Why Most Professional Athletes Go Broke & Why It Mattes to College Students

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You know, I'm pretty big sports fan myself, and so, you know, we were talking a little bit, something that always amazes us is, you know, we've seen the news, these professional athletes, they've signed these just, what seems insane contracts, I think, to, you know, you, me, everybody out there, right, making millions and millions of dollars a year. I mean, we're talking about just trying to make four million dollars over 40 years, and, you know, some of these athletes are making that in a year. And then, obviously, you hear the stories about how, after they retire, somehow, they can make all this money and go broke. And, you know, you brought up an inch to point that this actually has some relevance to college students, so I'd love for you to kind of, how does that apply? How can we learn from these stories? - How do I tie this together? - Yeah, well, just, you know, in the case of professional athletes, it's interesting. You know, we've all heard the stories, but, honestly, until I started looking into it, I didn't realize how bad it really was, and granted the NFL and the NBA now have pension plans set up for these guys to keep them from, you know, getting kicked out on the street, but saying that up to 78% of NFL players, it's 60% of NBA players experience financial distress with it in a few years of leaving the game. And I think that's, those are the important words, a few years of leaving the game. So while they're making a ton of money, obviously they don't have a problem. - Great. - You know, but how did they get in this problem? - Well, because they're, look, honestly, if you've made $5 million in a year, even after tax, let's say you kept two and a half, you could, you could live on that. You could, if you put most of that away, say you put two million of it away, and you lived on 500,000. Well, 500,000 is more than almost anybody lives on in this country. And the two men, okay, I put that into account. Next year you do the same, and next year you do the same. Well, now you've got $6 million in an account that could probably generate now $300, $400,000 a year forever without working too hard. So you're covered. So what, and so I was thinking, okay, obviously we're not talking to professional athletes here. Although I do know a couple of them from here that are playing volleyball in Europe. But at the same time, how does this equate to somebody graduating college? And yeah, so here's what you have when you graduate college, these people don't. So the first problem with the professional players, a lot of times they have short careers. So not thinking, okay, I need to save this money, 'cause I may not play for more than five years. I may not, yeah. Some of them have three years and they're out, which is tough, but with the second one, and that's not going to pertain to college students, 'cause you're working until the next 40, 50 years, okay? So we don't have to worry about short career spans. Well, the next one is a sudden wealth syndrome. You're saying, well, how can a college didn't be worried about sudden wealth in syndrome? Well, it's all relative. It's all relative, exactly. So if you've been a starving student, you're living on a part-time job and financial aid and this, that, and the other thing, and all of a sudden you graduate from college and you're making $60,000 a year, what's all out of money? That's your sudden wealth, you know what? And if you don't know what to do with that, like we've talked about it constantly here, how to save for yourself, how to protect yourself, how to do these things, that you're just going to spend all that money. And so granted, you're not going to end your working career in five years and say, well, now what am I going to do? But even so, after five years, you've made good money for five years and you look back and say, well, wait a minute. I haven't saved anything. You're now 30 and it's like, oh, my bank account has got $10,000 in it and I'm doing okay. But I made 600,000 over the last 10 years. So that's not good. So you always have to look towards the long-term future. Yes, I'm getting a lot of money. That's why I like to tell people, you're used to being poor, stay poor. That was bad, but you take two meals a day now. Yeah, take a big hunk of that money, that extra money you're getting and put it away. Save it for your future, because the future will be here. Sooner than you think. And as we've talked numerous times, the money you save today is going to be worth far more in the long run than the money you start saving in 10 years. So that's another, two, also on that same line. So you graduate, you still got friends in college, you're making money, they're not. Well, you can't let them guilt you into paying for everything. Well, home, you got the big job. You should be buying dinner. You should be buying drinks. You should be paying for stuff. I'm still a starving college student, yeah. Hey, you're right. That's called the entourage. Yeah, the entourage, which is what really kills most professional athletes. They got all their buddies from high school and college that are still there and still their friends. And now, they're making, they may have decent jobs. They're making 60, 70, 80, 100,000 a year, but now their buddies making 800,000 a year. Well, they should pay for everything. Yeah, no, it's, or even worse, they're making 80, 90, 100, and a year from you for nobody really knows what. Yeah, you're paying them to hang on. Yeah, that's, I forgot to turn my phone off. Bad thing, okay, I've done that. So there's just, you got to think about all those things. It's still, you've got to maintain the, I'm poor mindset isn't, isn't what I want to call it, but the, I need some of you once said, if you don't respect money, money won't respect you. So you never, even, you know, this is something you've had has a lot of money, right? But you still, you don't treat it as though it's gonna be endless. You don't just throw it around like it's whatever. You know, you still want to be intentional about the things you're doing with it. Oh, absolutely. I have a, a, a perfect example as a friend of mine, does construction in a wealthier part of town here. And he was, he was sent me a picture of a client's shoe collection. Well, we're talking really expensive shoes. Not gonna, not gonna name the shoes or anything, 'cause I want to be figuring out who this person may be. Really expensive shoes. And a whole, just racks and racks and racks these shoes. Probably $100,000 in shoes. Well, look, I feel bad that I've got six different pairs of shoes. Yeah, he goes like, geez, okay, I wear those too and I wear these too. So I wear four of the pairs regular. Hey, that's not about ratio though. Yeah, relative to each other. The other two are sort of super dress up shoes. But it's like, why do I need six pairs of shoes? Where's this person easily has, I didn't count them, but I know it's way over a hundred pairs of shoes at probably at least $300 a pair. So, at least $30,000 in shoes. And he said, okay, well, he's a multi-millionaire. He can afford it. That's not the point, you know. It's a ridiculous waste of money. to keep on the line of athletes and stuff. Another headline you will see right. Some bait, some card, or some memorabilia item, and the amounts that some of those things go for. And you talk about $30,000 in shoes. [MUSIC PLAYING] Winning never sounded so good. Had Crown Coins Casino, real people win real prizes every single day. Hi, this is Michael from Georgia, I140K, and finally renovated my home. Visit crowncoins.com, sign up in seconds, intercode crown, and get a free lucky wheel bonus. You may win up to 10,000 sweepscoins. No purchase needed. Code Val for new users on Void were riveted by law. Crown Coins Casino! I mean, people are spending millions of dollars on just collectibles to per one, I guess. But the same thing can happen to somebody graduating and doing to work before they know it. And they don't show that they figured out. Like I said, I'm turning 30, and I have no money. Right, it's different things. It's not collectibles. I need a new car. I need a new computer, a new gaming session, a new TV, new furniture, new this, new that. I was going to say the other thing you get that I think is pretty comparable is actually the flip side. So you talked about being the only one outside of college and paying for the people. It's also say you and all your friends kind of graduate together, right? And we talk about everybody has to have kind of their own goals and let that dictate how you spend your money. I know one of the things for professional athletes, you get into this team environment. Well, there's levels to it, right? So the rookies, they come in. Maybe they're not making as much money as these big athletes. But everybody's got nice cars, nice clothes, nice this, nice that. I mean, you're spending money just to fit in, right? So we call that the cost of living increase or whatever is all of a sudden you're spending not because you need something, but because everybody else has it. So let me be pure pressure. Yeah, I mean, there was a forget what the rock show where he was an agent. Was that ballers or something? Yes, I watched a few episodes of that. That was one of the storylines. They got the rookie they breeding and not making much money. But all of a sudden, he has to buy dinner for the whole team. Yeah. And it's like these guys are spending money like there's no tomorrow. 50, 60,000 dollars for dinner. And it's like, that's like his payroll. That's like his whole check. Yeah. And so, you know, but the same thing you have to college kids. You make it out. Especially if you have, you know, I mean, everybody, different majors, different career paths, different starting salaries, right? It's not everybody's on the same playing field. Absolutely. Keeping up with the Jones is a horrible thing. Yeah. Because you can spend any amount of money. Absolutely. And so it really does come down to, OK, you do have to sit down and think, OK, what do I want? You know, I want to say money. And it's, and it's tough. It is hard because, yeah, you've got your friends. They're all doing this. They're all doing that. You've got expectations. You know, expectations, these days are crazy on what people's supposed to do, what they're supposed to spend. You know, it's, it's up being a lot of money. And, but that, you know, hey, you're making, you're making money now. So it's hard. You got it, you got us, you, you have to set your own boundaries. You have to set the limits. What you're willing to do. Because you want to be able to do it for a long time and feel comfortable. That's part of the key. That granted, you know, like I said, you're going to be working for 50 years. But we pointed out lots of times, when's the most important time to save money early? Yeah, those first 10 years, right. I think we've gone through the numbers many times. You save money for the first 10 years. You're covered for the rest. You can, you can back up. You can, you can start spending more money on housing when you buy that house. You can start spending more money on your kids when you have them. It, but you've already got the savings put aside. So that, that's also another good thing. So you don't, you know, it's so you just say, I'll save later. Right. No, save now. Spend later and you find that you create habits. It's like, yeah, you know, do I, do I need this? Well, I was going to ask you, you know, I mean, we talk about the biggest thing being people spending money on things they may not actually need. I don't know, any tips on what is like the process you go through when you're looking at something you want to buy and then trying to figure out, do you need it? Do you want it? Maybe it is just a one you still want to get it. I mean, listen, you're the first to say never, listen, don't make life miserable just to save up money. I mean, you know, nobody, and you can't take it with you. So no point being in the coffin miserable, miserable rich. Right. Leave us on a bugan. Leave us on your spouse and kids. Well, the you've never spent it down. But, you know, I think there are good, I think, especially in today's world, right? You talk about this too. How easy it is to buy things. I mean, I want something on Amazon. I mean, you know, it used to be, you know, you had to at least add it to your cart and then check out. Now there's the add to cart. And now there's a buy now button. You can have to add it to the cart. You just swipe up and, you know, oh, it's on its way. But a process you can go through where you ask yourself the questions that ultimately maybe prevent you from, again, not from buying anything, but, you know, making sure the things you buy are actually meaningful, valuable, whatever, not just something you get. And, you know, you look back a week later and I'm like, oh, I didn't really need that. But, oh, there's a hundred bucks gone. Right. Or, you know, that really pertains to the restaurants and food. Yeah. I mean, it's, it can get crazy. How much you spend. And it's like, we're gonna be hunger tomorrow. So, ooh, right. You can do it again and again. And eventually, you know, what makes something special is how often you get it. Yeah. If you go out, if you spend all your money going out to eat every night, fancy places, well, well, there's nothing special about it. You know, it's funny how I was having this conversation with somebody earlier today. And I know things have changed. We were talking about, you know, he's talking about taking his kids out to dinner. And I brought the fact that when I was growing up, you know, we, there were six kids and we didn't really have much money. We went out to eat, not even dinner. We went out to eat twice a year. And it was one my uncle who was a train engineer who made, you know, good money, had a good pension. He brought, he brought, he'd come in on the train twice a year to visit other relatives, visit us in other relatives. We'd pick him up at Union Station in downtown LA and then we go to Clifton's cafeteria at Lakewood's shopping center and have lunch. And that to me was like, that was like the greatest thing out on earth. Yeah. You got to go to cafeteria, you picked your own food, you know, you point at what you want and give it to you. And those are extremely special meals. I still remember. Yeah, I don't think. But ask me about the thousands of other meals I've had in restaurants. It's really hard to remember them, you know, because yeah, it was food and some of them were very expensive. But I remember those because they were rare. It was, we got, we got to go out to eat. Everybody goes out to eat a whole lot more than they did in the 60s because that was back in the 1960s. But so, well, but it's an interesting thing you talk about because those are memorable to you because they're rare. And you find the flip sides true because if something's not rare, it's funny how it seems to accelerate. So, so you buy something and, you know, I'm not a psychologist, but there's this whole mindset. You're happy, you feel good about it for a little bit. You buy the next thing, you feel good for a little bit. But kind of over time, you know, if you're not, if they're not rare, it's just something you're always doing, the time between when you need to get that next thing, shorten, shorten, shorten, and all of a sudden, you're spending a lot of money because you're buying new stuff all the time that you don't really need one. What, remember, to your point, 100 pairs of shoes. - Yeah. - What? You know, look, I know, I know a woman that has a shoe room in her house. She has a room. That's just full of shoes. Now, I don't know how I paired it. There must be, you know, a couple thousand pairs of shoes. I don't, you know, I don't care if they're, you know, a hundred bucks a pair or a hundred, you know, that's $100,000 or the shoes that you can't wear a thousand pairs of shoes. Most of them only three or six or five days a year. Yeah, most of them you're where it wants and you, that's it. But, yeah, it's, in here, you know, what's one of the biggest things we hear about, I don't even know what generation we have now in college. Is it Gen Z? I think we're still on Gen Z. I think Gen Alpha just, Gen Alpha's next, okay. Yeah, you know, it's way too many. You know, they're saying Gen Z is completely burned out. You know, they go to work and they're burned out in five or six years. You know, part of it I've read, and this makes sense is, you know, cell phones. They got their, they got their cell phone at work and they're dealing with, they're answering their personal cell phone all day long. So they got the stress of talking to their friends and they got the stress of getting their work done and they just get burned out. But the other stress, and I think this is one of the biggest stresses, is financial stress. You know, they have financial stress in college, for the most part, which is, I would say, a little different though, right? Because most people are on, in college, you're on some kind of loan. If it's a federal loan, at least, it's not occurring interest until you graduate. And so I know there's some pressure you want to pay that down, but I think for at least a lot of my friends when they were in school, the ones who took loans, that was sort of a, it's not a now problem. So it was, it wasn't the same kind of stresses. Now I'm out of college. Now everything actually costs money right now, kind of situation because, you know, you're not waiting four years to pay your rent or whatever. But you know, I had an interesting conversation with somebody who, you know, went to college a long time ago. Brown coins casino winning never sounded so good. What would you do if you weren't big had crown coins casino real people win real prizes every single day? Hi, this is Chelsea from Dallas. I just hit the jackpot. One over 1,500,000. You may win up to 10,000 sweeps coins, crowncoins.com, that's C-R-O-W and coins.com, no purchase needed. New users on void were prevented by law 18 plus terms and conditions. But he was, he was telling me his story and his first two years of college. He had a pretty good job. It was really weird hours. He, he worked for the post office. He got a post office job and he did the mail sorting before the mail carriers went out. So he worked from like. 3 30 in the morning till 5 30 in the morning every day made a lot of money. So that was he did that for two years saved a lot of money. Because you know, what's one of the big things? Well, I want to get the college experience. I want to get the college experience. You know, I say my college experience was going to classical time and working 30 hours a week there. But you know, this person decided, okay, I've worked really hard for two years. I saved my money. So for my last two years of college, I'm going to join a fraternity and do the college stuff. And he can do that because he'd made that decision early to save that money. And I think more college students these days should think about that. The college experience doesn't have to be started as a freshman. Yeah, that's what really gets a lot of people in trouble. Yeah, because they get off in such a bad setting. You know, with the trying to get the college experience while they're, you know, still running around versus, okay, you know, community college. If you want to study and learn community colleges are absolutely great. Sure. I mean, California, they're basically free. I was going to say financially, there's no question. And if you want to, if you can live at home and you're getting it once again talking about California, there's no reason. You know, college students any job you have, you're going to be making over 20 bucks an hour. Yeah, so you're making over 20 bucks an hour and you're living at home, you should be able to save a lot of money. And so if you really want to, eventually, okay, I'm going to have the college experience. I'm going to, you know, hang out more on campus. I'm going to join a fraternity. I'm going to join the clubs, which are things, you know, the clubs in that for getting a job or good things. There's a way to do it without getting completely financially stressed out. I say, okay, I'm going to borrow all the money I can't. I was going to say not everything has to be financed by debt right today's world. Yeah, you can finance it by actually working. And so we're, we're a buy now pay later society, Frank. We are. And that's, and that's, you know, that's the problem. That's adds up to everybody's stress. And then when they get out of college, even though they're making more money, they got to pay these loans. And, you know, the government's not messing around on these loans anymore. Right. They don't know about the same leniency. They come after you. They will go after your wages. And somehow you avoid paying it all the way until you reach 65 or 67 or whatever you get them after your assessment. They just take it, they just take it out of your social security. They don't even ask. Like, well, we're not going to give you money if you owe us money. So, you know, part of it is also, and this also sets you up wealth for, you know, the next 30, 40, 50 years. If you don't want, you don't come out of college with a bunch of debt, then you're ahead of the game. You know, it's, yes, I know. Not everybody can do it. You know, you're going to go to med school and become a doctor. Okay, you're going to have a bunch of debt probably. You can't work part time while you're going to med school usually. Well, but then you're going to probably make good money. Exactly. Yeah. You know, you're not going to be making the tradeoffs. Right. So, it all depends on what your career path is, what you're studying in college. It's all sorts of things. And I think, you know, part of it is, okay, you just have to think about it ahead of time. You have to think, you have to, when you start going to college, you got to put some long term thought into it. Okay, where do I want to be when I graduate college? What do I want my finances to look like? Or what would I like them to look like? Do I want to owe a bunch of money? What do I want to get through college? Well, out of a bunch of money. I mean, you could also go to school part time and work more in the beginning. I said, you want to have that college experience at full-time college experience? Do it in your last year or two when you know what you want to do for a job. And then you can start going to the groups like the, if you want to get in the finance world and get a finance career, then you go to the financial management association meetings on campus, on your campus. And that's going to help you get that better job and make more money. It's not important in your freshman. It's not important when you're a sophomore. You can do it, but it's not as important because the employers, okay, yeah, you're going to graduate in three years. We'll talk to you then, type of thing. But it's, it's across, it's putting more thought into the process than I ever did. Now, I'll readily admit that. I mean, I knew I didn't want to owe a bunch of money when I got that college. As far as I got. Yeah, because it's like, okay, yeah, I don't, I hated debt. I don't want to owe people money, you know, mortgage, like we've talked about, mortgage debt's completely different. Well, there's, yeah, because there's a real real asset behind that. Right. That has value, you know, you go into a difficult, hey, listen, you don't know what's on the other side of that. You have no idea what the job market's going to look like, what kind of job you're going to get, how much you're going to get paid. Right. You know, so that's a scary thing to take on debt when you don't know what's coming out of the other side. Not as much like Med School, where we need some doctors in this country. Right. So you know, there's probably something, a good job waiting for you on the other side. But you know, but even not every doctor doesn't make a million dollars either. You know, listen, listen, both my parents were doctors and, you know, I mean, we live well, but you know, I always make this joke. You know, I went to a private private school. When I was a little kid and I used to say I was the poorest kid in school, you know, to 99% of the world we were living large and doing great, but, you know, it goes to show. I mean, yeah, you're absolutely right, not every doctor is rolling in cash. Um, Frank, I wanted to also get to another point you make that, you know, if I take this all the way back to the beginning with, uh, kind of the pro-athlete analogy that I think also impacts college students is, you know, they'll, they sometimes they say for these athletes again, you know, you come in on this rookie contract, you know, making as much money. But if you get through the first three, four years, that, then you really get paid. And it's funny how it's not just the guys who only lasted two, three years and didn't make the crazy amounts of money that are going broke after they get out. That's the guys who are getting that second, that third contract and making a ton of money and they're still going broke when they leave. And I think it's the, you know, somehow, and I don't, and maybe this is part of not really thinking about it as you think, maybe you do an okay job, um, at 60,000, you know, like, you know, I know how to live on 60,000 dollars, you know, and so when I make 100,000 or 250,000 or a million, man, I'll really be saving money because, you know, man, if I had all that extra money, that could just be saving it. And then they make all that extra money and then I'll saving it. All of a sudden, their expenses are moving at least up as much as their, their, their raise. Well, that's, and that's what the, you know, one of the articles was, you know, expense creep. Yeah. It was here, you know, income creep, but not expense creep, you know, and that's just, yeah, you just, you just keep adding to your expense while I'm making the money, so what the heck? Yeah. But it gets to where I was going to say we're, we're, you know, if I take this down to the college, because it's the same way, I mean, you know, it's whether, again, all relative, whether you're making $4,000,000 a year or $100,000 a year, I mean, you, it's amazing how the problems are the same for, for people. Um, but you always talk about paying yourself first. And so if you have kind of an automation in place, I don't know, let's say you want to save 10% of what you make in a year. And if you can, and I, I actually, you know, this would be an interesting thing. Can you set it up as a percentage of what you're getting paid? You know, you talk about having the money taken out before you ever even see it, because I was going to say, if you could just set up as a percentage and it doesn't matter if you're making 60 grand, 100 grand, you know, they take that 10% out. You're living on 90% of whatever you make and you're hitting your goal, regardless of how much money you're making. Oh, yeah. You know, if you do that, you will be fine and retirement if you're in your entire life. You take the 10% each year and put it into a retirement account, you'll be, you'll be in good shape. Now, you know, you got these financial experts that make a lot more money doing this and we do, because we don't make anything, but doing this, but you know, they say, well, you need to save 20 or 30%, okay, that's, that's quite honestly not realistic. Well, and that's, you know, I think, which is a whole another thing, because you tell people, you need to say 20, 30%, well, there's no way I can do that, so I'm not going to save anything. Exactly. And, and they also forget, I know retirement or Social Security is a dirty word, but whether it's going to be around or not, and I honestly don't know, there's, there's easy ways to fix it if the politicians are going to step up and. >>Winning never sounded so good. What would you do if you weren't big at Crown Coins Casino, real people win real prizes every single day? >>Hi, this is Chelsea from Dallas. >>I just hit the jackpot, one over 1,500 K. Visit CrownCoins.com, sign up in seconds, enter code Crown and get a free lucky will bonus. CrownCoins.com, that's C-R-O-W-N-Coins.com, no purchase needed. Code ballot for new users on Void, we're rated by law, 18 plus terms and conditions apply. [MUSIC] >>Do it right, but, you know, that's actually a lot of money being taken out of here. If we'll use the, the, 100,000 salary number, well that means $12,400 has been put into so security for me every year. It's a lot of money. And when you get, if you, if you paid the maximum every year for 40 quarters and you get to the point where you're, you're going to retire, you know, the absolute last day collect retirement. Nowadays, you'll get about $5,000 a month to start with, maybe a little more. And, until you die, so you're basically getting in a nudie. And it goes up with inflation, which is normal, the nudies don't go up with inflation. You know, I always thought, you know, they ignore that when they say, well, you know, you have to have this much safe, you have to have this much safe. You've got to have 10 times your, your, your income by your time you reach a certain age. And that was ignore that, so security number, right, because I ran the numbers, depending on what discount rate and that you want to put on it, that's really about worth about a million five in savings, that no one takes into account. So I want you to need $2 million, I got a million five and so security. So all I need is a half million, probably not, but yeah, my point, yeah, I think you're absolutely right. Don't make the, the number so hard that people don't start, it's like saying, we're going to go climb out of the wrist, well, huh? I haven't climbed, I haven't climbed any mountain. Okay, well, maybe we'll start, we'll go up, we'll go up here and say, gave real mountains and hike, do some hikes and after a while, we'll climb to the top of Baton Pal, it's about 10,000 feet up and we'll wait till the summer and we'll do mountain bald you, which is a little higher. And then, well, maybe another year we'll try Whitney, which is actually very hard height because you can start going to go up and down in one day and then you climb Mount Everest. You don't say, oh, I'm going to go, yeah, I'm going to go climb Mount Everest, well, bad idea. But the same with saving, well, I'm going to save $10 million, okay, why don't you, why don't you, like I said, try to save 10% of your pay, you're, you're something really practical. And the reality is, for everybody, it's different, right? So if it's not 10, even, you know, because this could work in the flip, sometimes you have a number that's so big, you don't get started, sometimes you're like, well, I can only save 1%, and it's so little, what do I care, I'm not even going to do it. You don't want to do that either. I mean, you know, it's whatever you can put away. Right. And we don't know, that's absolutely because we don't know everybody's circumstances. You know, maybe, maybe they're, we have a lot of first gen students here, and you know, I know one of my grad students from last year's got himself a good job recently and he's so happy, because now he can help support his parents, they're, they're, they're poor. Yeah. There's no other way to put it. And so to him, that's very important and more important than probably saving a lot of money, which I can't argue with that. He's not taking the money and going out and buying flashy cars and fancy clothes, he's, he's helping some shoes and shoes, yeah, shoes. Oh, and don't get me started about the 15 Rolexes. Yeah, you know, even an octopus, as long as you got eight arms, yeah, and you can't even wear those in Southern California, because people follow you in Arabia. So what's the sense, but it's, yeah, everybody's different, everybody has to, to think about their own way, but I guess the key is you do have to think about it. You'll be much happier, you don't need to end, you don't need to, you know, drive yourself nuts over it. You do the best you can, and over the long, long term, your best will be fine. Well, I was going to say, and that's the only thing about it is the worst thing is just not doing something when you could have done it. And I think, you know, one of the reasons we do this is because you do say a lot of people they get to 40, 50, 60, all of a sudden, when there's five, 10 years to retirement, and I wish I had done more when I was 20. I got to save a lot of money. Yeah. Well, the problem is you don't have the interest compounding for 40 years, you know, stress. Try saving a lifetime's worth in 10 years. Right. It just doesn't work. Yeah. And I know, and that's what, that's what a lot of people think. So okay, well I'm going to graduate college and I mean it's not as bad now because a lot of people Put off having kids until they're probably 30 or so. Yeah, so they do have those early years to save up Which I think is good. Yeah, we're gonna gonna argue about whether having kids earlier late as better There's pros and cons are both Yeah, sometimes I think you know having them having them early is good. You're you have them. Yeah, you don't have that much money But okay, well you you don't have to spend that much money out of kids are fine. They don't need it And then but When then when the kids are out of the house, you're still young enough to enjoy your time Yeah, versus well, we'll have them when we're in their 30s or more financial stable stable 50 by the time they get out of the house 50 60 yeah by the time they're they're up and gone and it's like well Wait a minute. I don't have that much time left So it's it's a give and take everything's given take and sometimes You take what life gives you because who knows what's gonna happen? But the key is yeah no matter what So I have to Conversate with some of the other day you know because they you know about How that I Know we're really I'm wandering far field now, but it's just popped into my head You know because we're talking about kids and that you know you can you can basically set your your child up for financial success By doing one thing That's the day they're born Put $10,000 into a tax deferred account form a college account that can eventually roll over into an IRA or something If they don't use it for college because Now you've got you know, we're talking about having 40 to 50 years of compounding You're halfway there by the time they're in college whereas Now you've got 70 years of compounding So I can put $10,000 in an account. So here we can put that on the spreadsheet Yeah, you're gonna do it in your head. We can we can do the math. So we're gonna we're gonna cheat a little because we're gonna use simple math So the rule is 72 right? So the Vanguard large cap growth fund Over it's over a lifetime is average over 12 percent So 72 divided by 12 is six so that money multiple that money dupe doubles every six years Okay, assuming the market continues So Six years we got 20,000 12 years. We got 40 18 years 80 80 24 years 160 30 years 320 36 years 640 42 years 1 2 8 256 48 years to 2.2 and a half 2.56 54 years 5.2 5.1 just go to five Okay, you may 10 10 million dollars. Yeah, one more twenty-one dollars Ten thousand dollars in an account watts and the market keeps performing the way it has been Granted some years will go down some years will go down other years will go up more In 70 years you have 20 million dollars Plus whatever they put into it Plus they don't have to put anything in Yeah, I know, but imagine what that number would be if they start putting money into right they So I'm not I guess I'll flip side of me saying well wait a minute if you do that then your kid never has to save any money That's not that's not a good way to train will live But it's it's the time the time that counts Whereas okay, so Little the same let's go back to the same thing We didn't save any money Until we're we're 40 we're gonna start saving, you know, and after we have kids and so we got 30 years to save So I got the same thing ten thousand dollars in an account and six years we got 20 12 years we got 40 18 we got 80 24 we got 160 and 30 years we got 320 320 Or 20 million That's like the same thing. Yeah, same thing which one do you want? Yeah, it's You know, that's the strongest lesson. I can say for anything is just start saving as soon as you can Winning never sounded so good. What would you do if you want big had crown coins casino real people win real prizes every single day Crown coins dot com sign up in seconds intercode crown and get a free lucky wheel bonus you may win up to 10,000 sweeps coins crown coins dot com That's C-R-O-W and coins dot com. No purchase needed code valve for new users on void were prohibited by law 18 plus terms and division's plashing And the other thing that the articles I've read about Professional athletes why I lose so much money bad investments Sure, they get into deals with their buddies. I was gonna say it and This one may be relates Less sort of college, but it still comes up. I think for colleges is you know for them. I think it becomes We card against this they're They're not being boring. They're investing lots of money in Very specific businesses or opportunities and if that business goes bust Well, there goes all the money you put into it, right? And it's not born, you know, this be 500 not going anywhere You know and all the all the best companies in the world are not going out of business or Quite frankly, you don't need your retirement anyway. We got big bigger roles, right? So You know that and that's part of the problem is I don't think a lot of times they set aside Even a percentage of what they're doing just to as you always say be boring. It's You know, they want to have because here's you invest and they ask me 500 I guess yeah, technically by the definition of owning stock you own a percentage of the company You know in a real percent you not make any decisions right here. What's going on? You know, but they're investing to buy you know, I'll give you $5 million for 20% of this company And we know what what is it one out of every 10 companies gonna make it? well, well On average right one out of 10 startups will do well the problem is Those are startups that you've actually then it and tried to pick from about your friends I've got an idea about your friends who oh come on man back me I all he is a hundred grand to get this thing go on what they'll make us a lot of money You know come on you got to you're making eight million dollars a year and you hear you know I know you were talking professional athletes, but you hear those stories about just Families regular people sure, you know, oh take a hundred out of your 401k take take 50 grand You know, I'll pay it back in an interest. Great No, it's Yeah, you have to think about it. This is your future. Yeah, and yes, you not always can you just say no, but Sometimes the answer's just no And I look I've done a lot of dumb things with money and so I Should have said no more often The things well, and the tough thing is especially when it's family, but close close friends family, whatever Sometimes they don't even expect it to be alone Hey, just just help me out you got it. What do you need it for right now? I you know this and that I have to say one of the best stories I heard I had Somebody who's teaching actually a personal finance course here at Cal State Long Beach, and you know she she had a Friend she had met somewhere along the way and her professional crew went on he was high-ranking executive of a company, so you have money, and you know, I think she was trying to start something up and and You know need to 10,000 dollars or whatever, but and he was just gonna give it to her, you know, just just Yeah, I don't know, you know, you make it millions of dollars. What are you gonna miss 10,000, but she insisted? Hey, no, let this be be alone, right, and I think The fact because I think that shows again a level of respect about it, you know, it was important to her to pay it back And that that's the thing too. I think For him that that felt good too because sometimes you get in the situation friends and family. They just expect right that you're gonna chip in And if you get paid back you get paid back great if you don't know, oh well, you know, there's no real agreement there And I think that's a big cause especially you know, I'm sure it can happen for college students I mean you hear about it more usually with somebody maybe my age coming to you somebody who has more money saved away But I'm sure it happens among friends you know people your age your own peers it it it it does it happens a lot and people you know people all come on you've got it yeah yeah I've got it I'm keeping it I need it you know it's for my retirement it's for my family which gets back to again be to your point have some kind of plan right right for the future because that is always the argument well what do you need a for now what's not about now it's about I needed in I'm gonna need it in 40 years and what it's gonna be worth in 40 years to live right well yeah there's there's a saying that you never lend money to family you just give it to them because you're stuck with them for the rest of your life yeah and if you lend money and something happens that it just becomes an issue for the rest of your life thanks to giving becomes difficult Christmas becomes difficult Hanukkah becomes difficult whatever family holidays you you know family reunions whatever it's just which is another way I think of being thoughtful about the money too when you when you give it out so you know when we talk in the in the grand scheme of you have goals and you're saving and whatnot you know I would treat those requests the same way I treat when I go to the casino whatever money I'm going in or decide I'm willing to give in my mind it's it's gone whatever your donation is to the to the casino while they're donating to me but oh you're always winning huh but you never hear about the losers you know you never do now but you know in my in my mind what I come out ahead or not whatever it is whether I get paid back or not would I be okay if this is my if I didn't have this money I still on track to hit my goals without that oh yeah that's that's a big thing never never invest money you can't afford to lose so like never take never go to Vegas with money you can't afford to lose it's because you think different you're gonna treat that money different you're gonna react yeah my best example is this friend of mine he wanted he he had this program he was doing commodities or you know Forex trading it may have been through CME you know we're gonna do for it and he was he was doing the simulator every day every day tell me how much money he was making on the simulator you know you know this so easy I can make so much money we're gonna yeah I need to do this with real money real money real money so finally I go okay smart guy I'm tired of listening to you let's have you do it with real money you know and it wasn't much I put up a thousand dollars he put up a thousand dollars and we did it with real money well about two weeks later we both had two hundred bucks you know because it's different with real money than it is with not real money it's not real money what happens when you hit zero on the simulator I just reset the simulator yeah you reset the simulator yeah exactly that's that's the key and so real money you do things differently Frank well you know I mean we're we're hitting our our time here did you want to you know we've kind of we tried to stay on track but we bounced around on a lot of good topics around you know trying to help people how how can you listen we're all it's a long 40 years a lot of people out there you're gonna work really hard try to keep as much of that money in your pocket as you can right you know you do want to have some fun for all the work that you're doing and so hopefully we've helped tonight sort of talk through ways to keep as much of that in your pocket as you can but Frank did you want to have any kind of final thoughts on put this in a neat little bow for us well I guess that the the whole key is you got it you got to put some thought into it yeah you got to start making money what do you want what do you want that money to do for you yeah I would think that the worst thing in life not I mean I thought the worst thing but the worst thing in a financial life I was gonna say you have to be we have to be careful yeah worst thing in a financial life would be I used to have money and now I don't I've heard people say that the worst thing isn't being broke it's it's having money and then you got to go back to being broke right yeah it's if it's what you know if being frugal is what you know then it's easy to be less frugal later when you're feeling more comfortable when you have more assets when you have more money but I would think it would be horrible like I said I was broke then I made a bunch of money spent a ton of money constantly and now I'm broke again well that's versus okay I'm gonna be I'm gonna be frugal I'll make more I'll save more I'll spend more I'll make more I'll save more I'll spend more but they all stay in sink so that even if things go bad your career something happens with your career something happens with your job 30 years down the road you go hey it's okay I got savings I can do something else not make as much money and it's not gonna affect me because I have the savings the drawn or the savings to create the extra income on to me that that would be far more preferable you know to get there it's it's it's it's it's not a sprint life is a long is a marathon it's it's it's the longest marathon you're gonna be in it's your whole life you know there's some words of wisdom yeah yeah that made absolutely no sense but and yet it was true you you want to I don't I'm not gonna say you want to end up at the you know the very says I'm gonna I want it's you know my last dollar is gonna be spent on the funeral well it doesn't work that way because you don't know what you're gonna die you know and things change you might want to leave some money you might want to leave your spouse some money and you might want to make your kids some money or you might want to leave the church some money or yeah you know you it's your money do some good with it or do what you want to do yeah and I think really that the end of the day our our goal is we want people to get to a point I mean listen when you're young you don't really haven't made people don't stress about it but I think most people stress about wanting to have some level of financial security and comfort I think our goal is we want you to get to a point where that goes away at some point you have a level of hey I'm gonna be okay yeah whatever happens tomorrow I'm gonna be okay we want you to be comfortable right that's that's that's that's that should be the goal I'm comfortable I don't have to worry about stuff don't have to worry about stuff all right well Frank thank you for coming on and thank you for those listening out there if you want to hear more about how you can live a better financial life definitely check us out wherever you get your podcasts or at our YouTube channel at the Mechanal team method Frank appreciate as always and we'll see you all next week on another edition of the Mechanal team method winning never sounded so good what would you do if you want big had crown coins casino real people win real prizes every single day high this is Chelsea from Dallas I just hit the jackpot one over one million five hundred K visit crowncoins dot com sign up in seconds intercode crown and get a free lucky wheel bonus you may win up to ten thousand sweeps coins crowncoins dot com that's CROW and coins dot com no purchase needed code valve for new users on void were prohibited by law. 18+ terms and conditions apply. 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