Financial Audit - First Time This Has Ever Happened...

Episode Date: November 20, 2023

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Hi, I'm Alex. I'm 22 coming out of San Antonio, Texas. This is financial audit. Welcome up to Austin. So what do you do for a living currently? I work as a facility technician is what it's called. I work in critical environments. There's a couple companies that do it. Couple companies are you contracted to different companies? No, I just work for one, but there's a couple competing. Oh, okay. What are you currently making this rule? I'm making $105,000 a year. You said 22? Yeah. Woo!

$105,000 a year. What the fuck? That is awesome. Congratulations, sir. Thank you. What do you... Wow. Okay, what do you need to get into this career path is what, everyone is asking?

I didn't go to any kind of school. I started working at 17. I lived in Germany. Worked for a Volkswagen Audi dealership. From there, I did apartment maintenance, hotel maintenance. and just gained a lot of knowledge about HVAC mechanical, electrical, which is what I deal with. And part of the reason I got the job is I was just in the right place at the right time. I was buying a motorcycle off a guy on Facebook marketplace.

His AC was broken. I was working in an apartment, so I had extra parts. And he was like, shown me the fan on it was out. I was like, I have a fan I can just bring you because I'm going to come back and buy the motorcycle. And so I brought him a fan, helped him fix it, and he ended up referring me for the job. That's incredible. How long have you been making this kind of money? Since August of last year.

Of last year? Yep. So you must have lifestyled inflation the fuck out of yourself. Like something must have happened. You've been making good money. Yeah. I mean, that's more money than I've. well that's more money than I've made before this job I think with some sales stuff I may have

gone slightly over on really good times but at 22 I was never even I wasn't even close to making that kind of money at 22 that's incredible how are you possibly possibly why why in your situation have you gone and just taken out insane interest rate death across the board I want to know why you've done that and then I also want to know why have you not paid them off is this is something you should have easily been able to take care of is your family in san Antonio um no okay even still san Antonio you can live relatively cheaply yeah what the fuck so it actually used to be worse okay yeah it used to be a lot worse and i've been slowly paying things off this year by slowly It definitely could have been better.

I.e. minimum monthly payments. Yeah, for the most part. I did have a car I got rid of, motorcycle I got rid of. Okay, I'm sorry. I'm going to interrupt you. I'm sorry. So that means at one point you had four vehicles. Might have been more. No, it was four. It was four at once. That was the worst I had. Why? Why do you need that?

I just love cars. I like okay that's that's what I love it's a terrible hobby to get into because it's just so expensive you can do it right there are people who do it right you absolutely can I did not okay this is honestly like the thing

I've been most excited about for months and months and months and I get to finally talk about it my team and I have spent billions of hours it feels like going through every budgeting course that exists online what did we find Well, a lot of influencers and gurus like to do quick cash grabs and not go through a lot of detail. And they barely give a variety of situations that can apply to a lot of people other than a very specific narrow few. Resources are rarely provided and thorough examples are not given of how to actually budget.

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It's right at the top. I highly recommend it. Take control of your money for the first time in your life. Sorry. Continue. You know, like when I turned 18, I got a cheap little, like $3,700 of GTI. And spent more money than I bought it for in parts to modify it. Did the value go up with it?

Isn't that one of those cars that maintains value quite well? Yeah, but then the engine blew, and so I sold it. And then that happened with another car I got. and it's just been kind of this unicycle of me buying cars because it's fun and I want to. What about the other debts? I mean, we're talking credit cards. The credit cards is just unwise spending. You make way too much money, though.

I do. Are you telling me you have not budgeted ever? I have a budget. I just don't stick to it very well. Well, then that's not having a budget, to be clear. Physically having... Okay. Okay.

All right. Okay. So, okay, give yourself a score zero to ten. Sorry, is this, you, it's this, I think, I think this is actually an exciting episode. I think this is going to fall down towards episodes that people have actually requested. A high income earner, but are just not doing well. And that is clearly you. What scares me is, man, you're developing these habits in your young 20s, 20s.

20s? Where are we in our 30s at that point if this is what we're developing in our 20s? Where are we in our 40s and 50s? Are we retiring? I don't know. You've put money to retirement. I'm actually happy where you are there at 22. It's incredible.

But you've just negated the whole thing by putting yourself in... Top of the pile here is 18%. I want to be smiling. I'm terrified. That scares me. Give yourself a score 0 to 10. Maybe a 2. your retirement's going to be what carries you

your retirement's going to be what carries you so what is this so what is this so what is this so what is this because what we have here are three of these Navy federal consumer loans of just death of just death so we have what is it which one uh 18% 16,000 dollars

that's a Corvette okay well what 2008 Corvette You have a picture of it? I do. Can I see? Yeah, absolutely.

I'm not a car person. I need to put this into visual for myself. So we owe $16,609 at a death. 18%. 18%. All right. I'll admit that it's a cute car. If I saw it, it would be like, that's a cute car.

Okay. I will admit that. By the way, could you email? those to us? Yeah, absolutely. Okay, minimum monthly payment, 413, these are going to add up. I already know,

having obviously gone through it. It's terrible. It's terrible. Why do you, you don't need this, man. Okay. Okay. Okay.

Let's step back for a second, even though we've barely even dipped our toe into this. You make $105,000. How much was the car? The car was 17. Okay. You could afford that. That's great.

Yeah. I could have got you to do that in cash. Okay, you don't do cash, that's fine. You might have to borrow for it. Okay, you borrow for it. If we have to borrow at 18%, is this a car worth getting? I don't think so.

No stock market return. No stock market return is going to beat that. So what the f***ing is it? Well, I don't know. Corvatt, is it? How well does this maintain value? They kind of depreciate, and then they hold value for a good while,

and they depreciate more. It depends on the model. This is a base model. So it's going to be worth $17,000 for a long time. But you bought it at? 18% APR. Oh, you bought it at what? 17.5.

Yeah. Just pretty low for this car. The only issue is that I blew up that engine running nitrous. So you've blown up two engines? Three. What are you? What are you? I'm confused.

Why? Why are you blowing up engines? I like to add power to cars and go fast. If it has wheels and goes fast. But why are you blowing them up? Like, I do, so this is beyond me. This because I don't give it. I have a Jeep Cherokee.

Yeah. I'm going to run it in the ground. What are you doing? It's a hobby. Break it and you fix it. It's just an endless cycle. Okay. That's just what you want to break it?

I like fixing things. I don't necessarily want to break it. I want it to break, but I want to go faster. I'm just trying to go. faster is by adding more power and more power breaks things. If you've been using Mint for your budgeting needs, I've got some news for you. Mint is shutting down and that means you're going to need a new budgeting app in your life. So let me introduce you to an all-in-one finance solution that I personally use, Rocket Money.

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and it's here to make your financial life easier. Get started today, and don't ignore the importance of taking control of your money. My gosh. So, I mean, I'm just, okay. Where are you driving these? Mexico. This is weird, man. I did not know what I was walking into.

So San Antonio, so you drive like what, six hours south? Yeah, there's no speed limits on the highways in Mexico in some stretches. Yeah, but couldn't you get someone else killed? I mean, and yourself. Yeah. Fast is fun. I get it. Go fast on a roller coaster.

I'm a bit of adrenaline junkie. Cool, but what about the other person's life in the highway? You go when the highways are empty, 3, 4 a.m. And you can guarantee there's not going to be a single other person, because nighttime now that becomes more dangerous. There's very few people. What about spending in a little money? Well, I mean, if you manage your situation correctly, you could.

What about some time at a strip, right? The closest strip is like five hours, I think. Does it Mexico five hours? Something like that. Yeah. They shut down the strip in San Antonio a while back. Okay. Why not go the five hours to the more safety-oriented thing?

I'm just thinking of, okay, obviously, I want you to live, but it just becomes a selfish thing. It becomes a selfish thing where you're doing this and putting the risk in other people. Mexico doesn't have any speed limits? Some stretches of the highway there. Interesting. It's kind of unregulated. Interesting.

How are you doing this? Well, not anymore because the engine blew up. So blew up. So what does it take to fix that? Too much is the answer. What's worth now? Machine Shop sitting, eight if I'm lucky.

I take it to a machine shop, see if the scratches on the cylinder boars are fixable. And if they are, then probably eight grand old set and done. If they're not, I'm probably in 12 for a new engine. So you keep blowing these things up. What did you have to do?

I'm just, this is just for me. I hope it's interesting to y'all, but I'm just like, what did Osama bin car over there do to blow up all these engines? A lot of nitrous and a lot of boost from turbos. So that was a 300 shot of nitrous. It was doing a 200 okay, which 200 shot adds 200 horsepower, 3001.3. Didn't like the three as much. Oh my gosh, all this is going on my head.

So what I'm hearing is just stupid. Yeah, yeah, exactly. You know what's not stupid, hitting the subscribe button. We're trying to get to a million subscribers, and I can't believe I'm even saying that. You guys are awesome. You guys are amazing. You're amazing for being here.

Not amazing for blowing up cars. Thank you. Because we talked about one thing already, and we've already gone down the rabbit hole of death and insanity. Starting to blow up a little less as time is on. Yeah, I'd go for zero blowing up is what I would go for. Personally, in my car experience, I go for my car is not blowing up ever. Might just be me.

Might just be me. What is the 17.75% interest rate of death? How much is it for? 1,577. That's what's left on it. That was the first car I bought. It was a Volkswagen GTI. Does it exist anymore?

Has it blown up? Yeah, it's not running and it's not worth fixing. Because actually last month I brought the balance down to $1,000. So it's like, in the next paycheck, I can pay it off. But to be very clear, you have these insanity, 18% interest rates on things that are not, You can't use them and you owe 18% on them. Yep. It's like, because I have a car that works and works well now,

I'd rather just pay it off than spend the money to fix it. What would it cost a fix and what would it be worth after fix? I don't know what the market is on those right now. That one has like 220,000 miles and I'd have to pull the engine out and have a look at it. How long have you owed this? I bought that car in like 2019 So for four years

For almost five years now No 2020 was when I bought it You have been paying at basically 18% interest rate Yeah Minim monthly payment of $94 Yeah Okay

My soul just hurts I just have a little pain That's all My wallet feels it All right What do we own An insane death 12% on $4,309

That one is a Subaru WR. It's an other car. Yep. What's this worth? Let me see a picture. I don't have one on hand of that. You have all these cars to get off to and you don't even have a picture? I have one of the Corvette.

I like the Corvette. Why do you have this if you don't like it? Because I did like it and the person that sold it to me said they rebuilt the engine and then within about three months of owning it, it blew a head gasket. At the time, I wasn't. Did you take it to anyone to, like, inspect and check out and be like, yo, is I just not going to blow? A look at it. Wait, this doesn't work either?

No. Because Subaru's can blow head gaskets in very odd ways, and they aren't necessarily detectable when they start blowing. So what they had done, the previous owner had removed the thermostat on it so that the coolant would not blow out. But when the car got under boost, it would blow the cooling out. reservoir. And so eventually it just blew all the way open and car stopped running. At the time, I didn't have the money to fix it or garage because I was living in an apartment. Dude, you're like addicted to this hobby. Oh yeah. It's, I'd say it would have been more financially reasonable for me to develop a hard drug addiction than to get into cars. Oh gosh. Well, not encouraging that.

Well, I probably would be making what I make if I did that. So. 12.14% minimum monthly payment $141. That's a third car. Okay. This says Audi at the top of it. Yes. So we have a fourth car. Yes.

So this one, hear me out. Hear me out. This one makes sense. Because it's low miles. For what it is, the price wasn't bad. And I actually had two Corvettes in 89. and an 08, but I'm preparing for a move across the country, so I sold the 89. What is happening?

This story evolves. And driving the 08, I was spending about 600 a month on gas because I drive about 2,000 miles a month, because a round trip to work is 60 miles. And so I was like, I need something more fuel efficient, 600 a month is a pretty good car payment. and having something that isn't in need of repair because it's an older vehicle and a modified one would be better. And so I got this car and I'm getting like 70 miles per gallon on it. It's 37,000 miles. What's it worth? I think that would I probably 22, 23.

Bought it for 25, 5 out the door. Yeah, but it's at 13% interest. Yep. So it's, sure, it's slightly dipped and it's kind of maintaining. but you're, I mean, you're losing more than the S&P gains. Yeah. So it's just like, fuck me. And also, why do we have...

Is this one operable? Yes. It sounds operable. Yes. So one out of the four we have. Okay. So you've done two things that were quite bold today. One, you've walked into the lines then of someone who hates that, and we have this.

Two, you've walked in the lines then of someone who doesn't give a shit about cars. And honestly, kind of dislikes them. So it was just like, you know, all right. $24,000, $1,000 of interest, $1,500 of interest stolen from me this year so far. Minimuthy payment of $5.5. What do you want? What do you want?

What are you on? You're on like, yeah, scheduled payoff date, 2029, the end of this decade? The end of this decade, of course. 13% interest. You're making my heart pound. Like, actually, I can feel it. Oh my gosh.

Should we check what my heart rate is? Like, I can, it's like killing. Like I'm slightly shaking. Yeah, I'm at 108. I'm going, man. No kidding. A Jared card? Yeah.

Who did you propose to? Um, I bought my previous girlfriend quite a lot of jewelry. On debt. Yeah. So because it was like they do 12 months, no interest. And I was like, I'll pay it off. I didn't pay it off. Yeah, it's accruing interest.

And that's why I like to finesse the system. I like to do zero dollar things. It's great. You figure out what it takes to pay on a minimum monthly basis in order to pay it off before interest accruiting. You do that and you did not do that. So you went into debt for an X. An X that is no longer here, right?

In your life. And you still essentially owe money for her. Yeah. when'd you break up uh what's today oh jeez Sunday

oh no dude I'm sorry no no that sucks it's life it happens it's life I didn't know it was so fresh before I made no you're good I'm sorry I'm not worried about it

you have that strong outer core that you're trying to present I respect it but like And when I get broken up with, dude, I'm like a mess for minimum three months. There's a mutual thing. She needs time to grow and she's not ready to be in a relationship right now. So we're together for almost two years. Well, you owe 5,10023 on this card. You've made $185 payment, but $131 of interest occurred.

And that's the killer. That's probably the worst card because that card is like 30% APR. and it's killing me. $5,132. $24. is owed. And $180 a minimum monthly payment. I have a death interest rate.

Yep. Let's see. I can't find it. It's 30% on that one. Okay. Gosh. So this is just like never going to be paid off in the way that we're going about it. Yep.

Personal long. for, okay, a personal loan for what? That was when I moved. I didn't have the cash to pay the security deposit in first month's rent. Why haven't you paid it off? Well, that's not just for first month's rent. First month's rent, unless it's like a, okay, you opened it for $5,000. First month's rent wasn't $5,000.

The reason I haven't paid that one off is because, for whatever reason, it seems like they charged the interest all at once with the loan. so I'm not accruing interest and I'm not losing any interest by paying it off it was definitely more of a predatory company the original loan was for three have you looking at the terms though where it's because what what some can do is they can show interest that is like

accruing but if you pay it off you pay it off like that interest like won't be hit in the end but it may have been in the situation I can't see because this isn't really a statement I remember reading the terms and I think they said that the interest accrued and that it wasn't charged up front but I'll have to go back and see because I thought it was odd

when I looked at it that it had been What's the interest? I don't remember on that one I can pull it up and check though It's up there though Currently in the 20s Currently owe $2,293 92 cents

With a $127 minimum monthly payment Okay So we continue. Navy Federal Card. You owed $4,967. You made $122 minimum monthly payment, which is the minimum monthly payment,

which is now $123, 123. $123.39. You purchased $85 of things. Why? Why? And then new interest, $73. Now you're over the balance. You're over the credit limit.

You're over the credit limit. You're over the credit limit. So if you're over the credit... I'm just saying the same thing over and over. That's when I know I'm just dying. Villebro credit none. You're $3.94. Over.

It looked like you were going to say something. Whenever I see that card go over the limit, I pay it down. But. That doesn't make sense. Well, why don't we just pay it down? Why do we go over the credit limit? Um, oh. I think it goes over because of interest.

Like I buy it and then it accrues interest. at the end of the statement, it's over the limit. Buddy, you're killing me. I'm actually, like, shaking. I haven't felt this way in a long time. It says I'm so anxious for your situation. And it's Uber eats and it's Uber eats and it's Uber eats. Three Uber fucking eats.

I'm disgusted. $700 an interest loss this year so far on some fees as well. It's a fucking Uber eats. So what? Oh. You're lucky. that the episode that you know we're uploading the day of is the day that we're announcing the budgeting course and you're going to need it man you're going to need it and i'm giving it to you for

free and i assigned you as a prescription you are taking it man you're going through the hours there is it it is literally the best thing you can do to change your life man i'd love to you you need to you need to people in your situation you need this we designed it specifically for you Yeah, that's the reason I came because I know it's like with the things I want to do with the cars or even like buying the Corvette. If I wasn't in debt, I could buy that car in four or five months of saving, if that. Yeah, man. And now it's just, I'm paying it for forever almost. It feels like forever.

It's at 18%. Yeah. It's just I'm losing hundreds every month to interest. It sucks. You know what? It's unacceptable to someone making $100. five thousand hours a year. Overdrafts.

You didn't overdraft this month, but you've overdraft this year so far. So I share rent and the rent payment goes and sometimes my roommate tells me he's going to get the money and the money doesn't come. So it gets over. How often does that happen? And then. How often does that happen?

Way too often. Okay. So you know what happens? So you have a buffer in your checking account like an adult. Sucks that he does that. Yep. and you, you know, yeah, maybe he's not a roommate for the future. Okay.

But if you know what happens after a couple times, it's like, okay, we're going to have the buffer because we're not going to pay a $30 overdraft. That's what I started to do. I've just... Did it because you only have $1,000 in here? That's enough to cover his share of rent. And you're sure? Not both, but I get another paycheck before rent hits.

So I always have enough to cover. And no other automatic payments come out after that? I have a car payment, but I always make sure I have enough to cover his share rent and my share and what else I need to cover. And then he pays me when he pays me. And then what do you do through here? You go to the vending machine. And you go to the vending machine. You're obsessed with the vending machine.

Cash half and out money. Vending machine cash a half and out money. What's 365 pay? It's one of the... they have like a little food market at work food market food market um boba toopia uh boba topia uh boba's yeah bobatopia and i i love i'm a slut for boba not when we have debt my dude not when we have four four car debts three of which the cars are not

even operable natural bridge caverns great red rooster food natural bridge caverns cash apping out money zelling out money rooster food Vending machine, vending machine, Lins Express, the food court, Uberin, Venet machine, Venet machine, Venet machine, but if we just, if, hmm,

oh, you have such an opportunity to be such a, such a good position. It makes me so sad to see it being thrown away right now. A place to shoot, it's expensive, it's an expensive place to shoot. Amo costs money. Yeah, yeah. Why are you just throwing away money and ammo, though, when we have debt?

It doesn't make sense. Logic, because it's not there, man. Venet machine. Grubhub. Wingstop. Wingstop. Rooster food. Waterburger.

Uber eats. Venny machine. Venet machine. Amazon. A firm. Great. Another thing in the mex. Oh, that's not a debt.

I use a firm's high-yield savings. It gives you like four points. So you put a buck in there? Some percent. Or is that? That was to open the account. Okay. 4.1.

4. I can, I think it's like 4.35. You so far, dude. It's 4.6. Okay. Vending machine, uh, diner, sushi, vending machine,

fanny machine, fending machine. You don't need to be spending that money. You're killing me. You're killing yourself. You're destroying your future. Ending balance in this other chicken account, seven bucks.

Yeah, that's not the one I use. I only use that one. to send money to it to pay the Navy federal loans. Everything else goes through my main checking. Everything else, except for this Apple Bill and the Chipotle and taking money out with the ATM. Who knows where that went?

ATM fees. And of course, tolls of which you do not need to take in Texas. I live in Texas. I know you don't need to take them. And Boba Tea and Amazon. The toll road's a story, actually. So I sold a car and left the license plates on. Oh, oh no.

The car never got re-registered ever. And so I get a toll letter, and legally I'm still responsible for it, and I tried submitting a title transfer notice, and the car won't show up in the system for whatever reason. And they also went and ran a red light with it, too. But, and they got caught in a red light camera. You don't have to pay those They can't come after you for them

They can't send them to collections They don't affect your insurance Red light cameras aware In San Antonio They're illegal in Texas They are But the contracts They still have contracts with the companies

Up until I think like 20, 25 2028 They can't legally pursue them though They just hope that people pay Yeah, that's it And then the Oh not even that dude

Then Chick-fil-A and pancakes. I thought that was in. And then Apple Bill, Amazon. The fucking vending machine, vending machine, shippole, pizza, Academy Sports, Uber, a place to shoot again. $287! You can't afford to live! And you're

doing $287 a place to shoot. Then another $130 a place to fucking shoot. Vennie machine, vending machine, Apple bill. It's a Mexican place, Apple bill. Amazon. Dude. You lied to me. I put money. there so I can pay off my Navy

Federal credit. First of all, your Navy credit thing is over the limit. And number two, in there, it's just you spending, you spending, you're spending. You lie, don't me. What's the point to hear if you're going to bullshit me? Why, dude? I'm sorry, just why. I feel like I always got to do something.

I've got to go be busy. I'm like being home. Why don't you go and walks, going like runs or something? I'd probably be a good idea. I do. I have two. Take them on walks. That's what I do.

To a dog park. That's doing something. That's nice. I take them to the dog park next to the house. Cool. There's a... Do that twice as much. In this half as much.

Okay. Fidelity, $3,000. Not super exciting. It looks like it's within... That one's for an HSA. Oh, okay. Cool. That's lovely.

Yep. And then the other one is the 401K. $4,000. So, okay. I'm glad you're getting started. Yeah. There is, you're going to hate this. There is a 401k loan on that, though. The reason I took that loan out was because I anticipated to move across the country, because I had a company that reached out to me and wanted me to go work in Virginia, and I need to get a trailer hitch and pay for you haul for my car.

money. What's the interest rate on your 401K loan and how much did you take out? 9% and 2 grand. 9%. 9%. 9%. So the S&P 500 is beat it by 1% this year, if that's what you're even investing in. The 401k loan at 22 is disgusting.

It's disgusting. I feel the vomit. writing their projectile onto you because of how disgusting this is. Your future, man. You're destroying it. You're destroying it. Oh, I'm scared.

Okay. I don't want you to be a f***. And we constructed these rules to not be a f*** up. You're breaking in. Breaking rule number one immediately. Does that fit in the budget? Absolutely not. Rule number two, you need an emergency fund.

Do you have it? I didn't see it. Do you have any money in savings? Keep $1,000 cash. Okay, you do not have an emergency. Great. Don't hold the credit card balance. You know you broke that.

So you broke one, two, and three. Stop buying cars you can't afford. No, you're getting there 18%. You can't afford that. My goodness, you broke immediately the first four rules. Live someplace you can actually afford. What's your portion of rent? $750.

That's incredible. That's incredible. You're doing great with work, too, so that's great. School, we don't need to worry about that because you're doing great with work. You're not self-employed. Fantastic. Subscriptions I didn't see a bunch, but you should cancel them if you have them. Okay.

When I know how to not die in the Walmart floor, this is usually for like f-fitting crypto and like day trading and all that crap. But you're doing a 401k loan. May as well be broke. So you're breaking five rules of do not be a f***. I don't want you to be a f***ed down the path. If you want your rules for not being a f*** up, you can sign up in the description below. It's free. It's fun.

I made it for fun. I don't like that. You're breaking the rules. It's actually very upsetting. debt payments are only 14% of your spending. You're like, you know, a matter of one month of payments are too big

and I can't do things. It's 14% of your spending. So, uh, transportation total, though, that is another 16% and that does go into debt. But your bullshit eating out to eat,

7.1% where you're necessary grocery shopping is only 4.2%. So great. Unknown shopping, Amazon, 5.4%. Miscellaneous.

It's the vending machines. It's the tequitos. It's anything. and everything else that you just don't need 8.3% that could be going towards debt. So, so far, that's 8, 7, 5 that could be going towards debt. That is not necessary. 8.9% other large purchases. That's ATM which, who knows where that went, and Central Market, which is actually groceries.

I don't know why we put that there. Central Market, it's an expensive way to do groceries. It's basically the HV version of Whole Foods. making some stakes for a date. Cool, because of H-E-B stakes. They're not as good. They're not as good. It'll be okay.

I don't know if she'll know the difference. She does. Is that the one that broke up with you? It was mutual, but gave her some... But it's that one. Yeah, gave her some H-E-B stakes. She noticed a difference. No offense to this?

I don't know. No offense to you? Looks like it didn't make a difference. That was me. I'm sorry. No, you're not wrong. Call it how you see it. That's the only way I live life.

So we have one, two, three, four, five, six, seven, eight of the most disgusting debts I've ever seen. Right. Yeah, you're going to take that. I'm sending it to you. I'm sending it to you. And you're going to take that course, dude, because you need to change your life now. But I'm going to help you put together a rudimentary budget as we do on the show. But is there even a point?

I mean, that's honestly my question. I ask people that sometimes, so I'm actually curious. Is there even a point of making you a budget? Just the way you've lived, man. It's just like, we go get another car. We got to go do this because I've got to go do something. It's just like, if I make you a budget, man, you've made a budget before or you've never followed it.

That's one of the reasons why we made the thing. So you can actually, we teach people how to actually stick to it and follow it. A lot of it is with the eating in terms of the budget. Yeah. And going to the range that's not in the budget. those are the two categories I overspend, but the past year I've paid off a pretty significant amount of debt. How much? You weren't putting anything extra on this?

I didn't see it. Not. We're going to the boom-booms instead. Yeah, I can show you. I've made $500 payment on that $1,500 loan on the GTI. Last month, it was like right after the statement ended up. Right, and that's why we put it down to $1,000. So, okay, what if you paid off?

I last month I also paid off a $900 balance on a credit card I don't know if it was last month or the month before that but it paid off like another $800 I had like two cards with credit one that will total like $1,300 together and then the spire card that was $900 so you've had you had even more debt yeah my gosh you've put yourself into a situation I can be happy about that yeah um we can be happy about that not to just go negative but I will say with the income you're doing and where like 30, 40% of your money was going and the choices you're making, with the income you have, buddy, you could have tripled what you did.

Yeah. Tripled. You're extending your situation. You're borrowing against your 401k. You're preventing yourself from living life. Yeah. Your portion rent, 750? Mm-hmm.

And then car insurance, I pay 300. The insurance bill is like five. or I pay $2.50. The insurance bill is $5.50. My roommate and I share insurance. For car insurance? Yeah. Why?

He drives your cars? No, it saves us both money. You're on them together. Yeah. Okay. Yeah. He has a car on it. The Corvette isn't insured right now because it's just sitting in my garage.

Audi's insured, and then he has a car on the insurance, so we just pay for that. Rentals insurance? Yeah. 16-something a month. It was lemonade. It should be on one of the bank statements. Your portion of utilities and Internet? The utilities is included in rent.

Wow. San Antonio, cheap. Well, it's three of us in a house, and it's a pretty big house, but it's not too bad. Internet? 55 a month. Gas? 140. Usually between 140, 200 is what I spend.

Any ongoing medical things For prescriptions? Anything we should put in the budget? Okay Yeah, I've been trying to take steps in the right direction And slowly been doing that? No, I have a home gym So I work out at home

I saw a plan of fitness in that, huh? Might be something you need to cancel. I need to go cancel that, yeah Okay I just wasn't going to call it out Because I'm like, Jim, I'm happy to put in the budget. Yeah, no, I just need to go cancel that one Groceries 300

tow paper anything else you need to survive essentially 100 phone bill just 122 anything else you have to take care of on a monthly basis do you mind if I pull up my finance I obviously have to add up your debts but yeah go ahead let me double check real quick phone bills 127

I have a subscription to you said to canceles Okay. Uh, no. You can put your subscription in your toll paper fund if you have anything left over. That's essentially what I allow. Then debt, no surprise, and it's all going to fuck it. Stupid cars.

$1,584. Killing yourself, man. Yeah. I've been trying to take steps in the right direction. It's just slowly breaking bad habits that I've had since I was 18 and that just snowball. I'd sell what I can, obviously, when it comes to the car. stuff. I'd do all that and try to do what you can. But just because they're broken and there's a lot of stuff.

Let's just put it in the situation and let's just go from there. But that would speed up the process. Yeah, absolutely. You do not need this stuff. $3,322 is what you need to survive. We had income coming in as 7,644. Yep, cool. Sounds about right.

And this is why, again, you follow my budget. Use the, this is what I want you to do, though. I want you to, in the template that we have that we're going to give you in the budgeting course, I want you to use that, actually use that on a monthly basis, man, hold yourself accountable. And it's going to show you things. And you rate your priorities on the items that you're spending in your budget so you know what you can cut back on things that aren't giving you pleasure. Yeah. Pleasure.

But like, you know, actual like happiness. Yeah. It's like a happiness skill. It's a really good way to budget. I want you to do that. I want you to follow it. And if you put in these categories like the way I said, man, I mean, do. Dude, extra $4,322 a month.

There's no, no, no reason why you should have this debt to begin with. And there's no reason why it shouldn't be paid off. Yeah. It's disgusting. First month, put a half of it towards that $1,000 that you already put aside. Let's just call it the end of this month. Okay, cool. You have a one-month emergency fund.

End of this month. Starting fresh. Next month. Volkswagen, as you said, paid off and then pay off a 401k loan and put $1,000 to the personal loan. Okay. Okay. Month number three, step right up. Paying off the rest of the personal loan and putting $3,000 towards WRX.

Month number four, finish WRX. put $3,000 towards Jared next month put $2,000 are we on month number six? I think it's five.

I do have a question. I am saving for a move. How much is the move going to be? And why are you moving? I have a job offer. How much are you going to make? Same as I'm making now, just half the days.

Where are you moving to? Virginia. Okay. Yeah, cost of living is going to be a little bit higher. Yep. But I'm just going to run a room in somebody's house. I'm thinking about just taking a 6x-by-12 U-Hall and the car. So really all I'll have to pay for is the new place

because the company is going to reimburse up to 7 grand. Oh, I can't happen under 7 grand. I just need to have the money. You got to have the money. Okay. Cool. So add two months for that. Okay.

I had two months at the beginning. So we're headed into five. So we're headed into month number seven now. Okay. So, yep, do that first. And then I should have a pretty good tax return this year as well. Okay. I'm getting a $4,000 credit for buying the Audi because it qualifies for used clean energy vehicles.

It's a lecture? It's a plug-in hybrid. Interesting. So I can get 16 miles. Well, obviously put that towards the interluxel. Yeah. But we're headed into month number seven right now. Pay off the rest of Jared.

$2,000 and then $2,000 put towards Navy Federal. Then the next month pay off Navy Federal with $3,000, put $1,000 towards the 2008 Corvette. That time that's going to be around, let's just call it. And that's, we're headed into month number nine. Say that's worth about $12,000. And you have about $5,000 left over on a monthly basis now. It's going to take 2.4 months to pay off that. So let's just round up, say we're headed into month number 11.

the oddies there the interest is probably like 20,000 hours left probably about thousand 20,000 divide that by about 5,400 okay and then that's about four months so let's just say conservative conservative a year and a quarter you should be able to pay it off year and a quarter and then what I need you to do from there your rent's going to be more so this is considered the 3,322, what you need to survive anyway because your cost of living is going to go up even though debt payments are going to go down. Okay, times that by six. We need to get, let's call it $20,000, saved up for a six-month emergency fund.

$5,000. At that time, $5,500, it'll take an extra three and a half months to do. So again, let's just be conservative. Let's call it a year and a half. There is no reason why if you actually, you know, grow up about that. this and discipline yourself a year and a half man and your life is changed completely and you're 23 24 it's insane 23 24 and you get to come 23 24 and let's just use the average stock market return going to 65 let's make it easy 64 so 40 years average stock market return average stock market

return from the history of the United States 8%. You already have $4,000 in the stock market. It'll probably be like 6,000 hours by that time just with the contributions you're doing, whatever. Okay. According to the survey I ran, 33% of you are not investing. So I don't know if you just want me to yell at you or if you're genuinely unsure of how to get started. Either way, you need to know about the brokerage app that I personally use for my single stock picks. And that's Moomu, a brokerage platform that makes it super easy to go from a total beginner

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So check it out. It's pretty cool. So 20%, you're doing 20% on a monthly basis. You might max out your 401. Okay. I could. With the new job, they're going to let me work overtime. And so I should be able to somewhere between 130 to 160,000 a year.

Let's just say you're putting in 1,900 on a monthly basis, which is the minimum you should do. You're retiring at $6.7 million. Yeah. $6.7 million or after inflation, I mean, that'll be after inflation about like $3.3 million in today's money. That's incredible. $3.3 million following the 3% rule. My goal is to retire by 45. And that's part of why I wanted to come here.

Okay, well, that would be $100,000 a year for the rest of your life. But $45. Okay. Well, you're talking, okay, so you're talking a little more fire situation. Yeah. With the job I'm doing and how young I am in it and how... But you actually have to sacrifice and pay off your debt first and get a fully funded emergency fund. Okay, so what, what, how much do you want to make a year to survive?

What do you need to make a year to survive in your mind? To retire? Yeah. A year. Pulling from your investments. About 150. 150. I can't believe we're even having this conversation because you're not even close to being in the conversation of fire, but I'm going to humor it.

Okay. So you need $5 million. And this is regardless of what Dave Ramsey says, by the way. Because according to Dave, you could have $1.5 million. No, you could have about $2 million and withdraw 8% a year because you'd be getting 12% in your mutual funds, which apparently he doesn't consider the actual management fees on that, and then he considers a little bit of inflation.

But either way, the statistics that I have using just a basic, very basic thing, if you retire for only 20 years, his plan's going to fail, or only succeed about 60% of the time. It's going to fail 40% of the simulations based on historic returns in the stock market. But if you retire for 30 years and you're going to be retired for more than 30 years, his 8% withdrawal rate fails, succeeds only 32% of the time. 30% of the time. Now, a 4.

Sounds like a car loan I'd take. What? Sounds like a car loan I'd take. Okay. Yeah. So a 4% used to be the rule that succeeds like 95% of the time. People just want to be, you know, obviously safer and just want to hit that 100%. 100% in order to hit that 100% success rate,

using, simulating all historic returns in the United States, you got to do 3%. So 3%, you need to get to, what did we say? 5 million bucks. So 5 million bucks by when, 45? Yeah. Why am I even entertaining this? Because right now it's just so scary.

Whatever. Okay. I'll say you're done by 24 because you actually follow what I say. So you have 21 years left. You need to get 4.5. Or 5. You need to get to 5. 7,000 or, where was that?

7,750 is which you need to contribute on a monthly basis, which is more than you make currently. So I don't know how you're doing it unless you're working more jobs. I'm planning on a second job. My buddy is doing solar sales, which is something I can do on my off days. But it's all taking hot leads through calls. Yeah, no, I would.

He's been doing pretty well with me. How many hours a week are you going to? working in your new job? It's not, you make your own schedule. How many hours a week are you going to work? Starting, I'm probably going to do 20 to 30 and depending on how well it does. What is the job? It's basically sit, take hot calls, hot leads from people who are inquiring.

Is it commission based? Yeah. No, no, no. No, in your job, you're moving for. How many hours a week are you working? About 40 hours, but I work three or four days, 12-hour shift. Cool. Why don't you find a similar job that is less paying even and just go do that for the other.

If you're doing fire. I can just pick up shifts. Usually. Yeah. Then pick up shifts. Work as many hours. Okay. Because we're talking about fire.

Normally I say, okay, get out of that. I have a fully funded or do fund and live 50, 30, 20, 50 percent on needs. 30 percent on wants. Actually, you live in 20 percent on investing so you can retire. But you're trying to fire. If you're trying to fire, man, you're going to have to continue the sacrifice for. 21 years. You're essentially not going to, people fire at like a million five, two million. You're trying to fire at five million in 21 years. So you're going to have to work your ass and you're honestly not going to really live the next 21 years, which is, that's hard, man. That's really difficult. But if that's what you want to do, this is what you have to do. Yeah. With my current job, I will most likely be a manager before 30. And in the sector I'm going to be working in management for these places can make usually 200 to 250 a year.

I hope so. I root for it. You're betting on that, but I don't know. You're 22. Yeah. So you don't, you've been working since 17. You've been working since 17. What, I love the golden, like, vision, optimistic, bright-eyed, yay.

Things never work out the way you're going to think they're going to work out. there's always going to be bumps in the road. Absolutely. So I wouldn't bank on that. I hope you get it. That's great. And I encourage you to shoot for that and make that your goal and work, do what's necessary to do that. Just know that the next 20, if you want to hit your actual goal,

it's like your needs need to be very minimal. You're not going to really spend much, if any, on fun and everything's going to go into investing. Because, again, you have to do 105% of your current income to meet that goal for 21 years. that's hard. Either way, I'm glad that was a fun part of the conversation and I'm glad we can at least get there. Now,

maybe the market will outperform and, you know, that could happen. Maybe, I mean, the average S&P 500 return over the past decade has been like 12%.

Yeah. But the average stock market return in the history of the United States has been like 80%, 80%, because that's what I went off to be a little more conservative. Yeah.

But either way, none of this is even a part of a conversation because you head down the path you're currently going down and you're... You're dying up. Yeah, and you're working until you die and what if anything happens

and you're just settled with the death and you're going through bankruptcy? At least you don't have student loans which wouldn't get forgiven. But I'm only having $1,000 to spot. I don't know. It's a scary situation. You keep blowing up your cars.

You're just being immature and irresponsible. And I have a 22-year-old, it's like, okay, kind of, not excusable, but at least understandable. If you have the goals you said you have and you want to go and get them, it's time to grow the fuck up, mature, be an adult,

be a big boy, and take control of your financial situation for the first time in your life, man. This is it. This is your moment to change. You started making a little progress. You should have been making much more progress, though spending statements were ridiculous

and they pissed me off. Barring against your 401K, unacceptable, buying a car, taking out of 18% debt, blowing it up and then doing it again three more times. No. Fix it.

Fix it. Any questions? Any final thoughts? I want to get the vet running. I want to put a new engine in it, which adds another two or three months. How is that even possibly on the priority list of what we just... All right. No, I'm sorry.

I'm sorry. I'm done. I'm done. I go through this and we get through how to fire and all this stuff. and the first thing you give about is your Corvette, I'm done. Let's, let's, let's finish it. We're done. We're done.

That's, that's, I had to cut that interview off. That, that pisses me off. That pisses me off. If we go, if I go through all that time and energy and work and caring about someone and wanting them to succeed, they immediately come, no, but this is what I want at the end. Oh, want an unnecessary want. Nah, that legitimately upset me. Hammer financial score, spending a budget, obviously zero out of ten.

debt, 401k loan, obviously zero out of 10 emergency fund. There's $1,000 that's a $1.10 retirement. I wanted to give it a higher score for his age, but the 401k loan brings it to a 1 out of 10. Real estate, zero out of 10. It's going to be a hammer financial score. Zero out of 10. Make sure to check out all the resources linked in the description below. They are what I use or would use in specific situations.

Thanks to all of our Patreon producers for making this episode possible. If you want to participate in an episode of Financial Audit in your, able to make it to Austin, Texas, please fill out an application in the survey linked in the description below. You can also send a link to your friends or family who you think might be good to be on the show. If you have any questions, you can email casting at calebhammer.com.