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

Episode Date: June 19, 2023

Check out these fun things: Patreon: ⁠https://www.patreon.com/calebhammer⁠  My socials: ⁠https://linktr.ee/calebhammer⁠  Do you want to be in a Financial Audit and you're in the Austin area? Email [e-mail] Sponsorship and business inquiries: [e-mail]  _______________________  Timestamps: 00:00 His "business" 02:30 Owning just a tiny % 03:50 Are you even making money?!?! 05:10 Does this business make money? 07:30 How are you even surviving?! 08:36 Betting everything on his business 10:10 Is there a plan?? 11:10 Throwing away your retirement!!! p1 13:07 Don't compare yourself to others!!!! 14:22 Throwing away your retirement!!! p2 15:30 What are you guys even doing?! 19:37 YOU HAVE NO MONEY!!!!!!!!!!!!!! 23:05 STUPID CREDIT CARD DEBT 25:50 YOU CANNOT AFFORD FOOD!!!!! 27:14 Credit score 27:45 On a MORTAGE with your FAMILY?! 31:00 His car is ruined and needs a new one... 32:10 It's time to SACRIFICE!! 36:00 The ignorance of personal finances 39:13 Clean this up... 43:03 Hammer Financial Score --- Support this podcast: https://podcasters.spotify.com/pod/show/calebhammer/support Learn more about your ad choices. Visit podcastchoices.com/adchoices Learn more about your ad choices. Visit megaphone.fm/adchoices

My name is Ryan O'Malley. I am 24 years old. I live in Austin, Texas, and this is Financial Audit. What do you do for a living in Austin, Texas? So I own and operate a video production and marketing company called Q6 Media. Oh, okay. So you own it. How long have you been doing that? Probably about 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 did you guys choose here? Why? 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 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 some equity in the company over Christmas because he's been so good for us. And so now it's a three-year. best. Okay. And how's the division of ownership? Jake has 20 or 80% I have 20% and our editor Ingram has 5% now. 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 and college shooting people that were coming and 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 5% equity in the company just because I had kind of become good friends with them. And it was clear that I was going to stick around. And so Jake had, who 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. 5%, 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 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. We've slowly fallen more into roles. It used to be a little bit of everything,

but now I'm calling myself the chief operating officer because I'm taking care of most of the... You're calling yourself, 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, Pouch Six Studios. 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 some of the things that your company does? We do, we specialize in video production. And so that can be 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? As far as like total revenue or as far as clients. No, just like different gigs. 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, 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 or are you

getting distributions on your ownership? We just pay out whatever we think we, it's 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? Probably average.

I probably pay myself around $2,500 a month. Okay. And Austin, that's, okay. Yeah. Surviving. but doing fine. Do you have another job? Or is this at?

I'd make some other money doing content creation. I have TikTok and I make some off of Instagram as well. And then... Well, you can't make much off of a TikTok. TikTok pays crap. No, I know. Nothing crazy. It's usually...

That's kind of whenever I have like a viral video pop off. I'll get like a good thousand here and there from that. And I've done a couple like brand deals, which... Yeah, that's where it is. That's where the... Okay, the lucre of 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 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 materialistic. And so we've never really had a problem with what we pay out. But you guys have expenses on a monthly basis. If you average it out. Probably, does that, would you include what we're paying ourselves? or no?

Before ownership pays themselves. So you can include you know, paying your editor. Yeah. I want to say probably like 6K.

Okay. Five to 10K depending on the month, somewhere around there. Okay. So you guys are really only having a profit of anywhere from 5 to 15,000 hours a month

depending? Somewhere in there. Yeah, we've had better months where we've gotten big gigs. Oh, for sure. Like we did. But average you now, because you probably have smaller months.

Yeah, probably around there. Not much. Okay. Yeah. So is the money you just told me also including your rent? As far as the $2,500 that I'm paying up. Space, right? Oh, yeah, that includes the expenses.

That does. What's the rent of this space? I want to say it's like $1,800. What's the square footage? I don't even know that. It's a... Impaired to my condo. I'd say it's about two.

of this room. Oh, two of this room. Okay. So, yeah. And it's 600? It's in a, a co-working space,

and we just have a private office upstairs. Oh. But we have our own private office. We love that. Yeah, I mean, free snacks. We love the people there. It's like a weekwork.

It's similar. It's called the Cathedral, ATX. It's over an East 16th, and 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.

But it's not like a film studio, like a soundstage and... No, no. Okay. Okay. That's making more sense. I've been looking at spaces and I can not find anything even close to that. Oh, well, so for... Wait, what do you mean film studio? As in like somewhere you can film? Oh, so that's the other thing.

They have that over the podcast and photo video studio. That's Pouch Six studios. That's the one that's. 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 month of basis. This is Euphoria.

Calvin Klein, the new elixir collection featuring three perfume intense scents inspired by a unique orchid accord paired with vanilla, each with its own distinct attitude, each with its own universe, bold elixir, sensual, woody, addictive, magnetic elixir, sweet and romantic like a lingering touch, solar elixir,

a radiant expression of joy, ultra-concentrated for amplified impact and lasting power. Find your euphoria. Discover the euphoria elixir collection by Calvin Klein. More. Yeah, downtown Austin. Oh, okay. Well, yeah, that's an expensive way to do it.

So $2,500 a month, so did you bring it on an average? Now, it's not that much. What are you setting aside for taxes? Because this is all just distributions from the company. Yeah, I try to. Try to. Yes. I've had some tight months here and there, but whenever I have...

What is your rent? My rent is I'm paying... It's $1,000 plus utilities, which usually comes around to like $11.50, something like that. Okay, so 46% of your pre-tax. Pre-tax, not even your post-tax, is you have to set money aside. So more than half of the actual money that you have access to goes to just paying for a roof over your head. Yes, sir. Yeah, 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?

Because I'm an entrepreneur, and I don't have a problem with 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 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, fun with friends in the weekend. I'm not too worried about it. That's more important than your financial future? 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 more possibilities are open to me in my future. 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. So lots of maybes that come with hustle. Yeah. You can say that. 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 little bit of a better point to do is, you know, have those. 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 this studio, and I believe that will help me on my 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 industry and find better opportunities. And then as far as the business side of things goes, every month we have, you know, new people and found a little bit better side of success on the business side. And so those are just small step and stuff.

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 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 what scenario. With the age you are now versus retirement age, $1 right there, put into the S&P 500, average 10% a year into retirement 30 years, taking advantage of compound growth as and it continues to grow on all the growth that has taken place in the year's period, previous.

Does that make sense so far? Sorry, no, you slow it down for me a little bit. I'm not too financially literate. $1.10% has taken place. And 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 am not too educated on all that stuff. No, that's okay. We can go into that, but I don't want to stray too far from the example. Okay. One dollar put into it averages 10% a year.

So after a year, a dollar in 10 cents. And instead of it just growing at 10% from the dollar, it's now growing at 10% from the dollar and 10 cents. Yeah. So it continues to compound forever. So $1. from where you are now to retirement. That $1 turns into $17.45. Pretty good.

And that's a guarantee? Is that change? Does 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. Could 30, 40 years. Hmm. We confirm. So I guess, what,

if I'm going to retire in like 4? 40 years. How many people have started? How many years? I don't know. Four? I said 40. Sorry. I was doing 30. Cool. I was doing 30. Okay. 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's the, I don't have the statistic off the top of my head. S&P 500, credit 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 $10,000 in right now to be worth $174,000. If I put, say it again, $10,000. As a P500 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, I mean, I didn't even know that was a thing. Yeah. Well, let me make this other example. The $10,000, if you wait 10 years to just F around, you know, and hopefully these business ventures work out and that's cool. Entrepreneurals,

but it's good. It doesn't mean we should all of a sudden just negate these other avenues to take care of our financial future. Don't think I'm anti-entrepreneur. I'm all about it. I'm doing it here. Yeah. Okay. I'm also taking year of myself on the side for retirement. So what? 174,000. Great. If you put $10,000 in right now. That you have saved? Exema is unpredictable. But you can flare less with ebbglis. A once-monthly treatment for moderate to severe eczema. After an initial four-month or longer dosing phase,

about four in 10 people taking ebb glist, achieved itch relief and clear or almost clear skin at 16 weeks. And most of those people maintain skin that's still more clear at one year with monthly dosing. Emglis, Librikizumab, LBKZ. A 250 milligram per 2-millimeter injection injection is a prescription medicine used to treat adults in children 12 years of age and older who weigh at least 88 pounds or 40 kilograms with moderate

to severe eczema, also called atopic dermatitis that is not well controlled with prescription therapies used on the skin or topicals or who cannot use topical therapies. Ebglis can be used with or without topical corticosteroids. Don't use if you're allergic reactions can occur that can be severe. Eye problems can occur. Tell your doctor if you have new or worsening eye problems. You should not receive a live vaccine when treated with Epglis. Before starting Epgless, tell your doctor if you have a parasitic infection.

Ask your doctor about Ebglis and visit Ebglis.com or call 1800-LillyRX or 1-800 545-979 by working hard or you could wait a year invest the same 10,000 hours now because there's last time it's only worth 67,000 dollars you wait a year 10 years 10 years so and you're you're assuming this is over a 30 year period right you've lost like a well they went from 30 to 20 years 30 20 years because you waited you waited some time so you lost over 100,000 dollars lost over 100,000 dollars because you waited 10 years to start investing okay so that makes sense yeah yeah okay what are your thoughts on this now I I mean I love it it. I guess 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? On everything, total? Yeah. Well, okay, no, no, no. On the distributions of the average of $2,500 a month. On that, how many, I guess, let's see, usually start it, I guess on average, like, around 50-ish hours, maybe a little bit more. Okay, well, ooh, return on a lot. investment of your time is pretty not great. 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 of share in this is opening this other

business. So what are we doing? I guess, what, like a five-year goal for us? Yeah. Well, have you guys chosen that? Are you just saying it? No, we need to get a little bit better about goal setting and stuff like that. But we've talked about our idea.

is 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 what's the goal 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 How are we going from $180,000 to a million? 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, so. Okay. Yeah. Well, so one of our other buddies, the 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, 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. Oh, good for him. But what are you guys going to 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. His growth wise. Oh, I see what you're saying. What did he do? What happened? 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 as video assets as opposed to just videos. And so he got a lot better at doing, 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 $10,000 for this video, he charges a percentage. And so now suddenly he's making $200,000 off of a project. So he got a lot better at the business side. And he's been helping us with that. 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's 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 at the least spoke well on the business side. Yeah. One of my teachers did, but 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 good at the business side of the things, and that's what it really sounds like from you guys, Jake, editor, and you.

I guess as far as optimizing our revenue, I'd agree with you on that. But as far as business relationships and everything on that side, I'd say we're stellar at that. That's what separates us from most creatives. We're always answering our phones.

We're never late. 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 medium. Yeah. I guess, so we've done, we've taken some steps. Last year we hired another, 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 a $200,000. Well, he was a business coach. He was worth the investment in our eyes. And he helped us take that step up from, you know, just charging minimal to, he got us a really big step up, truly. 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 truly 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. We got screenshots. What's in your checking account right now? Checking account right now. You can look. I want to say it's like 200 bucks right now. That's scary when things have minimum payments.

This is true. Okay. We, I'm waiting on a couple things. We, I guess I have that coming in tomorrow. I have another payment of $1,500 coming in in either tomorrow or Saturday, which is nice. Okay. So I have that and then. So for someone, $200 in there.

Uber tripin's a stupid expensive way to get around. Amazon, Amazon, Venowing out, $46 bucks, sending your dad $1,000. Why is your dad getting $1,000? He owns the property that me and my brother live in. Oh, okay. They just invested in it. Okay. Yeah.

Okay, well, that's a good connection to have. Now, paying off your chase card. Probably a good thing to do. And Uber ain't Uber and Uber and Uber. Very excited. Do you have a car? I do. It's been,

I haven't been able to use it for a minute just because I needed 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, $536 bucks. Paying off a chase car. Lift ride, lift ride, your dude, you come crazy.

Wendy's Hoover's cooking, Home Slicse, love homeslice. I'm very hungry here now. M.O's East Bar. Venmoing out money, Austin Airport, Apple subscription, Amazon, Apple subscription, Chicago parking. Uber tripping

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 Popeyes Signature IH Oh IH I hopped I have been an IH

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, 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 way.

Chicago has public transportation. I guess to get to, that's not just two in front airport. That was a lot of Uber Lifting. No, no, for sure. I'm in the suburbs of Chicago, sorry, I should have clarified that. No. Not a credit card. What's the balance on this credit card?

Bones on the credit card. As far as what's on it right now. What's owed? Probably like a thousand. Can you pull up your credit card? Oh, man. Here we go. More.

$1,400. Dude. Why? Oh, here we go. You don't have $200 in your checking. You have $5,000. $9. Well, I've got money in my PayPal and my Vemos.

I guess that's, I was kind of throwing it together. $1,400 on your card. Minimum payments, $47. 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, 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. Did you not even know you were getting interest charged? Oh, oh, sorry. Brain fart. No, I got you. Okay. Misheard.

You're misunderstood. Yeah, I only made a $40 payment there in the last month. Dude, this is terrible. And $30 of interest there. Really, everything. And then Pueblo, Viejo. Pretty good tacos. Pretty good tacos.

But what are you doing? 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 pay below Viejo, you're losing on a monthly basis, that single, that much in interest. So what would you recommend as far as 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 $50 of rewards. You should put that on the statement. balance. Help 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 are you in credit card debt? I suppose. Oh, boy, where are we going now? I was searching to see if you had credit karma yet. I'm going to have you download in a second, but why are you in credit card debt? I guess I just didn't. Because I'm paying more on that. I guess in my mind, it was wasn't any different than 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, I got no answer. Why are you holding a balance? Why has this not been something you've considered paying off? To be honest, man, it's been a little bit just 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 mean, you're losing 30% interest on a card you can't pay off and 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 for food.

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. You're only putting $40 stores at a month. Yeah, so I guess I could throw like $1,000 at an next paycheck or... Can you?

Well, I guess... Can you then afford to do things? With the other money that I'm getting. I could probably start eating at that away. What's the other money from? Just like the other things I said, whether it's acting gigs here and there and some content creation money. Nothing crazy, but... What do those bring in on average?

Long months, high months. It's so fluctuates. It's really very tough to say. I guess in an ideal where I could say like maybe $500. So do you have a savings account? I do not. So you're not setting money aside for taxes. You said I'm trying to, but there's no money.

I guess what I've done in the past when I have extra money. money is I will send it to one of my parents and just be like, hey, hold on this for me. And we've kept track through that, yeah. Okay, well, your credit score is okay. Love to hear that. It's 47. I mean, it's on the lower end of okay. It's your card.

Your card is weighing it down. You have credit card usage, 93%. Does your, 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 are you on this mortgage? I don't know. My parents are very good with money and they told me it be a good thing to do. I think it helps with my credit. Yes, yes. It's adding 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. So risky, if anything bad were to happen, of them. I don't know what would be coming to you. 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. What if one person wants to tell? What if the others don't? Like, what are we doing here? I guess I hadn't, I don't mean to laugh. I just, I hadn't considered my parents' death as like a thing for this. I mean, it's, it would absolutely suck. I hope it doesn't know.

obviously hope it doesn't happen, but it's an expensive mortgage, almost a half a million. What is the, what's the monthly payment? The monthly payment, I believe, is somewhere in the $3,000. So imagine for a second, the worst were to happen, $3,000 a month. You bring in $2,500 a month. What are we doing? You understand the risk? I do.

I see that. What do you mean they're good with money? What does that mean? Go into detail. I just believe my dad is very financially literate. Demonstrations of how? 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... But you haven't invested a single thing? No, I haven't. I really... The car is maxed out. 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 have a long way to go with all that stuff. 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. Anything can happen. And then that's just a bad situation. And then I put, 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 mortgage at some point that you're paying for your own house.

Yeah. Especially with where you're at, sacrificing low, you're taking low income. And you're making well under the median income in Austin. You're making $30,000 to year. The median income, I believe, is 55. in Austin. You're not doing well income-wise for the city you're in, specifically.

You are one of the 48.2% of Americans who makes $30,000 a less a year. So you're in that lower half. Okay. For individual incomes, specifically. No, 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? A 2005, Chrysler, Pacifica. Yeah, yeah, yeah, okay.

So you probably need a new car. Yeah, we're 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. Because you clearly could not buy one, so are they going to buy one for you? It's on the table. They're 24-year-old kid? Yeah, it's on the table.

It's just more so. I would prefer to either get this guy fixed. The problem is it just kind of keeps having it. issues. So, I don't know. 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 very often. Obviously, there's times when I, that's not going to get me where I go. Sometimes I borrow my brother's car. 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.

This is where I'm thrown off. We get you to a place of great retirement. We could get you to a place of, you 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. You could get to a place where we grow the business and you're able to bring home more. I don't think we're going to get to that place

because I don't think you, besides, 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 and cash, I don't think it's possible. Okay. You agree or disagree with that statement?

Hmm. I guess I'm willing to learn. I'm willing to realize there's better decisions that I can make. Okay. 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 something for me. I'd rather...

So you're not willing to sacrifice temporarily for a better remainder of your life? 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. I'm all for

finding cheaper ways to have fun. You know, going to the park with my girlfriend. That's fun, you know. Doing less expensive. of things. I am pretty good about when I go out to bars, I don't spend a crazy amount of money. I've always been a person that will just not do that if that's not convenient for me at the time. So I'm definitely open to learning a little bit more here and there. I just truly believe 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, to a certain extent, I mean, the time we're here is. is only the time we're 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 advantage of the best years of your life of compound growth so that later in later in life. you're able to just live. For sure. I'm open to that, man. I would love to hear more about things that I could do with the amount of money than 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, well, I mean, you could go crazy. You could go absolutely crazy. In fact, for the credit card, I would recommend at least a month of, you have your rent, your food, but nothing else. For a single month, nothing else. And what was the debt on that card? That was like a thousand to turn? Yeah, 14.

Okay, it might take two months of this or a month and a half, but every single penny 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, so if I get that credit card debt down to a certain number, then the percentage goes down. So, but 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 with what the Fed is doing to combat inflation. So any balance on that is just bad. Okay. And so I guess...

Higher the balance, the worst, that's for sure. So 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 to situation. I love credit cards because I'm someone who can manage credit cards. 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 and half burned and closed after it has paid off. That's going to 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. You haven't demonstrated, so. I have not really known these things, and it's kind of, I would say, if I had someone like you to kind of, like, walk me through. And I probably could have asked. Well, now you know.

Yeah. Now you know the interest in 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 $10 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. It's one of those things I just haven't done.

There isn't anything more than I just said, really. As far as, like, unless you have any specific questions? Well, I guess I'm just saying, like, you're saying once I get it to zero, cut it in half. I would for your situation, because you have not demonstrated. 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, far out weighs any impact you 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 that I knew what I was doing

and I could. And I got it down to zero. What would my steps from there be? Then, well, first of all, we're budgeting. You know your categories. For example, the most basic one you can do

50, 30, 30% on needs, 30% on wants, 20% on saving and investing. Okay. The 30% of your wants, maybe that goes on the credit card. And you're your gas, something like that. That's a good way to start testing if you can do it. Maybe you 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, like, pay it at the end of the month, 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. And 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 worst. 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 score. So that's the other thing that someone recently told me. You don't want to spend 30% of what you're allowed to use. Your utilization, yeah.

Okay. Or especially hold balances, but you're going to pay it off every month if you 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 the 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 $10,000 car if you had a $10,000 merchant fund.

So in this situation, I would extend the sacrifice for another six, seven months. Save up $10,000 as quick as you can by cutting back on everything. Once you have $10,000, 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 sometime. 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. Because you need to take care of future you. And that's S&P, that's that one account? I'm not going to give advice investing advice for legal reasons on here, but you can talk with a financial advisor for not too much, especially for the return that you get from speaking of the financial advisor. What I do is I put into like the S&P 500.

Yes. Cool. Yeah. 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 date that you'll select it in the fund, it gets more conservative. Or you can do things like mutual funds, but usually they have higher management fees as well. Okay.

Variety of options, financial advisor, walk you through it. But that is 20% of your post-tax. Yeah. Or even higher, if you can, but at least 20%. And that's where you budget. You set aside your fund money. This is how much. I can afford spent on fun if I'm still hitting 20% on investing,

and then you just don't spend over that 15%. It 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 $10,000 for an emergency fund. In fact, you might have to save off $20,000 is because $10,000 might be going to get a car. Okay. So it might be a year, year and a half. I guess, yeah, can you, I don't even know how much, like, cars cost, like, 10,000 for, like, a reliable car?

Reliable car, absolutely. What you do, if you're getting it in private sale, especially private sale, which is where you can sometimes find better deals instead of being swindled by a salesman, 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.

You don't just want to take a car, though, because you can afford it. Yeah. Yeah. 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 on, 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. that's something I'm going to have to take back and think about. And it sounds like something I'm capable of.

So I'm going to 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 finances because we do not teach personal finances in this country. So it really comes, it just stems from a place of ignorance. It's just not a bad thing. but now that information is being presented to him,

it's up to him to take everything to the next level with these kind of debts, 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, the debt's not crazy, so Hammer Financial Score 4 out of 10.

Check out all the fun things in the description, like my Instagram and Twitter, and don't forget to subscribe. Thanks.