7 Financial Rip-Offs To Avoid At All Costs!

seven financial ripoffs you need to know about its care it's Brian Preston the bloody guy did you did you just whisper into the microphone fresh haircut crew we both got fresh haircuts today we already is already the pre-show live show people were given BOE credit for the fresh haircut didn't notice these sideburns were also tight here's what you and I've had this conversation like we never really used to think about this on recording days but now that this is out on YouTube and kind of can live for weeks and months and years out there you can't go on with like a crazy haircut or some like bogus outfit or some crazy thing going on you have to be a little more like aware of that because once it's out there it's out there and it stays out there so it I think it matters now so uh yeah your haircut looks great I think that's great but we're not supposed to whisper into the nuts Burton it's just funny cuz I just can't you know when Reeves when she goes like edit the audio to make it all sound perfect she's like she'd do it like edit the whole thing and accept that one whispers she's gonna have like way amp up so let's get into what we're going to talk about we were really financial ripoffs big deal so much so that when we did the pre-show meeting two weeks I guess it was a week and a half ago and we came up with the idea and then I think it was you came our review was going back through and she is guys y'all did a financial rip off show in September of 2018 I was like oh no we probably have done is it the exact same things as we came up with this organically and we were worried that it was a lot of overlap and then a realist know there's four of the seven things we're completely brand-new I've decided that financial ripoffs we could pretty much do a show quarterly these things pop up like Wacom oh that's right I mean you really could do shows on how many financial ripoffs how many people are trying to get into your back pocket and how you need to protect yourself and in it the big part of what draws me on this is that I know when I get ripped off I feel like a chump mm-hmm I mean that really is the word that came to my mind is that I'm disappointed because every dollar needs to have a purpose needs to have a plan but we get ripped off that dollar that went and got scammed or ripped off never will reach its full potential so I'm gonna looked up what's the definition I went on Google and said what's the definition of chump okay so here's here's what o all-knowing Google tells us quote a foolish or easily deceived person nobody wants to nobody wants to fall in that category your army of dollar bills want to fall in that category either so let's kind of jump into these here's here's the seven number I want to get in these because I know I'm worried this show will run long so I'm trying to make sure that we're respectful of everybody's because I realize a lot of people don't know the difference between full shows highlight shows if you come here and you're watching these go man I cannot believe this is a 40-minute show we do highlight shows that's right you might like that better if you come here go keep losses only 7 minutes show we do full shows they go 45 to 50 minutes so hang in there we're Goldilocks we got something for everybody I'm trying to make it all all for all people number one the media guys okay media I've been on Twitter about this recently and I'm trying out it cuz I think Twitter has turned into the troll farm sure and I don't want to be a troll farm so you'll notice on Twitter we purposefully try to stay positive but when Yahoo Finance I think it might have been Fox News or CMB see because I get alerts from all of so I'm an equal-opportunity give me alerts and they all talk about stumble they always talk about you know market getting tumbled you knows all these adjectives it's almost like they pull out their ad-lib and figure out what add a little scare the heck out of everybody because they really are fear mongers if you think about what is the media these days they are fear mongers and a lot of you are probably thinking no the media and it doesn't have to be just financial media it could be your nightly news it could be your international news it's even turned into the morning shows that you're drinking your coffee supposed to be feeling really good about life they've even gotten where they're somewhat fearmongers and it's it's one of those things is that I realized a long time ago the purpose of the media and the financial media specifically is not to educate I think we all have this rosy feeling that the media is our friends are trying to help us but you find out that their real purpose is get your eyeballs and generate some revenue dare I say they care actually much more about the eyeballs and they do accurate reporting I mean how many times do we see things that come out and it turns out it has to be redacted because it was actually not even a real thing I've got one in a minute I'm gonna give you some stats on that it tells cuz I think it's turned into now it's all political right people when you hear fake news you think that's a political thing that is not the way this actually I'll show you I have data that tells you why things are falling apart for the media so but the first you need to know how big of a market this is that they're trying to sell advertising they're not trying to educate you TV ad spending is expected in 2019 to be 70 point eight billion dollars that was billion with a be correct I mean it look every one of these people that's because there's main advertisers you think about the the adult beverage industry think about auto manufacturers you think about oil and gas think about when you watch the nightly news who were the people that are advertising and that gives you a big big insight into who's trying to push products and other things on you and who has influence over the media well and also I've talked about this on the show in the shows in the past there is a premise in media that is true if it bleeds it leads I know leads it bleeds and it's because it's a public Tory because the media is not trying to get you to understand they're trying to almost get you so fearful to create anxiety that your solution is going to come from them and that's going to keep you if they can put enough cliffhangers in there they can put enough things in there to scare you will continue to tune in you will continue to come back you will continue to keep the process going and what i find so frustrating about this is it's really easy to think about in terms the nightly news cuz some time you're at least these days it seems like it's so it's just so sensationalized so big what we've actually been frustrated is even if even if you have respectable sources that you like to use whether it's blogs or podcast or articles the whole game of how you get your information in front of folks has changed yeah it's not just about saying hey here's what i'm going to talk about today click on this link you actually have to participate in that you have to like mold the way that you name your articles or do your headlines or write your tag lines so that you can actually get out in front of people we I hate it because so much sometimes people say that was a clickbait title guys you're right if we're not immune from this is in this crazy world that we're in right now if you don't come up with a snappy title that will get clicks the algorithm just doesn't pay you enough attention so it's one of those things where and I don't like that a you know they never by the way when you guys talk about clickbait you realize you're not talking about beau you're not talking about braun we don't come up with any titles we come up with the content we record the show we have a whole team that thing goes out there and says yeah this shows about ripoffs but Bryan will never get any viewers if we go with this idol he wrote here if we did the titles we will there be no we'd be screaming into an employ it really is because realize there's two purposes to the bleed it leads is that they're really they're trying to grab your attention but then they also need to create this sense of fear so that you will tune back for the solution and I always I want to give some examples of what I was talking about here and I all I had to do was think about what is my nightly news try to scare me with the two or three that came to mind was recently here in Nashville that for a whole week the local news media was telling you how dangerous elevators were and how to protect yourself right are you kidding me look how many people are really I mean they made you feel like every building you went into in Nashville was going to get trapped on an elevator and you're gonna have to do all kind of crazy things to protect yourself and I just think about you know how long I've been riding you know have you ever had like a like a really traumatic negative elevator experience no but if you were to see that article you would think oh man I hourly but it's my small space it's hot that's uncomfortable cos you're in there with strangers and it appeals to all the things that scare you today how dangerous is your tap water I mean how dirty our hotel rooms Oh buddy out there because realize we're in Nashville Tennessee but this doesn't matter when we lived in Atlanta we have clients and listeners out in Oregon they're like yeah my news media does that same headline you know why because they sell those packages they have a consultants that come around and try to scare heebie-jeebie packages to you so you just you get nervous about things other anxiety creating tricks that the news media is doing to you that that crawl that ticker that crawled out of their bottom that usually has very thought-provoking or scary head to try to keep you to stick around even when the weather's on now notice that a lot of them are running the crawl still and then the second thing you notice they take breaking news they just got a boom no it just slings on there and it's the same story they talked about ten minutes ago but they're trying to keep your attentions right you know that led to but here's some of the data I want to give you about the media so you know what's going on their revenue is getting crushed the New York Times for example 2013 this is an article and from 2013 on New York Times their ad revenue in 2006 was 1.27 billion okay the article like it says 2013 article the revenue in 2012 was seven hundred and eleven million dollars so from 2006 six years later we dropped from almost 1.3 billion almost in how much did half to seven hundred million and then I will tell you cuz that same ad where I gave you the stat on the previous page that the TV spending was at 70 point eight billion which was only it was a drop of 2.2% from 2018 in that same article print ad revenue was down in 2019 17.8% so I don't have context for how that relates to the 711 but it's just know that's hard times for the news media and that's led to several things that I want to just bring you it to aware make you aware of and then let's talk about what the money got--we is so you don't get ripped off and avoid this ripoff is there's what's called native ads okay these are at you native ads what's a native ad you hear that it's a by definition it's a paid ad that matches the look feel and function on the media format in which they appear unlike display ads or banner ads native ads don't really look like ads at all so you have no idea that's action advertisement it's something that's paid for placement it's made to look like a real news story a real piece of breaking information but it is the sky so well you have no idea that's what it is it's exactly right so it's really paid advertising because that's what they they have sponsored content that is now make it into the normal media and that's just scary and then though I like every time we do a 401 K presentation we always say be very careful of the of just listening to the media in general because they don't they don't have a crystal ball any better name else does do you have some examples to kind of show them on some of that here's what's so frustrating about we already said they care less about accuracy and more about eyeballs their alma also seems like there's no repercussion to them being wrong you don't get it sort of so we just thought let's go you know since we're a financial financial show let's go pull some financial headlines that we've seen in recent memories look at these all right so this Business Week article Minoans from the 70s that came out in the 70s saying the death of equities it seems to me like if I remember there was something in the 80s and 90s that went pretty well if there's a good doll market look at this if you want to talk about just well well it goes both sides the hottest markets so it's not only they don't just always try to scare you into selling they also they try to encourage you to buy even when it's probably not in your best interest and then the last I like this is because politics yep we assume you know they go both ways but look at this I thought this was interesting read both of those headlines yeah so this this is from November 14 2012 market sell-off after obama's reelection no accident recession coming it is a penny i don't know if you guys know this but 2013 was a pretty pretty popular I mean it was definitely a double-digit return year well they got that wrong so how about let's fast-forward to now October of 2016 economists a Trump win would take the market it would actually take the markets well I don't know if you've paid attention in the last few years markets have not exactly it's crazy they don't get it they don't get it right which is so fresh and it's not a Republican or Democrat statement it's just showing that it's both ways they were wrong with it so don't look don't fall under the fake news camp just know that there's some desperation with the news media so what's the money guy way and here's what we came up with is you got to educate yourself so you can tell that what is information and what is noise and unfortunately we're now in a verifiable or you trust situation just like you used to go grocery shopping now maybe youngsters don't have to do this but old guys like me when you used to think there's a difference between normal media and tabloid media okay and you still when you win on the grocery store and you went to the checkout line that's where tabloid media huh unfortunately normal media has kind of become more like tabloid media so you have to treat it accordingly just be very careful about where money's coming from and I think I think this is a really big scary one too that we have to be so careful these days because we are such a plugged in society into social media whether it be Facebook or Twitter or YouTube or fill in the blank just because you see an article pop-up or you see some information come across your feed does not mean that something that you should act on something you should take back something you should use to inform how you make financial decisions so just like you said you have to verify before you trust a source before you trust information and then follow the money oh what is the motivation what is the motivation for them doing okay look we are part of the media voice out there I mean we bloggers podcasters YouTube creators we all kind of fit into this new media but ask what is the motivation what's the money that is driving these guys I can tell you we're very transparent we have this thing we call the abundant psychic we give it away we want you to become so successful that when you get to the point of complexity and success that you need somebody to look over your shoulder you'll come to us that puts us on the same side of table of success I'm not so sure it always works that way with other financial media people on the area so let's move on to number two the second financial ripoff that you need to be aware of ripoff I know you know I know you're like don't do it did did any of us think it wasn't gonna happen chill salespeople are ripoffs and I come from a commission background because that's what everybody came from if you've been doing this game long enough yeah but I recognize really quick that if it's not cool when you're in an industry where you're nervous about everybody thinking you're trying to sell them something I just did not want to be in it I want to be a consultant I come from a public accounting background before I got into financial planning and I just did not like how a key it felt to be a financial salesperson exactly right but by the way they don't call themselves financial salespeople that's our work that's their call themselves financial advisor just like we're financial advisers that's right it's just one of those scary things so here's the thing it's so bad that they're not gonna call themselves financial salespeople but there also going to make their advice seem like it's more of a consulting gig today that's it right and and what what we think is so frustrating about that is that most often if they're a fine truly a financial salesperson they care more about their bottom line than your bottom line yeah it's all about selling and getting the Commission that's exactly right I mean if you I'm going to pick on one industry just because it drives me crazy whole life insurance a lot of the permanent insurance marketplace in general there could be a use for it but a lot of times the vast majority is straight up to sell products but whole life insurance is is on purpose complicated I mean it really is it could be much simpler than what it is but I think they feel like they have to spin your head because they more the complication the more you spin head you'll glaze over and you'll quit asking questions that's right an understanding and it's that you can also see in the pricing of the product you can buy the same insurance with term life insurance for five dollars for a 30 or 40 year old versus a hundred dollars if you're looking at the pricing because we've looked at that order say that again so to the same amount of benefit if you were to croak it would pay out whatever million you died within that 20-year period of term the terms provides it's five dollars versus a hundred dollars for the exact same insurance and it's not like it's insurance that is what twenty times better than the term insurance not at all and I even think it's so interesting when someone comes to us Brian and they say oh hey I have a thirty year term policy we we kind of understand what that means we don't to ask him to the question so I says oh I have permanent insurance we have to say oh is it whole life is it variable universal life is a universal life what are the riders what it's just like you said it's so complicated for the sake of being complicated they the perimeter laws ask the question hey why did you buy this what was the reasoning behind this more often than not we get oh well I just I've had this buddy from college and he told me that I should buy this and it made sense and may not have been the best thing for you to I'm not only ripped off I don't want to pick on all the financial because I know some of these financial salespeople listen the show and yeah I got look at the camera I know you want a way out and I just want to give you a word of caution because I talked to you guys you write us and I know we even hired some people who've worked on the Commission side of the business is that be very careful because I know a lot of you especially you start understanding you didn't know any better when you started selling and then as you get educated you understand financial products because there's a very an entire industry that instead of teaching you how to be a good financial planner within the first three to six months they will have you out there selling us products so you don't even know you might have been doing something completely different you know six months ago but as you start learning the industry just be careful burning your friends family relatives before you truly become an expert because that that's just dangerous I want you to look at me as mr. Miyagi I mean you come here when we hire new associates I just pictured Brian doing wax on wax off see I don't tell you things I'm gonna put in here because I know I need to get your honest reaction I am mr. Miyagi when we bring associates on here it found welts they do spend the first two or three years there waxing on waxing off I mean they're working on all these basics meanwhile over at Cobra Kai they're teaching you know leg sweeps they're teaching all the things that are inappropriate but yeah you get paid a lot because there's big commissions there's big payoffs but you're not doing it right and it's just that bothers me so we want to give you the money guy way when you're dealing with commissioned salespeople I think that's great so we even had just had a quit if you know if you're not if you're out there listening I Tunes iHeartRadio stitcher we do this thing alive on YouTube every other Tuesday and we have a live chat goin sterling asked a great question and I want to get this question out so it says well what about financial advisors provided free by your employer is that a ripoff well it kind of depends so now let's tell them the money go away of what the question you should ask if you're thinking about an advisor how to tell if an advisor really is in your best interest the first thing you need to ask any advisor and this has gotten this was all over the media about two years ago but now it's died down because I think the Commission got is pretty much one you need to find out ask anybody you're interviewing I don't care if it's your employer provided do you have a fiduciary legal obligation to me on the advice you're providing Brian what is a fiduciary obligation it means legally that I have to put your interest ahead of my own meaning you're putting the client's interests ahead of your own and if you don't you can be sued and have legal ramifications for it so not all financial advisors have to operate out of that standard right so some the advice they give can be incidental to the products they sell it's not to be in the best interest it just has to be suitable right there's a whole clause called a suitability clause where they can give you advice but the advice might be incidental to them selling you products it's just hidden you just don't know it so that's why you've got to get to the point and ask the question are you a fiduciary or are as your advice just kind of incidental to you selling me something look here's another question that I just think is great this idiom is show notes but I just want to hit this real quick it is okay to ask your financial advisor how do you get paid yeah if you're um how much will you make off of this if your employer is offering you a financial advisor for free you don't ask the question okay well why are you doing this and if the answer is oh we're an employee benefit the company pays us that's one thing if it's oh well we're gonna make it from the products the company pays us you may just want to ask few additional questions always always always follow the money based upon Serling's question you know I was on a school board for seven years and there was a lot of insurance companies that were trying to get into the school system because we had thousands of employees because it was a large school system and they would always be like we'll do this for you we'll offer you a free flexible spending account we'll offer you as long as our agents get to come in there and sit down with each one of your employees and talk about their insurance needs and they used to burn me up because yeah they were giving you a flexible spending account but then they were gonna sell whole life insurance to every one of your teachers or a 403b with a bunch of variable annuities just not good stuff so be very careful remember wax on wax off not like sweeps we saved the crane kicks for the experts when you actually become a client of a bound wealth so let's move on number three payday loans and rent to own so I think this one you could have done your ripoff there you go because he was a we actually sent intern Dan Bowie intern Dan is on vacation but before you went on vacation he had a well earned undercover task okay I feel like we're out of like don't don't you know submission impossible music or something because we really did send intern Dan now into the front lines to get us information because here's what I realized payday loans we all know it's a bad deal yeah you hear things you like payday I was like Bo I don't know really how payday loans work I don't know what they charge you know I can find order I mean this is kind of confessional in us because it's just it's not something that we've well we people we work with wealthy people we have resources I have never dealt with a payday loan because I don't think wealthy people struggle with payday loans so but that doesn't mean we don't need to cover and talk about it and then every day when I Drive to work we're in downtown Franklin Tennessee which is just south of Nashville we're one of the wealthiest communities in the country and I Drive right by a payday lender every single now I have to qualify that based upon undercut you know in turn Dan's research they're not payday lenders they offer flexible homes oh they are a flexible lending source flexible flexible lending source so so let me tell you what in turn Dan found out in his undercover investigation so he reached out to two local lenders because we told him to I'm gonna pushed him forward and made him do this the first one refused to give him any information I think he could sense now he did not call from our caller ID because I was afraid I was like they hung up on you and he's like yeah I was like did you call from our phone number do they see a bound wealth on the card is only because no I was smart enough I called from my own fund but they first one would not give him any information as he started asking questions that is a clue something's probably not right okay second one did give him some information not all of it but we got enough before they kind of clued in that Dan was kind of getting information right so here's what Daniel was able to find out this this is their quote usually because he asked what the fees were usually it only costs 77 cents per hundred dollars borrowed per day oh well 77 cents for a hundred dollars that doesn't sound so bad that sounds minuscule even fortunately we own a calculator because if you do 77 cents a day for the whole year that's a 281 percent interest rate 281 percent they lead with that that's the flexible loan that's not a payday payday loans are bad but flexible loans flexible much be better at two hundred eighty one percent per year only seventy seven cents per day on the hundred dollars that you borrow so and you can by the way the loans can be as little as $25 who is borrowing twenty five dollars up to four thousand these things are straight up a ripoff they are you are a loan shark at these places and I don't understand how I'm one of the wealthiest communities in the country we have one of these things I could go probably jog without bringing too much of a sweat and I could hit this place right here so they say that you can get the money the same day that's what they tout now you don't need a credit check or anything just proof of some sort of income and then they run an algorithm to determine how much you can pay back the fact that it's that easy I should tell you something's not right about this something just doesn't smell quite so you must be thinking what if they have one of these in this wealthy community if you're heavily I would just went to Dollywood this past weekend that's a whole nother story it's all a bunch of paid its same company that's here I saw on my way to Dollywood and you say well somebody's got to be stopping these things so here's what the research shows on some payday loan stats or flexible loans they okay is in the past two years eleven percent of Americans have taken out a loan with one of these organizations that's one in ten bo hold on then what so here's what I said you know our team has grown here we're now in the double digits on our team here at bound like they're you know statistically if you would around one person in the dirty no way anybody I would be so disappointed if I found out anybody from the abound well team ever had it like I said you stole but just think about that one in ten that that is an alarming statistic to me but I bet it's not one out of ten of money got listeners I'm willing to bet that that's not the case before I give you the money got way on how to avoid these things let's talk about another sibling to payday or flexible loans is rent owned these things are everywhere too by the way cause I think there's there's industries that you know we're in your neighborhood are you doing like there's no way that's near me but thing you do a Google searching just type in rent down around me you like a lot of these places within you know five miles how is that possible rent to own how does it work what is that what is rent to own me well I mean it's kind of what there is pretty self you know these are the rental places instead of you owning your already horrible purchase of furniture and electronics because we all have boxes of electronics that we just ought to throw away because things get obsolete you know obsolescence happen so quickly instead of owning those things in losing rapidly you could rid them so you could pay for them from for many times over many months on giving them we actually interned and did a great slot playstation4 okay now first of all once you get busy look I love video games so don't don't read too much into this but as soon as I had kids I kind of quit being able to play video games busy with life and get busy being productive so a you know I found out that a PlayStation 4 what is it cost per place that's for if you wanted to buy it outright today you could go buy it for 360 899 368 dollars but if you want the convenience of turning this time suck into a horrible ripoff decision just go rent it at a place we look this up we had intern day and also do some undercover research on this and what is a PlayStation 4 if you want to rent on it call it here's the pitch that would give you right instead of owning this thing for 370 because who wants to spend 370 if all you want to spin is a hundred bucks you can have this PlayStation today then all you have to do is pay me 100 bucks every month for the next 12 months and you can rent to own a ps4 for $1,199 so you're playing over three times what it costs simply to pay one third of it at the time of purchase you can do this it's not only with Playstations it's all kind of electronic so that you make bad decisions on like a galaxy 8 notebook is $3,200 $3,100 that's like three times what that costs normal right all these things are horrible decisions so let's talk about what the money got--we is how do you obviously guys avoid payday loans avoid rent-to-own programs this is predatory programs and lending this is the lois of love and it preys on people who have nowhere else to turn right so i if you've had to use this or in that situation this is not so much an indictment on you is the fact that there are predatory folks out there that are willing to take advantage of you so we want to talk about how can you prepare yourself to not be in the situation where your last resort really is your last resort so we we kind of created a real quick checklist okay now bow put one on here that thought was kind of mean it's the Vice the first one on here it's in all caps because that's his input was have an adequate emergency fund the the best way to avoid having financial emergencies is to have an emergency fund that's that's a duh so you know you if you don't want to do payday loans just have an emergency reserves but we're go to is you probably whoever you owe the money if you're in such dire straits that you're in a bad situation that you think you might need to do a payday loan or flex loan whatever they call on these things it might make sense like if it's a credit card coming call them if it's the IRS you can set up it's not ideal but you can usually ask for a payment plan from whoever you owe the money to and usually the payment plan is going to be better than the flex right because what happens is if you're living paycheck to paycheck where you need these things you go get behind because you're thinking okay when I get my next paycheck I'll get caught up but you never get caught up you're not starting you 1% interest it's just bad so then go to if you can't get a payment plan go to a credit union local credit unions sometimes have even more flexibility than your normal brick-and-mortar banks and we we work with a number of credit unions they really are kind of your they've taken the place of a lot of neighborhood banks as your credit union so go check that out peer-to-peer lending look it's going to be higher interest rates if you think about like Lending Club some of there's another one I can I'm blanking on the name of a peer-to-peer lending is is a big deal it's that the rates aren't great but it's going to be much better than like two hundred eighty one percent I hate to say because if you if you're one of these people that gets asked you need to treat this as a gift not alone but you could ask family members strive you're in that much of a dire situation help from family but like I said if you're the one being asked treat it like a gift if you're going to give the money because lending money to relatives is usually not a great proposition you can ask for an advance from your employer if I had if I found out one of my employees was in this much of a dire situation that they're willing to go do a $25 to $4,000 loan and pay two hundred eighty one percent I would gladly help them out so go to you and I Betty a lot of your employees to do the same thing then you know you're in a bad situation if the credit card is actually a better choice than going to a payday loan we talked about it the average interest rate on credit cards right now is seventeen point seven six percent and as bad as that is it's better than two hundred eighty one percent and then last credit counseling cuz guys you've got to get yourself for you never get in this situation again so go educate yourself get yourself in a better place do not do payday loans flex loans right or rent owned places they are a disaster nothing good it is truly ripoff now this next one is one I think that when you hear this I think your ears are gonna perk up you say well I'd have to worry about a lot of those other ones but this one whoa I have some interaction with this one and but we have a system so make sure you're doing it right to source we have a system number for traditional brick-and-mortar banks oh so these are the big names you know these are the ones you see on the corner when you're driving around town well I and I'm trying to be nice here because I see the email addresses of some of our our audience we got some we got some employer you know some listeners and it worked for some of these brick-and-mortar banks but hear me out on this because this is the thing traditional banks typically pay less interest and charge higher fees that's the it is what it is and look I'm kidding I have a count with one of these I've had an account with one of these since I was like 15 16 years old maybe even younger when I started like a savings account and my parents got a toaster oven or something but it's well these things but listen this national average on a savings account from your traditional brick and mortar but Bank is point one percent the point one percent savings account is a measly 0.1% vs. all day long you can make 2% on your cash fdic-insured money that that's disgustingly a huge spread there guys you know when I tell this when we anytime we have a prospect or anybody reach out and say where are you keeping your cash reserves if I find out you're at a traditional brick-and-mortar I'm like they're like yeah but it's just cash this is not a big deal I'm like I guarantee you there's probably enough interest that you could earn that you could take your whole family out for dinner we've seen somewhere there's enough interest that could be earned they could go on vacation this would pay for a weekend trip for you and your family with less than 20 minutes of your time to open an account link it up and do it it's just not hard it's frankly it's kind of lazy and then think about this fees because they not only getting you on the interest they also getting you on some of the costs the average checking account is charging around ninety seven point eight per per year now Brian you and I've done this math all the time right that says that the average is ninety seven dollars and 80 cents I know two dudes that do not get charged any fees in their checking account because they monitor it religiously and they don't have a go so that means if you take those two guys that I know out of the equation we're skewing that number down the average has got to be higher right I mean there are folks out there that are running up fees it just doesn't make sense to throw that money away if you want it apart with a hundred dollars per year that you just don't want symud us we're happy to take it that's that point came from NerdWallet there was also I had another one that came from back and we've done this on banks before 2017 I had a data point that the average Americans spent $329 on bank fees so that means like you said we're not using a we're not spending that money on those fees that means somebody's spending six seven eight hundred dollars a year on bank fees to get that average to 329 there's just no reason to be paying any money any type of fees so let's talk about the money guy way and don't hear us wrong we both just admitted we both have a relationship with a brick-and-mortar bank here in town but we do it the money go away which we think is the right way so here's what cuz I want you have convenience cuz a lot of you guys go you're sitting you're going I hear you I want to make more money but I like the convenience of knowing if I need to go deposit a check or if I need access to cash I just can go right down the street I know that you're saying that so here's here's the money got way is set up your win-win Bank chain so when I talk about a win-win Bank chain did you the win-win bank chain well I'm trying to be snappy these days this is all Tynan deals clickbait tragedies we gotta trade that win-win bank chain that's genius yes well you didn't he didn't rebe you notice he didn't say on the show no prep right waited he saved that till we were on air so I'll take a visual of a chain win-win Bank put the win in the air so this is what you can do if you want to do the win-win Bank chain is that you can't it's ok if you want to go with a local No Fee thank you cam yeah that's gonna be kind of your housing your convenience you're not gonna make a lot of money but it's not gonna cost you a lot of money but it's going and we have this we have a local bank right that we well local here in Texas but um that it is a more of a community type bank they were merged up that's the time you join a local bank they usually get merged up in two years no it's more of a regional but we have a local No Fee bank account then you connect that to your online high-yield FDIC insured bank account and when you connect that online via the interwebs you can move money back and forth so it's not like that money's out there in the ethos you can't get to you can literally most of will even move it same day depending on what time you put that one two three days is typical but it's not any trouble whatsoever to transfer money back and forth you're going to still get all the great FDIC insurance so there's you don't have to worry are these banks going under you're going to be okay and then here's the other thing I always tell people because this is a big fee protector make sure whatever bank you work with has some type of reimbursement on ATMs because one of it because ATMs have gotten to the point it's not like a dollar it's not a dollar fifty it's like 350 on this side it might be $2 on this side you might have an ATM fee that's $6 if your bank reimburses you every month for those ATM charges you go save a lot of money and that probably makes up the majority of that $329 and fees that banks give very first a very first banking relationship ahead I picked my bank based on how many of them were around the town that I lived in so that I could get to the ATMs you know that used to be a thing especially in college you want to be able to go the ATM and get money out if you need it too well now it's so much better if you just have a Bank that says hey doesn't matter what ATM you go to we gotcha yeah we'll refund if you don't want to buy crazy reindeer games with where banks are in relationship to you you know you have access to all ATMs because you would get reimbursement makes your life so much easier exactly right definitely money guys set up your whim win bank chain you're gonna do great got it trademarked that read that's a good one it sounds like chitty-chitty-bang-bang you know cuz you know the whole will move on no well he lost me there that's a freebie did you follow that one no a little bit tune it Disney nerd there alright number five number five credit cards so this one what does it run it's a ripoff could be a ripoff it could be a because we've done and we've done a lot of shows recently on debt talking about we've we have we have let you guys know what we think about credit cards we've told you that they may not be the most advantageous thing if if you don't use them correctly remember we've said this it's almost like it's a broken record in the fact that there is no such thing as credit card debt you can have credit card use but no credit card debt because credit card debt ripoff that's exactly right it up off just know it that's what it's gonna do for you but here's why I do want cuz a lot of people let me refresh your memory on why it's a ripoff average interest interest rate right now seventeen point seven six percent for people who actually carry a credit card balance the average is around sixteen thousand eight hundred eighty-three so it's right there right under seventeen thousand I know the national average is much lower but there's a lot of people that are paying credit card interest that's right so you need to be in that category so you're not one of these people is has seventeen thousand dollars worth of credit card debt and they're rip off because the interest is just not worth what you're getting 17.7 six percent you're not gonna make that on your investments so if you're not gonna make that on your investments you don't need to be paying somebody it's not deductible so you can't even say oh there's some tax benefit to it you've turned compounding interest on its ear it's actually working against you instead of working for you so it's just not making sense now credit card use I will tell you I think that credit card uses a lot of conveniences think about they have cashback have some type of rewards the extended warranties huge um I went as I told you guys I went to Dollywood just this past weekend I know Mickey Mouse probably thinks I'm cheating on him a little bit but yeah I do love me some Dolly Parton too we went to the water park and even though I had a locker for the majority of our you know possessions and belongings and things and towels and so forth there were a few things that we just left in the chair guess what one of them was why I went in the water credit cards you know what didn't care you steal my credit cards and I'm not gonna be paying the bill on it somebody else's I mean it's one of those things you're going to be protected he said I didn't care somebody stole my credit card it was okay nobody did by the way great group of people a Dollywood but it is one of those things I just wasn't worried but sometimes you do go on shady websites like a good deal if you go do a price grabber and you're trying to find the best price or even frugal or Google you know they're shopping portals you sometimes you'll back up buy from this website and you know you don't want to use your ATM card yeah so it's better to use a credit card but now let's give a nod right so we said so credit card debt is the ripoff right that's the real ripoff we just gave a bunch of positive uses for craigers however however your throw the whole water on credit cards I'm just gonna say there is some anecdotal evidence out there that would suggest for certain folks they might tend to spend more if they are spinning with a credit card than if they're spending with cash you note actively every time you swipe it it doesn't disintegrate with cash you actually feel it leaving your hands so yes a credit card could be a ripoff for you if it entices you to spend more than you might otherwise in turn Dan wouldn't pull two data points it's a mixed bag in my book I'm gonna give them to you because I want you guys know we don't just hide stuff from you we'll be transparent he found a stat that in 2018 there was a research study that people were willing to spend 83 percent more on sporting tickets when they paid with a credit card so you know we're right here in the home of the Nashville Predators Gope Reds if we were to go to a Predators game we would spend more on those tickets if we were gonna swipe them if we were gonna pay can I be honest that wasn't that data point seems a little sketchy for me because the only other way you can buy in cash is the approach the guy who's walking around some shady guy on a corner that you're approaching so darn right probably everybody who's worried about theirs you know you doing that one is going to pay with a credit card but if you're not worried about your safety and going to the shady guy on the corner by all means you're probably getting a better deal so we'll just say eighty-three percent more good point in turn Dan but you know and here's another one this one this one was another like half washed data point that I was just like good point but I think it means that this is not a good for cash because they found out that tips if you're paying with a credit card you likely tip around 17% okay cash tippers only tip around 15% so once again it's a savings but but you come from a servers background yeah this one I thought so what I thought was so funny is Daniel try to say yeah look man you know the folks who pay to a credit card they spend more money they just spend more on the tip and I was reading that like ran her credit card user just more generous because look I worked in the fast not fast food in the viewer service industry all through college so I understand the grind of what it is to wait on tables here's the deal if someone's bringing your food they're taking care of it you know in my opinion my humble opinion this is not prescriptive this is not going to show up an order of operations but when you go out to eat you should tip 20% now if it's bad service okay tip 18 but but I'm just saying that's the you know what I mean that's sort of my take on it if someone delivers an exceptional service whether you're paying cash or credit card you should tip them well cuz you know I used to live in that used to be how I not how I fed my kids I don't have any kids about then we used to be now I fed myself that's how I paid for Taco Bell back then so 15 percent somebody tipped you 15 percent was that it was that a good two now here's the here's the truth of the matter 15 percent you're probably still happy with you're always open for twenty percent so you're saying the majority of people when you were a server at a national retail I mean it was a chain where I've eaten at this this was my date night location college I know where they have some baby back baby back you know is that okay you think about this chain that beau used to be a server at I mean what was the average to you know I think it probably was somewhere between ten to fifteen percent okay which I which i think is which i think is wild because i would yeah probably ten to fifteen percent look tip 20 percent that's my that's my thing so let's talk about the money got away you know where we fall on this I've said it before we didn't pull up the goofy slide again although one of us did a lot of wanted credit card debt is supposed to be like unicorns and dragons is something you read about here about it's not something you experience for yourselves right remember that it is great if you want to set up money guy way as if there's things that you're gonna pay naturally think about your utility bills think about insurance premiums things that it there's no play on behavior of it's changing the price go get the rewards on this stuff just make sure you're paying it off every month I think it's perfectly fine to set up automatic payments on things like that it is a dangerous tool if you treat it like that treat it like a knife a chainsaw have used so many different analogies just know that this is a tool that if you're not respecting it you're probably not using it appropriately and then bow you put you put this last one on yeah here's the thing I feel like I have to do this new disclaimer I'm giving myself an asterisks every time we talk about credit cards used credit cards whatever yes personal finance is 80% behavioral so if you're someone who can't use it well can't use it responsibly don't use it at all but 20% of personal finance is mathematics and if you are behaviorally sound and you care about the mathematics credit cards when used correctly can be an asset to your financial circumstance yeah and I think I think the audience of the money got show we know that we are dealing with that twenty percent that aren't blowing it up I mean millionaires don't struggle with credit card debt if you're if you're struggling with credit card debt you probably need to go work on some basics this is just is what it is but if you if you know that you can handle the discipline you you've got you're paying yourself first your your are type of folks I don't mean to go on a sidebar but this wrote a comment came in this is from D vortex said how on earth were you budgeting $50 takeout when you first Wed when you tip twenty we did the show when I first got married and my eating out budget for me and my wife was fifty bucks I just got called out hard core right there it's an old-school call out I didn't take her to really nice places that was kind of my answer to that true number six extended warranties no yeah that's a Ripa cuz you just sell with credit cards right the sender warranty kind of came in on the credit is a common trend here there's some of our other themes salespeople are usually associated with extended warranties because they are highly profitable forty billion dollar business of selling extended warranties and guess what a third of you out there listening have bought some type of extended warranty typically on appliances I see you're getting sidetracked with the comments anybody throw anything right on this is what I thought was so interesting you said a third have bought it on appliances you know I would not have thought that home appliances wasn't think I would not think that's where most people buy extended warranties well the research shows that and this is Consumer Reports even though I got to tell you I still get my Consumer Reports magazine another trash session on Tesla in the most recent issue if you read this thing I'm like nobody at Consumer Reports owns a Tesla it's just obvious because they're they're rating I'm so excited all the Consumer Reports listeners who own Tesla's that are gonna but Consumer Reports they did come out and they shared about the appliances usually the repairs on appliances are much smaller mean appliance repair might for a part be 120 bucks 150 bucks you're gonna finally the extended warranty really isn't saving you any money so be very aware of that and that's why it's a ripoff math that we saw was for most appliance extended warranties they would have to come out for two to three service calls before it actually made up for the cost of the extended war and things are just too cheap usually it's just disposable after a while so let's talk about money got way know what a ripoff is and what it's worth the two big things I want you to take away from this section on extended warranties is smart phone extended warranties and yes yeah probably worth it I mean think about I can tell you my own spouse is cracked multiple I have torn up one Apple watch that fortunately yeah I mean this is the broom this is the model for I think right yeah yeah a week after I had this phone nobody at my house is taking credit for it but the back was completely cracked and I know I think I know what happened is because I know where its phone charm i watch charges at night I think somebody might have accidentally knocked it off from where its charges I got there real quick and put it back up there and acted like nothing happened but nobody is officially taking credit at my house but if I did not have the Apple Care 1 P on this Dylan ID to buy a whole new watch is much easier so things like that cuz think about we're walking around with our phones were in all kind of crazy places poq arias things where we're holding our phone over ledges and other things get the warranty on that it's probably worth while um do your research also vehicles extended warranty on vehicles here's the thing I think that we had this entire industry is now set up to where we can very easily through the internet figure out what a car costs what the mark-up is what options cost you do all your homework on that and then you get to the last step of the transaction which is paying for it and guess what they roll out that finance guy and he's gonna say guess what I got some options for you you want to protect this thing you've done such a great job of negotiating getting a good deal this isn't a roll out they got warranties on your wills they got warranties on the you know do you want bumper to bumper protection I mean you need to be prepared that somebody's going to pitch you on this because they might all that hard work you did on negotiating one heck of a deal might be lost on that last step when you met help them make all that money back on the extended warranty so here's my advice for you before you go pick up the car because you might have already negotiated I would advise you to already have the car negotiated you need to know before you go in are you buying an extended warranty are you not buying extended warranty cuz it's a mixed bag on whether you should buy it on a vehicle if you're willing people drives a car for 10 years but here's what most people don't realize extended warranties I like them to be from the manufacturer which is getting to be a rare and rare event but the second thing is is that I remember what now maybe this has changed but I know when I bought the car previously the Audi my wife had I mean the the Acura she had and MDX we bought that brand-new drove it for a decade we found out that you could actually buy Acura or Honda warranties directly from the manufacturer from other dealerships and still be protected and there was a dealership up in the Northeast that was making an entire market of selling these things at dirt bottom prices so I was I already knew what the warranty was gonna cost and I was able to usually have a few day period to go by the warranty you don't divide I think you might even get a thousand miles to buy your warrant yeah they go do the research on that but it's one of those things know what you're going to pay no do your research just as like you do you find a deal on the buying of the vehicle do make sure you get a deal on the warranty if you want to do that so the big thing I'm here for you if you are thinking about buying an extended warranty on an automobile it's not a solid yes or solid no but know that before you get it was definitely more to the no I will tell you I think because cars are so dependable these days but if you're wanting people that worries about the cost of the repairs but I do think extended warranties ripoff but just know where you fall on it so you don't get ripped off even more than you have to love it last one number seven student loans okay now Brian this this can't be a ripoff right because you're investing yourself it's good vesting in yourself you were trying to further your own future potential student loans surely can't be a ripoff and not all student loans are ripoff so I mean I will say that but you just need to go into it and think about and this is the sad part we think about education it's in this it's in the fabric of society that education is one of those things like we said improving ourselves making things better but there's also you have to start thinking about unfortunately student loans like you would we walked on a car dealerships right you start looking around it's that so many of my when we did the Dave Ramsey show so many people in the comments say you didn't talk about gizelle focus you know why we talk about gizelle focus cuz we're lions Bo you know I have had that gazelle type focus when you you're the one ripping apart the gazelles but I will give them a shout out gizelle focus is we walk on a car dealership cuz you're looking all around you like assuming everybody's coming to take your money it's kind of gone that to be that way with student loan you have to do it in the fact that if you don't it's not just the way the institution it's the major it's there's so many things that go into it that you've got to be so careful you'll end up underwater that's exactly right so and we put in it we wanted to put in a whole nother sidebar on here because it's so deaf ripoff I mean I ought to give it a little more than that but corporate sponsored education that's it yep that's a really big one these are the colleges that are for-profit private for-profit colleges we say that for for-profit these little ones you see the ads usually at night or even during the day you know because they know if you're sitting at home during the day or late at night you probably not working yet enough to go to work the next morning so the perfect time to try to sell you on strengthen so these are the schools that are online and listen this is how bad they are twenty two point seven percent of students for at for-profit colleges default on their loans within three years of entering the repayment period that's compared to the national average is seven and a half percent for not nonprofit colleges and 11 percent for college you know for public colleges so 20s almost twenty three percent versus seven and a half and eleven so it's two to three times worse divan bond way you're talking about public colleges or the not for not for profit colleges and then the graduation rate is also abysmal fifty four percent of students seeking bachelor's degrees in 63 percent seeking associate degrees let the school with no degree guys that's greater than half that is not good so half of the folks who choose to pursue a for-profit university end up not actually graduating and then if they do graduate roughly 1/4 to a fifth of them default on their loans inside of the first three years it's just hold so here's here's the money got way as a generic guideline you should you know don't take more student loan debt than you plan on making your first year out of college research your degree if your degree is in basket weaving and I had to make you know I had to go full pull one out of the old historic you know memory banks of what's a major you can make fun of is basket weaving you don't probably don't need to go to a private school right you probably don't need to go take out a ton of student loan for your money might be surd doing something much better but there's lots of people I do think it's it's an epidemic we have right now where institutions are willing to let 17 18 19 year-olds build up six figures worth of debt it's just that's wrong I mean this is stuff that they'll never be able to get out from underneath so just realize student loans ripoff so I think what's really interesting is that all these you just you said this Bron we did a show back in September of 2018 talking about financial ripoffs a lot of these aren't like brand new things would have come up but all these are different than the ones that were on our previous are different than the others show there are constantly people out there trying to get in your back pocket take advantage of you and by listening to shows like this educating and forming yourself you set yourself up to not be taken advantage of you set yourself up to be the general for the army of dollar bills that your army deserves so here's the ask that we have for you guys we're going to constantly keep loading you up remember we have this whole thing about abundance cycle our motivation is for you to be successful get to that next level so when you reach that level of success that you want to you know complexity you just don't have time in the day that you want somebody look over your shoulder and give you advice we hope you'll think of abound wealth but we there's another step in the process I want you to go to our website give us our email give us your email address right there on money guy comm because that's the place where we'll send you all type of resources advice and other things it's going to help you out in your path toward success so go give us that email address at zip code so when your neck of the woods also maybe we can drop by and do it you know because we do plan on doing some more location type things in the future along that's an exciting easter egg you just dropped we cannot come see you unless we know where you are so go to the website give us your email address give us your zip code let us know where you are and we will we got some exciting stuff coming got close we're close to crossing over 33 guys if you're watching this out on youtube or if you're listening on iHeartRadio stitch or iTunes you have not gone out to subscribe on YouTube click below subscribe that is a real-time counter behind us click on the what do you say ring the bell remember also you notifications every time we'll have new content out there because y'all remember last show we did well that knows is we were not even at 32,000 last show now we're crossing 33 I mean we're cranking through this thing so it's awesome check this out Maryland of Monroe which by the way just a fantastic name on YouTube I've only been your email list for about a week but I've already gotten some great tips look at that out here testimony ring the bell ring the bell awesome guys thanks so much I'm your host Brian Preston mr. beau handsome keep the questions coming also for the ask the money guys series and then make sure you give us that email address money guy comm we'll talk to you soon

Channel: The Money Guy Show

Views: 49,486

Rating: 4.8127856 out of 5

Keywords: money guy show, debt, budget, cash, real estate, insurance, how to make money, save, credit card, compound interest, buying house, buy stock, success, personal finance, 7 Financial Rip-Offs To Avoid At All Costs!, how to win with money, money, financial ripoffs, how to be smart with your money

Id: wBANsJuUJps

Length: 58min 20sec (3500 seconds)

Published: Fri Aug 09 2019