how can I be certain that you're being honest with me about anything else? Oh yeah. Absolutely. It's a vicious cycle with that stuff. What, uh, is there a like sex difference in what men and women go broke? Doing honestly? No, not really. I mean, I'll get a little to be equally retarded in similar directions. I mean, everyone loves collectibles. They just get like different. I got little boobies on the women and I got Pokemon cards on the men. Everyone loves collectibles. No, no, no. But like, you know, it's like split down the genders. Like, like both genders love it. Does everyone obsessed with Warhammer 40 K and others obsessed with beanie babies? Exactly. So, I mean, you'll get some more frivolous spending. Maybe a guy will put some more into his car. A girl will get more extensions, but. Yeah. It's similar levels of bullshit. What's actually interesting is, you know, talk about young men gambling issues, but the, it's actually pretty similar in terms of percentage, young men and young women. This is not talked about. No way. Men is higher, but it's pretty close. It's pretty close. What do you think of prediction markets? What's your. It's fun. Just like drinking, just like smoking weed. Um, anything like that. I think it's cool. If you can control it, if you know you have an addiction or an addictive personality, you need to keep yourself away from shit like that. Hmm. Yeah. Mental health issues impacting spending. Is that true? Like shopping addictions and stuff. Yeah. Or if you're depressed, it feels good to get that dopamine spike of a quick purchase. Absolutely. Um, yeah. Mental health affects everything in the end. It's kind of that, that discipline thing, right? Everything stems from the discipline when it comes to personal finances. If your mental health is bad, usually your discipline is going to be bad. I can't remember where it was. I read this. I think it might've been the UBI test study. There was two that were done in 2024. And, uh, one of the points there was if you're poor, you're not going to be able to spend money. You're not going to be able to spend money. You can only really get small doses of pleasure from small things, but that means that you're more likely to spend frivolously because you need to relieve the stress. It's that point that we made before. Like if you have not that much pleasure in your life and you're burdened with worry and you don't know what the future has in store for you. Yeah. You're going to go and buy cigarettes because the cigarettes alleviate your suffering. It's the certain things. I remember there was this example from Sam Harris fucking years ago. It was during the, some of the more crazy race conversations around mid 2020. And I was struggling to see, uh, philosophically consistent arguments about, um, white privilege. And he came up with one that I thought was so fucking cool. And he said, if I've ever gone through TSA and I've had my bag pulled, I've never once thought that it's because of my race. Interesting. And interesting kind of white privilege. I've never once thought that I fucked up. Like I left water in the water bottle or it's a random check by TSA because they've got to do it. Like this is what they do. Yeah. That is not true. If you're of a different race. Yeah. Just straight up. Not true. And the same thing, the same thing to a degree is also true when it comes to being poor, that there are these sort of secret psychological loops that people go through about what their financial position means to their identity, how they then cope with that identity, with their behavior, which feeds back into the financial position. Yeah. That seems to be the, one of the very unseen death spirals. And it's too, it's too complex to put on a billboard. It doesn't sound sexy. Like what fucking intervention are you going to have as a politician or as a potential president going, and we are going to teach people how to intervene in their conscientiousness when they begin the downward death spiral of sedating themselves from feeling bad about their financial position, doing things that makes a financial position was no, it's way too complex. Despite the fact that it might be one of the key driving forces. Okay. How can we, how can we give people, I mean, we do, we give people fucking social media, which is some of the freest dopamine that you can get on the planet. But I think all that that really does is raise the waterline of minimum dopamine that you now need an even bigger dose to be able to break out the top of it. I wonder whether we would be in better financial positions without social media, Oh, probably, I mean, we see things, we see things the lifestyles that people pretend they have all the time we like to chase lifestyles we're jealous we're jealous people jealous species it makes sense i think that's one of the drivers of lifestyle inflation and unfortunately poor people will go broke trying to look rich oh yeah the car especially absolutely is that what's the dumbest purchase category that people constantly overspend on constantly in america it's certainly the car well and it's baked into our infrastructure you have to drive you have to drive to have a job to have to drive like that is the reality but people will over justify how much car they need needing the new car because of the new safety rating like cars would literally kill you five years ago or something like i don't really get that um a fuel efficiency like you can make some arguments and stuff especially in times like now where gas is up but people will justify the heck again like her out of getting a fifty thousand car loan for a car that you do not need what is the rough rule of how to work out what price of car you're able to afford it comes down to the monthly payment if you get a debt as long as you put twenty percent down it is a three-year term the minimum monthly payment should be no more than eight percent of your income if it is then you're getting a car that's likely too much out of your affordability range seems like a pretty simple formula yeah it's easy and it gets most people a pretty good car what does that get an average earner making fifty grand a year i don't know should we do the math i can do the math do the math uh okay um well shit then i have to like understand what twenty percent down would be so it'd have to be post twenty percent okay okay okay fifty thousand dollars because it is gross income so talking eight so it's forty thousand you can do forty thousand and divide that by twelve so i mean that's pretty chunky um no no sorry that's not eighth i did eighty percent okay so four thousand dollars by twelve it's three hundred thirty three dollars but you have to come so as long as you put twenty percent down it's a three-year your car payment three hundred thirty three dollars you can probably get a good bit of car for that money decent decent i mean interest rates depends on your credit score you might have to go a little higher then you just need to pay it down quicker and i'm okay with that you just got to put extra towards it you just don't have to freak out about it if you're doing that if you're following that rule i guess a lot of people need credit to build a financial future whilst also struggling to build credit to qualify for it because they're not going to be able to do it they lack credit history yeah but there's credit builders now there's charge cards now where yeah you know you put the money on there to spend but it's building credit uh so there's a lot more resources today than before if people are just willing to look can someone become obsessed with financial optimization to the point where they make their life worse i mean our friend our friend graham stephan i think a little right i mean i don't know is uh i don't think he needs to i love the dude i love the dude but everything you see on camera is actually what you get in reality and he will micro freak out about just a little penny he's gonna spend on lunch or something and he'd make more money if you use that mental effort on producing a piece of content isn't that a hidden cost a strange kind of hidden cost of obsessing over finances too much but you know what he has fun with this so it's actually probably not making his life worse well yeah because his enjoyment from scrutinizing and saving is greater than the enjoyment he would get from the spending yeah it's this weird i mean he was built to be a saving engine yes he's like the fucking lebron james of saving money but i think for some people if you get to that way and it's not actually your passion and it's more coming from like let's say i don't want to overuse the word trauma but trauma of like growing up poor so now you're just freaking out about it constantly i think that could you know hurt your lifestyle interesting archetypes of people that grew up without money i i grew up without money and uh some people grow up to i've never had this before fuck it we ball or i've never had this before it might be taken away i'm not going to spend it that's us you read die with zero by bill perkins no oh dude i know but i haven't really fun it's three hour read or listen or whatever and um he's just got some interesting ideas that i would be hey you i know you're doing financial audit are you sitting down with other people that are morgan housels of the world the bill perkins of the world have you got any desire to do that to because i would love for you to scrutinize financial philosophies from people that have got popular financial books it'd be it'd be fun but i also have to acknowledge even though there's some topics that are interested in learning from experts from i'm no different from just a dude off the street i'm not a fucking expert like i'll listen to people but it's hard for me to like push back against a true expert in their position that's why i like keep into what i do it's basic personal finances is so basic until you get to the crazy shit so basic until you get to the top 0.1 percent is this budgeting control discipline low index funds low cost index funds target date retirement funds emergency fund that that's the shit i'm into bread and butter you've exited all of your properties exiting yeah why um better return on investment in the stock market all day every day no hassle either i mean i'm not the one fielding the calls when something breaks but you know it's every month is up and down depending on what needs to be repaired and just even if nothing needed to be repaired the only thing you take advantage of is some leverage there which can be nice especially if the market booms but in general real estate has lost now to the s&p 500 just consistently i'd love to own a piece of commercial like you do that's great you know you get some some uh quick depreciations on there which is really nice uh so that's something i'd be willing to get into at some point i'm unwinding all of the houses i have in the uk except for the one that i i still live in that's like there's still my my place of well that's a collapsing country so that's true that is that is true but i mean i there was a period and this was sort of what i grew up with i was a partner was five years older than me in the exact same industry i'm very very financially responsible and i only child so didn't have anybody that was entrepreneurial understanding the uk system and working in the same industry with the kind of cash flow and the sort of pacing that we would get so i just followed the same path that he was on and his was every time that you get to about thirty thousand pounds of spare cash deposit on a buy to let student property between two and five bedrooms in a good student area hand it off to a manager company they'll take between 10 and 20 percent and a way you just 20 percent rinse and repeat i managed to negotiate to 12 but uh rinse and repeat okay that's that's pretty good and let's say i never talk about money this is my britishism but i've got you here so let's say uh the best purchase that i made was 150 000 pounds a five bed student property in heaton in newcastle and i would have put 25 down so i i think i i think all in with stamp duty and fees and all the rest of the stuff i think i put somewhere in the region of like 50 grand down and that would make after everything 1800 pounds a month and then there would be maybe some repairs that we needed on top so let's say 1500 so it's like 18 grand 18 grand a year great cash vehicle yeah but what you were really doing it for was to tie because it's an interest-only mortgage so you were just hiding over hoping that everything would be kept and maybe it would spew out a little bit of cash and that would be lovely but you were waiting for the capital gains that was what you wanted i'm going to hold this for 10 years and it's going to go from 150 to 200 to 250 and then it's going to be and i'm unwinding all of these properties and like the future that i promised myself has not come to fruition yeah it's they've all appreciated hooray but kia starmer's changed the capital gains tax i'm getting fist fucked off that and the gains that i thought that i was going to make didn't occur and i'm in the exact same position as you i also now this is my fault i have to pull the fucking money across from pounds to usd so i'm going to get fist fucked on the exchange and i'm going to have to do something creative in order to be able to it's company to company so it's relatively linear to do limited company in the us the uk to an llc over here but like i was thinking this is going to be you know retirement fund stuff and maybe if i'd held it for the rest of time and never left the uk that would have been it but it when i started and i was behind dave business partner that was sort of laying this groundwork for hey this is how you get to a financial level of a real comfortability that that route is is not the same anymore at all and and everybody fucking hates landlords so like something that used to be hey you're holding on to this property you're making sure that it's kept to a high standard you're making sure that we're well looked after you're a good landlord even if there's a management company in between you and us uh there's no prestige really associated with it now in the same way no it's kind of interesting i mean i got shit from the landlord thing too i mean i don't really care because it's usually coming from people that have no impact on anything in society but a couple of the places i bought were basically unlivable and i brought them up to be a place for people to live in and people like literally they were on the market people were not buying them to bring it up to live in because it was in the student area of western michigan university no one was going to live in the student section no one was buying a house to live there uh so it was places that just weren't being lived in that i made livable and actually benefited there was a period in the uk and i came in after this which is it does make sense one of the big criticisms you took a uh two bed or three bed classic family home and you re-jig all of the walls and the construction to turn it seven-bed student properties. Mm-hmm. There's no fucking family in Newcastle that needs a seven bed house in Heaton. That is basically locked in for the rest of time that this is going to be a student property. And now if you ever stop, it's called an HMO, it's a house of multiple occupancy. If you ever take it out of that, you can never get the license back. So they're now trying to reverse that back to try and encourage families to buy these houses. But the problem is, I'm never going to sell one of my houses. Well, that's not, I would sell it to whoever wants to pay the price, but no family is going to pay the price that I can get from somebody that wants it as an investment property because they are going to have to knock all of these fucking walls down and turn it back into what it was before it was turned into a student house, which I didn't do. Governments will do any rule, regulation, tax, whatever, to think they're trying to encourage something other than literally just make zoning laws better for people to just build what people are demanding. I will never understand it. That's why I love this town. I love Austin because we let people, build more houses on units now, on lots. We let people build higher houses. We got rid of parking minimums where the government forced you to have a certain amount of parking spots. It's so stupid. They'll do every policy besides just letting developers build what the market demands. Dude, there is a lot near Zilker that I drive past sometimes, and it used to have one old-style ranch house that probably had two beds, was up on sticks, walk up a little set of wooden stairs to get to it, a classic wooden ranchy house, and it had a trailer thing that was for pancakes. It must have been a business that the person had started at some point, and there was a bit of a yard outside or whatever, and then one day, no house, no trailer, just flattened. There'd been a miniature atomic bomb that went off. There are now three ground floor, first floor, second story houses built on this one fucking plot of land, and they look nice. I mean, it's still all green and insulation and wooden shit at the moment, but. And that's nice. That's due to literally Texas and the city of Austin just a couple years ago, like passing those kind of reforms. I heard that the housing problem in America would be fixed if the zoning laws were changed, that there's enough demand and enough capital to be able to make the houses. The only issue is the NIMBY problem. Yeah, it's the NIMBYs. Yeah, which makes sense. I mean, if you're thinking about your own interest in California and LA, you want the cost of your house to continue going up. Forever. That's usually where the majority of your wealth is. You can borrow against that. So, of course, you don't want more development coming in, housing prices to fall. It's economically against you, and you're usually a big voting bloc here, a big important part of local elections, and you can be a loud voice at the city council meeting. So it makes sense that people are against it, but I don't know. I'm NIMBY all the way. Build with the market demands. I think a couple restrictions make sense. I don't want it like a. You shouldn't be drilling for oil in someone's backyard. You know, I don't know. I'm overall, I'm all pro data centers because the information around it is a lot of misinformation, but do I want a data center in my exact backyard? No. Build them in the middle of fucking nowhere. That's what I like. So it's just like, yeah, there's some restrictions make sense, but let the market build with the market demands. I wonder how many people are eat the rich, they're taking the money that young people need in order to be able to buy houses, whilst also being, I don't want any houses built near me. Oh, yeah. Usually the biggest NIMBYs are the ones that say, in this neighborhood, you know, the signs, what is it? In this neighborhood, we accept. Science is real. Women are women. Yes, yes. Women are people. Black people are. I know the exact sign that you mean. Usually the NIMBYs. Yeah. Yeah, interesting. How much money do you need to raise a kid? Well, definitely less than people think, for sure, because, I mean, forever throughout human existence, you know, we were just having kids and it was fine. It is a little harder today, but going through public school, getting that amount in your insurance, all that good stuff, if you're not thinking about having to get Parent PLUS loans, like, you could do it on just a normal middle-class salary, for sure. You can have quite a few kids, but an exact number, I don't have that. I think people believe that it's more expensive than it actually might be, but again, a lot of that is what do I think I need and what do I think that my kid would need versus what is actually needed. This is an interesting part of the story, part of that birth rate debate that we had, where in order to have the kid realistically, assuming that you don't have some huge windfall of money, the total pie of money that you have to spend is not going to change all that much. In fact, it might go down as one partner needs to take time off work in order to raise them and then childcare costs and all the rest of it. That means that your lifestyle needs to take a hit. You need to, I'm not going to be able to go out for dinner as much. I'm not going to be able to upgrade the car as frequently. And that feels like that feels like getting poorer. Yeah. Where what you've done is you've just reportioned the money from what would have been car to now what now is child. Which I empathize with. It makes sense. So if you don't want to have kids, don't have kids. That's kind of what you said earlier, right? You know, we shouldn't force people to have kids, but we also shouldn't be doing misinformation of people thinking they need to have an endless supply of money to have kids. Like we're richer than ever before and people have had kids when we were poorer than ever before. Like you do need money. You need school supplies. You do need to make sure they can be on your health insurance. Like there are a lot of things you need money for, but we overemphasize it for sure. Forcing people to have kids is horrendous, but scaring people out of not having kids when they could because of misinformation is also something that never gets spoken about. Oh, yeah. Yeah. Caleb Hammer, ladies and gentlemen. Dude, you're awesome. I appreciate you. I think what you do is great. Where should people go to check in? Check out all of the shit you've got going on. Caleb Hammer on YouTube and I recommend everyone download Dollar Wise. Change their lives. Unreal. Until next time, man. Appreciate you. Thank you. Goodbye, my beauties. Dude. That was fun. This week, it pays extra to be a Milo's Rewards member. Through October 14th, members get $10 Milo's money when you spend $200 or more on an eligible purchase during Milo's Money Days. Also using your Milo's Rewards credit card? Even better. That's an additional $20 Milo's money Use it to save on your next Lowe's haul. Exclusions, restrictions, and more terms apply. See lowes.com slash Milo's Money Days for details. Milo's Money expires 30 days after issuance. Subject to change. Credit offers subject to credit approval.