24-Year-Old Is Throwing Away His Entire Future | Financial Audit

my name is Ryan O'Malley I am 24 years old I live in Austin Texas and this is financial audit new for a living in Austin Texas so I own and operate a video production and marketing company called oh okay so you own it how long have you been doing that um it's kind of probably about in three years now me and my buddy started in college at the University of Alabama and then moved out here about a year and a half ago what'd you guys choose here why uh we do a lot of or at least we used to do a ton of live video and concerts and so live music was a big reason we moved out here and then ended up getting a lot more into the corporate stuff out here instead of the music which was ironic so how's the business doing how how many people are in this ownership package so me and my buddy have owned it together and we actually have a full-time editor who's been with us since March of last year and we just offered him uh some equity in the company uh over Christmas because he's been so good for us and so now it's the three of us okay and how how's the division of ownership Jake has 20 or 80 I have 20 and our editor Ingram has five percent now oh so why is your percentage so low compared to Jake so when we so when they started the company I wasn't actually an original founder it was Jake and one of our other buddies Travis and they started off just having fun playing around with it in college shooting people that were coming performing for fraternities and so I ended up meeting up with them when I was also looking at like an internship with another company that was doing something similar in Tuscaloosa and I just became good friends with them and they were kind enough when they were forming the LLC to even offer me uh five percent equity in the company just because I had kind of uh become good friends with them and it was clear that I was going to stick around and so Jake had was pretty much the leader of it he was doing all the heavy lifting put all of his money into the equipment and everything and so me and Travis were both going to take five percent which he didn't have a problem with either because he was doing other stuff it was more so about just having fun what we were doing and then I actually got a I had a camera a Sony a73 that I was able to invest along with some other equipment and so that's kind of how we did it it was based on how much equipment we had put into it and so that's how I got up to 20. and if you want to invest in this company I don't have an option to do that but you can And subscribe and every subscriber helps grow this channel so thank you to everyone who has so far what is your position in this company other than just owner do you have a title yeah uh We've slowly fall in more intervals it used to be a little bit of everything but now I'm calling myself the Chief Operating Officer uh because I'm taking care of myself okay yeah so I'm the Chief Operating Officer and really I've just been handling more of the day-to-day operations especially since Jake started this other company the podcast Studio views and you don't have any stake in that no no I just help them out here and there with that so what all exactly what are what are some of the things that your company does we do we specialize in video production and so that can be uh Live Events where we've done multi-cam live setups we do recap videos We Do music videos and then the other side is a lot more corporate where we do converting advertisements brand videos testimonials that kind of stuff how much business you all got a month on average um as far as like total revenue or as far as like different gigs um we probably work with on average between three to six clients per month okay now what's the revenue revenue for us it varies but probably averaging around um it can be anywhere from like 15 to 25k a month okay for the company yeah okay it's a little lower than I was hoping for we yeah I mean okay so are you paid are you getting distributions on your ownership we just pay out whatever we think we it kind of varies we just kind of talk about it we're pretty relaxed with that stuff most of the money that we make we put back into the business whether it's reinvesting in SEO or equipment so what are you bringing in a year um probably average I'd probably pay myself around 2500 a month okay and Austin that's okay yeah surviving but doing doing fine we have another job or is this it uh I'd make some other money uh doing content creation I have uh Tick Tock and I make some off of Instagram as well and then well you can't make much of a tick tock tick tock pays crap no I know nothing crazy it's just usually uh that's kind of whenever I have like a viral video pop off I'll get like a good thousand here from here and there from that yeah and I've done a couple like brand deals which yeah that's what it is that's where the okay the lucrative nature is so it's not like a strict distributions of like here's the profits for this month after everything you get 20 no we're we're really good friends and we are both very committed to you know making the company the best thing it can be and I'm also just not very neither of us are very uh materialistic and so we've never really had a problem with what we pay out what are your guys's expenses on a monthly basis [Music] probably does that would you include uh what we're paying ourselves or no before before ownership pays themselves um so you can include you know paying your editor yeah um I want to say probably like 6K okay 5 to 10K depending on the month somewhere around there okay so you guys are really only having a profit of anywhere from five to fifteen thousand hours a month depending um somewhere in there yeah we've had better months where we've gotten big gigs oh for sure like we did on average you know because you probably have several months yeah probably around there not much okay yeah so is the month you is the money you just told me also including your rent um as far as uh the 2500 that I'm paying of space right oh yeah that includes the expenses but it does what's your what's the rent of this space um I want to say it's like 1800 what's the square footage um I don't even know that it's a uh compared to my condo I'd say it's about two of this room oh two of this room okay so yeah like and it's 600 it's in a a co-working space and we just have a private office upstairs we love that yeah I mean free snacks um it's similar it's called the cathedral ATX it's uh over an East 16th and it's um it's really like there's a few private offices upstairs there's a few cubicles downstairs and there's a big open space where people can come and go and but it's not like a film studio with like a sound stage and no no okay okay that's making more sense yeah we've been looking at spaces and I cannot find anything even close to that right oh well so I for wait what do you mean Film Studio as in like uh somewhere you can film oh so that's the other thing they have that over um the podcast and photo video Studio that's pouch six Studios that's the one that my partner is yeah but you're not a part of it no I'm not a part of that one okay I wonder what their rent is on a monthly basis more yeah downtown Austin oh okay well that's a defensive way to do it so 2 500 a month so you bring out on average now it's not that much what are you sending it aside for taxes because this is all just distributions from the company uh yeah I try to I uh try to yes I uh it I've had some you know tight months here and there but whenever I have uh what is your rent my rent is I'm paying it's a thousand dollars plus uh utilities which usually comes around to like 11.50 something like that okay okay so 46 of your pre-tax pre-tax not even your post taxes you have to set money aside for so more than half of the actual money that you have access to goes just paying for a roof over your hand yes sir no it's not even a crazy expensive rent for this area roommates or is it one bed yeah I got a roommate see okay it's not even we love each other though what do you think about your financial situation because you're laughing so I'm curious like what do you think about your overall financial situation I am in no place where I feel I need to panic why um because I'm an entrepreneur and I don't have a problem with um not seeing immediate financial success in something I know this business is going to grow and I know I'm going to take on other Ventures As Time grows and as uh we expand and I have a little bit more time on my hands for other Avengers so it's one of those things where I like I said I'm not a very materialistic person as long as I have enough money to go out and have some friends with friends and fun with friends on the weekend I'm not too worried about it that's more important than your financial future um I wouldn't necessarily say it's more important but I'm not necessarily putting one over the other I don't believe that I truly have to save money at this time in my life in order to have a successfully financial future go ahead and try to justify that before I destroy that concept I would say uh more possibilities are open to me and my future oh okay but how does that negate saving money now well I'm just saying I don't think you have to save money at this moment in order to make more money in the future I understand I'm not making a ton of money right now and I'm okay with that but I believe I have great possibilities in my future that just haven't reached me yet I just started getting into acting a little bit maybe I'll land a big role and make some money that way maybe I'll hit a new brand deal when my social media content creation side takes off a little bit more I know there's good stuff in my future I want some maybes that come with hustle yeah you can say that like do you have any like planned objectives and like steps that are being taken along the way in order to hit these larger goals that we have that you can document on a Time basis of when you think you'll be able to hit things yeah so that's definitely one thing that I'm trying to make a bit a little bit of a better point to do is you know have those uh stepping stones and those goals along the way as of now I'd say I'm trying to get some podcast content going while my friends have made the studio and I believe that will help me on my content content creation side of things and then as far as acting goes I'm just trying to you know get into more things here and there so that I can meet more people in the industry and find better opportunities and then as far as the business side of things goes um every month we have you know met new people and found a little bit better side of success on the business side and so those are just small stepping stones but we definitely could be doing more and I could personally be doing more so if you had a dollar right now but you could turn that dollar into 17 okay it's a pretty good deal it's not a bad deal yeah how would you feel about instead of that just actively choosing not to I think that sounds pretty silly Caleb that's pretty silly but you're choosing not to in this in What scenario in one scenario with the age you are now versus retirement age one dollar right there put into the S P 500 average 10 a year into retirement 30 years taking advantage of compound growth as in it continues to grow on all the growth that has taken place in the Years period previous does that make sense so far sorry no I'm okay you slow it down for me a little bit I'm not too uncomfortably literate one dollar ten percent S P 500 okay and S P 500 the index fund S P 500 okay you haven't heard of it I've heard of it I just I really I'm not too educated I know that no that's okay we can go into that but uh I don't want to um stray too far from the example okay one dollar put into it averages ten percent a year so after a year a dollar and ten cents and instead of it just growing at 10 from the dollar it's now growing at 10 from the dollar ten cents yeah so it continues to compound forever so one dollar from where you are now to retirement that one dollar turns into 17.45 dollars pretty good and that's a guarantee is that change is that fluctuate well nothing's officially a guarantee but that's using the average of What the S P 500 has done since its creation on a yearly basis okay when was that created oh when was that created 80s 90s okay 30 40 years hmm let me confirm so I guess what if I'm going to retire in like 40 years how many people have started how many years I don't know like four I said 40 sorry cool I was doing 30. um okay uh I guess I'm just curious and I'm just genuinely curious how many people have invested in the s p when they were in their 20s and got into their retirement then I guess well Americans suck at investing that's why most Americans can't afford an actual retirement or What statistic I don't have the statistic off the top of my head that's a b500 created in the 1957 I was pretty well off but what is it like a quarter of America or a third of Americans can't afford a 400 emergency right now so I wouldn't want to compare myself to who's doing the absolute worst I would want to be in a position where I'm doing better but this stuff that you're giving up by just like okay well there's other things if you put ten thousand dollars in right now it'll be worth 174 000 if I put say it again ten thousand dollars S P 500 right now in 30 years seems like a good deal to me pretty good deal but you're literally giving that up well I guess uh I mean I didn't even know that was a thing yeah well let me make this other example the ten thousand dollars if you wait ten years to just F around you know and hopefully these business ventures work out and that's cool entrepreneurial sport it's good doesn't mean we uh should all of a sudden just negate these other avenues for taking care of our financial future don't think I'm anti-entreneurial I'm all about it I'm doing it here yeah um okay I'm also taking care of myself on the side for retirement so what 174 000 great if you put ten thousand dollars in right now that you save up by working hard or you could wait a year invest the same ten thousand dollars now because there's less time it's only worth sixty seven thousand dollars you wait a year 10 years 10 years so and you're you're assuming this is over a 30-year period yeah you've lost like well they went from 30 to 20 years 30 20. because you waited you waited some time so you lost over a hundred thousand dollars interesting lost over a hundred thousand dollars because you waited ten years to start investing okay if that makes sense yeah yeah okay what are your thoughts on this now I I mean I love it I I guess um I would ask you with what I'm making right now how would I go about you know well how many hours a week are you working um on everything total uh yeah oh okay no no on the distributions of the average of 2 500 a month on that how many I guess so let's see usually start it I guess on average like around 50-ish hours maybe a little bit more okay well return on investment of your time is pretty not great uh yeah it's I'm happy to you know it's more so like what's the goal for this company because now your business partner who owns the majority share and this is opening this other business so what are we doing um I guess uh what like a five-year goal for us yeah well have you guys chosen that or are you just saying it it's now we we uh need to get a little bit better about goal setting and stuff like that but we we've talked about our ideas we well what's the most concrete thing we have as of now um I guess most of our goals aren't necessarily revolving around financial goals it's well it's a business businesses have to make money absolutely you have to survive and I'm with you I feel like our goals are more so around things that we'd like to shoot we're both videographers and that's why we got into this and we do it because it's legal for the business for the business I guess um ideally in the next three years we'd want to do over a million in Revenue okay [Music] how are we going from 180 000 to a million um well I think last year we did I think last year we did like 215 so I might be a little bit off with our numbers well I went on your low range if you went to your high range though okay um yeah well so one of our other Buddies the one one of the guys that actually convinced us to move down here he has another video production company that he's been running for a couple years longer than us and I want to say his we're uh as far as growth has gone for us in the last three years we're on top of his numbers and he hit a million in Revenue I think in his fourth year well good for him but what are you guys gonna do well so I think we're on top of his numbers and so he's been helping us we're on top of his numbers where he was at when he was in three years in uh it's gross I see what you're saying what did he do what happened um he just got a lot better at the business side as far as treating his business treating the video content that he was making more so his video assets as opposed to just videos and so he got a lot better at doing um valuing the work that he was given so if he was given it to a client that was going to make a million dollars off of something instead of just charging ten thousand dollars for this video he charges a percentage and so now suddenly he's making two hundred thousand dollars off of a project so he got a lot better at the business side and he's been helping us with that and so the business side yeah that's where a lot of creatives fail I mean I studied music in college and on the music composition side which is where I was in there was a lot of good composers a lot of people absolutely suck at the business side in fact I don't know if anyone I went to school with the least spoke well on the business side yeah one of my teachers did but um I mean maybe they just didn't you know maybe they were good but they just didn't speak well on it but either way a lot of the creative professionals not go to the business side of things and that's what it really sounds like from you guys Jake editor and you so I guess as far as um optimizing our Revenue I'd agree with you on that but as far as business relationships and everything on that side I'd say a word let's go Stellar at that yeah we that's what separates us from most creatives we're always answering our phones we're never late we're not we're not you know like I'm not feeling creative today I can't okay so you guys are doing the basics we're very yeah we're very very good at that stuff okay well now it's time to go from Basics to like uh medium yeah I guess so we've we've done we've taken some steps we last year we hired another uh on top of our buddy who's been helping us we hired a video production company business coach you guys are hiring a lot of people for 200 000 well he's a business coach worth the investment in our eyes and he helped us take that step up from um you know just charging minimal to he he got us a really big step up truly um and so that helped us with what like pitch decks and just really the whole pitch process as far as getting our confidence up to be able to ask for higher numbers because that's really what our content was worth okay well good I'm glad you guys are starting there let's look at your money though I need to know your financial situation because this isn't an audit on your company though it would be very interesting to do that it's an audit on you I don't know what's in your checking account I don't know how much came in I don't know we got screenshots what's in your checking account right now ah checking account right now um you can look I don't I I want to say it's like 200 bucks right now it's scary when things have minimum payments this is true okay why um we I'm waiting on a couple things uh we I guess I have that coming in tomorrow I have a another payment of fifteen hundred dollars coming in in either tomorrow or Saturday which is nice okay so I have that and then so for someone 200 in there Uber tripping's a stupid expensive way to get around Amazon Amazon event went out 46 bucks sending your dad a thousand why is your dad getting a thousand dollars uh he owns the property that me and my brother live in oh they just uh invested in it okay yeah okay well that's a good connection I have no paint off your Chase Card probably a good thing to do and ubering Uber and Uber very so do you have a car uh I do it's uh been uh I haven't been able to use it for a minute just because I need to take it in the shop but when I was ubering that was when I was up home in Chicago and I was visiting zelling out 556 bucks paying off your Chase Card lift ride left right your dude you going crazy Wendy's Hoover's Cooking home slice love home slice I'm very hungry right now MMOs East bar then moving out money Austin Airport Apple subscription Amazon Apple subscription Chicago parking Uber tripping oh yeah you're spending so much on just getting from A to B in a car Amazon Fairgrounds Shopify Google storage Lyft ride again Amazon Uber trip lime ride venmo poppy Popeyes signature iho IHOP I have Emily I've been I have in a minute is that not signature IH I can't imagine it is no that wouldn't make sense I feel like I saw it like that once but I could be wrong and so yeah I mean you're just spending so much on getting around yeah um I'd say most of those Ubers and lifts were probably when I was visiting in Chicago and then the ones that weren't I'd say it's when I'm out drinking and I don't have another one with public transportation uh I guess to get to uh um that's not just to and from airport that was a lot of oh no no for sure uh I'm I I'm in the suburbs of Chicago sorry I should have clarified that um not awkward Karen what's the balance on this credit card um bouncing credit card Pro as far as like what's on it right now what's owed uh probably like a thousand can you pull up your credit card more 1400 yeah why oh here we go you don't have 200 in your checking you have 59 well I've got money in my uh PayPal and my vmos I guess that's that's kind of throwing it together thousand four hundred dollars on your card minimum payments forty seven dollars so what's oh this is insane for just that balance which isn't even crazy in the grand scheme of American credit card balances 33.16 of Interest you're losing 33 on a monthly basis sorry to say that again interest charged because of the balance you're holding 33.16 for the past month oh I don't even think I was aware of that do you not even know interest charged oh oh sorry I brain fired no I gotcha I okay misheard misunderstood forty dollar payment there in the last month dude this is terrible and thirty dollars of interest there really everything and then Pueblo Viejo pretty good tacos pretty good but what are you doing when you already have a balance nothing upsets me more than someone spending on a card that they should be paying off and they're losing so much in interest you know this Pueblo Viejo you're losing on a monthly basis that single that much in interest so what would you recommend as far as uh that's the first thing I should focus on is paying that I don't know yet okay who knows how far this Rabbit Hole goes I don't know I need to see what this interest rate is you have fifty dollars of rewards you should put that on the statement balance hope that get this down that's a good idea 28 interest dude did you know that yeah I guess so what are you doing why what's the purpose why why are you in credit card debt um I suppose oh boy where are we going now now searching to see if you had Credit Karma yet I'm gonna have you download it in a second but why are you in credit card debt um I guess I just didn't hmm because I'm paying more on that I guess in my mind it wasn't any different than um like when I would spend on my credit card as opposed to spending out of my checking because I figured I was getting rewards back yeah but you're losing 30 so yeah I guess that really doesn't make too much sense no it doesn't make sense at all yeah yeah I got no answer no why are you holding a balance why has this not been something you've considered paying off um to be honest man it's it's been a little bit just uh paycheck to paycheck I've been taking what I can here and there if we're paycheck to paycheck we're not able to pay off a credit card are we in the right line of work are you doing what's responsible for you yeah I'm I mean what do you mean you're losing 30 interest on a card you can't pay off and you're uh more than 50 of your take home is going to rent I think the way I look at my scenario is I love what I do every day and I'm able to pay rent and I'm able to pay for food and you're not able to pay for food that's incorrect that's incorrect you're putting it all on debt you cannot afford food I'm able to get food you're able to get food by using debt you're not paying for it you're using someone else's money I mean I haven't used that credit card in like I think just once in the last like month but if you can't pay off that credit card because you don't have enough money left in your checking account then no you cannot afford those things yeah um you're only putting 40 towards it a month yeah so I guess I could throw like a thousand dollars at it next paycheck or can you well I guess can you then afford to do things with the other money that I'm getting um I could probably start eating that that away what's the other money from uh just like the other things I said um whether it's acting gigs here and there and some content creation money nothing crazy but what are those bring in on average uh one month time months show fluctuates it's really very tough to say I guess in an ideal where I could say like maybe 500 bucks so do you have a savings account um I do not so you're not setting money aside for taxes you said I'm trying to but there's no money uh I guess what I've done in the past when I have extra money is I will send it to one of my parents and just be like hey hold on this for me and we've oh my gosh kept track through that yeah okay when your credit score is okay love to hear that this looks 47 I mean it's it's on the lower end of okay it's your card your card is weighing it down yeah credit card usage 93 percent okay total accounts because you just told me something that is kind of blowing my mind you might be on a mortgage with your parents and you are why why why why are you on this mortgage I don't know my parents are very good with money and they told me it'd be a good thing to do I think it helps with my credit yes yes it's having diversity to your credit and it's showing good but it's risky that it's on your credit who knows what's in their will who knows how this whole thing is set up actually I'm curious um so risky if anything bad were to happen to them I don't know what would be coming to you is do you have any other siblings that are on this as well yeah that's not good it would get very confusing if the worst were to happen it's kind of a risky situation who like what if one person wants to sell it what if the others don't like what are we doing here um I guess I hadn't I don't mean to laugh I just I hadn't considered my parents death as like a a thing for this I mean it's that it would absolutely suck I hope it doesn't obviously hope it doesn't happen but it's an expensive mortgage almost a half a million what is the what's the what's the monthly payment um the monthly payment I believe is somewhere in the three thousand so imagine for a second the horse were to happen three thousand dollars a month um you bring in two thousand five hundred dollars a month what are we doing you understand the risk I do I see that what do you mean they're good with money well what does that mean go into detail um I just believe my dad is very financially literate um demonstrations of how um I guess I'd say he does very well at his job he's taught me a little bit here and there about investing I'm really so you haven't invested a single thing uh no I I haven't I I really it like I don't know that's one of those things where I'm like I just I need to learn more about it and I'm not really sure what the best route to go about would be okay okay I know I I know I have a long way to go with all that stuff um so this is not it's not the highest risk thing in the world that you are on this but it is riskier than I would like because anything can happen and then that's just a bad situation then I put like it might pit sibling against sibling I don't know it might be worth at some point when interest rates are low you know they can refinance gotcha get you off the mortgage okay get your brother off the mortgage I would love for you to have um mortgage at some point that you are paying for your own house yeah especially with where you're at sacrificing low you're taking low income and so you're making well under the median income in Austin you're making thirty thousand dollars a year the median income I believe is 55 in Boston like you're not doing well income-wise for the city you're in specifically you are one of the 48.2 percent of Americans who makes thirty thousand dollars or less a year so you're in that lower half okay for individual incomes specifically no no yeah it's a little risky it'd be too risky for my blood it is but it is what it is what I was happy with there's nothing else that needs to be freaked out about this car that is struggling you own it there's no debt on it that's good what is the car uh 2005 Chrysler Pacifica yeah yeah yeah okay so you probably need a new car yeah we're uh actually looking into that soon what does that mean my parents were going to come down and visit and just talk out some possibilities with me but because you clearly could not buy one so are they gonna buy one for you it's yeah it's on the table it's just more so um I would prefer to either get this guy fixed the problem is it just it kind of keeps having issues so yeah it's not worth putting the money into it versus how long it'll actually go then and I'm kind of assuming that yeah probably not worth it well so I've got an electric scooter that I use uh very often um obviously there's times when I that's not going to get me where I go sometimes I borrow my brother's car um he's been pretty generous about me using that when he doesn't need it that's good yeah well we could get you to a place up this this is this is where I'm thrown off we get you to a place of great retirement we can get you to a place of who could even get you to a place of managing the company's money while we could get to a place where you're able to buy a car we could get to a place where we grow the business and you're able to bring home more we're gonna get to that because I don't think you you besides I I know you're willing to work hard for the business I am getting that vibe the other things that you might have to sacrifice in order to do to have a better retirement start investing now or save up and get a car in cash I don't think you're I don't think it's possible okay you agree or disagree with that statement um I guess I'm willing to learn I'm willing to realize there's better decisions that I can make okay um as far as totally just being like Hey listen I can't go out I have to do this this all in doesn't really seem like some for me I'd rather so you're not willing to sacrifice temporarily for another remainder of your life uh I guess I would say if it was like go the next two or three years like that then no that's not on the table for me I don't think that's necessary in your situation you don't have like crazy debts to pay off um I I'm all for you know Finding cheaper ways to have fun you know going to the park with my girlfriend that's fun you know um doing less expensive things I am pretty good about like when I go out to bars I don't spend a crazy amount of money um I've always been a person that you know will just not do that if that's not convenient for me at the time so I I definitely open to learning a little bit more here and there I just truly believe um enjoying life is more important than anything else and I know that's a naive way of looking at some of these things but no for to a certain extent I mean the time we're here is only the time right here you want to enjoy it it would be irresponsible for me on this side of the table in this kind of context of the show to be like oh that's all that matters the thing is having Financial Security and being able to retire instead of killing over on the Walmart floor in your 80s because you don't have any money yeah there's a part of enjoyment of life that comes with that for sure so it's being able to sacrifice at some point being able to take care take advantage of the best years of your life of compound growth so that later in life you're able to just live for sure I'm open to that man I would love to hear more about uh things that I could do with the amount of money that I'm making right now well that's the first step with the amount of money you're making right now not much that's the issue because I mean you you could go crazy you could go absolutely crazy in fact for the credit card I would recommend at least a month of you know of your rent your food but nothing else for a single month nothing else and uh what was the done on that car it was like a thousand two hundred uh yeah 14. okay it might take two months of this or a month and a half but every single penny under other than just what it takes for you to survive every single penny goes to pay it off that card so can you explain to me a little bit more about uh so if I get that credit card debt down to a certain number then the percentage goes down so but what I'm saying if it's at like 300 is that percentage of interest that I have to pay on top of it's still going to be at what was it 26 oh the percentage of income will still be ridiculously high so it looks like you on that card there's a variable interest rate and interest rates are only going up at this point uh with what the FED is doing to combat inflation so any balance on those is bad okay um and so I started the balance the worst that's for sure so when when I get it down to zero should I when I pay it you're saying just pay it immediately at the end of each month but I can let it so okay this is a situation the situation I love credit cards because I'm someone who can manage credit cards you have not demonstrated in any way that you can use credit cards and you also don't bring in that much money which and I think the credit card gives you a little extra extension thinking you're able to live a little more than you can I think that credit card needs to be chopped in half burned and closed after it is paid off that's gonna impact your card in a slightly negative way but that is not even close to as important as your just relative finances interesting okay I think in response to that I would say I definitely would consider myself able to use a credit card I haven't done demonstrated so I I have not really known these things and it's kind of I would say if if I had someone like you to kind of like walk me through and I probably could you know yeah now you know the interests and why it's so bad and how it just compounds against you you're losing 30 a month and you're only paying 40 so only ten dollars is really going towards it yeah I think I uh I think I could probably just talk to my dad and he could probably tell me a little bit about it that's one of those things I just haven't done there isn't there isn't anything more than I just said really as far as like uh do you have any specific questions well I guess I'm just saying like you're saying uh once I get to zero cut it in half I would for your situation because you have not demonstrated he if he's someone who worships the almighty credit score then he might be against it I love the credit score as well it helps me take advantage of cheap debt on good rental properties however the negatives to you having a credit card which has been demonstrated at this point fars outweighs any impact it would have on your credit okay and if you are able to become Financial discipline in the future and then get into that world again that's fine so I'm saying hypothetically I did show I did show that I knew what I was doing and I could and I got it down to zero what were my steps from there be then uh well first of all we're budgeting every you know your categories uh for example the most basic one you could do 50 30 20 50 on needs 30 on wants 20 on saving and investing okay the thirty percent of your wants maybe that goes on the credit card and your gas something like that that's a good way to start testing if you can do it maybe just put your gas on it for a few months you're paying that off every month you never hold a bounce you're saying okay but so uh like pay it at the end of the month I'm not I don't have to like put it on and then pay it immediately you don't I mean I'm one of those crazy people that pays my credit card every week because it just drives me mad but really you just have to pay it once per statement no just make sure it's you know paid off every time okay cool so if I were able to do that that would be a good idea sure but I'm just so far history has not shown yourself to demonstrate that and it would be irresponsible of me on the side of the table understandably I truly didn't even realize I mean I guess I kind of did it was more so I was just like I didn't really stop and think about the fact that the more money on there the worse I really I think somewhere along the line I had heard as long as you're paying your minimum it's not going to affect your credit score and I guess I was kind of like well no because you're over 30 utilization and anything over that dramatically hurts your credit so that's the other thing that someone recently told me because you don't want to spend 30 of your of what you're allowed to use your utilization yeah okay our special hold balances but you're going to pay it off every month yeah you should have it so now the next thing you need to have an emergency fund because you have no Baseline you're in a slightly privileged position where you do rent from the parents and you're actually on that mortgage which is a thing within itself but because of that you know you're in a slightly more okay position however you having an emergency fund would have taken care of this car situation it's true you would have been able to go get yourself a ten thousand dollar car if you had a 10 000 hour Merchants fund so in this situation I would extend the sacrifice for another six seven months save up ten thousand dollars as quick as you can by cutting back on everything once you have ten thousand dollars then I'm totally okay with just chilling on life for a bit but we categorize things we categorize our money I would still want 20 going to investing stuff some kind I'm cool with you taking the time of your life as the investment into this company that you're doing totally cool with that I still want at least 20 of your money going towards investing okay because you need to take care of future you and that's uh s p that's that one account I'm not going to give advice investing advice for legal reasons got in here but you can talk with a financial advisor for not too much especially for the return that you get from speaking to the financial advisor what I do is I put into like the S P 500 yes cool yeah and you can find some variety of index funds you can have Target retirement funds as well which are more aggressive up front and as you get closer to the the date that you selected in the fund gets more conservative or you can do things like mutual funds but usually if they have higher management fees as well okay variety of options financial advisor walk you through it but that is 20 of your post post tax yeah or even higher if you can but at least twenty percent and that's where you budget you set aside your fund money this is how much I can afford to spend on fun if I'm still hitting twenty percent on investing and then you just don't spend over that 15 doesn't mean you can't have fun you just have set aside what it is okay does that make sense yeah that does I think you should seriously consider sacrificing not having fun that costs money for the next half year or so just to pay off this credit card immediately and then save up ten thousand dollars for your emergency fund in fact you might have to save about twenty thousand dollars because ten thousand dollars might be going to get a car okay so it might be a year and a half is I guess yeah can you I don't even know how much like cars cost like ten thousand for like a reliable car reliable car absolutely what you do if you're getting in private sale especially private sale uh which is where you can sometimes find better deals instead of being swindled by a Salesman uh you take it you take it to a trusted mechanic and have them give the thumbs up on yeah you're getting a good deal on this car and yes it'll run for years as long as you take care of it cool okay that's a good way to do it you don't just want to take your car though because you can afford it yeah yeah it makes sense but I think that gets you into a good place and then you can actually Focus here the thing is that's interesting and once you have an emergency fund you don't have a credit card that you have to worry about paying off and that you are setting money aside for retirement you're actually able to focus more of your time and mental energy into scaling this business yeah which is the exciting part for sure yeah when you know you have something to fall back on like an emergency fund or a car breaks down you have the emergency fund and you have money set up for retirement if the business doesn't pan out you know that gives you such a great place to be able to just take this business to the next level and that's where I want you to be able to go but right now Uber and Lyman we're going crazy we have no Investments we have terrible credit card debt had terrible interest and no car and no emergency fund so not a great situation but a relatively easy turnaround if you're willing to sacrifice that sounds good to me yeah um this time I'm gonna have to take back and think about um and it sounds like something I'm capable of so gonna have to have a good conversation with myself for Ryan it certainly comes down just to the lack of Education in our school systems and even from people we know about personal finances and that's because the people who would teach us about personal finances in our family most likely don't know anything about personal finance is because we do not teach personal finances in this country so it really come it just stems from a place of ignorance it's just not a bad thing but now that information is being presented to them it's up to him to take everything to the next level with these candidates with no investing with a very low income from this area and a very expensive rent for the income a lot of other things Hammer Financial score oh but that's not crazy so hammer Financial score 4 out of ten check out all the fun things in the description like my Instagram and Twitter and don't forget to subscribe thanks

Channel: Caleb Hammer

Views: 370,753

Keywords: crypto, graham stephan, meet kevin, make money online, biaheza, shiba inu, how to make money, finance, financial education, inflation, personal finance, day trading, ryan pineda, compound interest, student loan forgiveness, mark tilbury, dave ramsey, the dave ramsey show, financial independence, budget, elena taber, ramsey, biggerpockets, the plain bagel, how to invest in real estate, budgeting, budget money debt cash, real estate investing, dave ramsey show, dave ramsey live

Id: wgbzgf_xA9g

Length: 43min 43sec (2623 seconds)

Published: Fri Feb 03 2023