Financial Audit - The Most Insane Thing I've Ever Heard | Financial Audit Follow Up

Episode Date: December 19, 2024

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If I had an emergency, if I had like an emergency, like God forbid, if something happened and I had an emergency, I probably wouldn't have enough funds to cover it. But you give yourself an 8 out of 10? Where did you learn this from? Is this like a TikTok thing? No, no. From Chase? Yes. From the one who wants to make money off of you for keeping your balance?

Where did the $3,000 go that you made this year so far? The $3,000, I gave $1,000 to my mom. I gave... Why? In our, like, in our culture... Okay, here's a character from a South African president speech that I just made up from chat GPT. Good evening. It's an absolute joy to stand before you tonight.

Not because it's required by my job description, but because there's nowhere else I'd rather be. How'd you do the work? My accent? What was one of the... My damsel in distress? One of my lines? No, I've played a slave. Oh.

Adeline, welcome back to financial audit. Happy to have you on here for a follow-up. So we uploaded you on May 4th, 2024. You're 18, or you were 18 at the time. Are you still 18? Yes. What, when's your birthday? March 3rd.

Okay, wow, so you just turned 18 at that time. Okay. Model actress students. So you're trying to do a lot of things. And, you know, it's interesting. Especially back then, we had a lot of people who were kind of in really trying to get into the world of acting. That's kind of difficult, especially when you're trying to balance that with school. The majority of your money came from Instagram, posting ad bands, and you estimated that you made $1,000 this year, which is impossible to live on.

But 18 at the same time, you know, it's a different place to life. I'll be, honestly, I'll be transparent. We actually don't allow people like you to come on the show anymore. People that are just like right out of high school because there's like nothing to even see. And people that really don't have a job. But, you know, you were and we're happy to have you a part of our guest family and we're still going to go through this just like normal. But, you know, it's just an interesting thing because sometimes it's hard to deal with. So, you know, without a lot of things that have happened yet.

Can you tell us give the guests, give the audience, give myself an update of where life is life. looking. What life has been like since then? Well, I ended up getting a job and it's kind of like, thank you. I got my insurance license as well.

The job is basically signing people up with free health insurance. It's with the ACA. So that has really, yeah. So that has really helped me like kind of start my journey to finance a stability.

And so I started budgeting more saving. I invested, what's it called? I invested a thousand dollars like at once because I mean, that was, you know, what I had. So I invested that and I did see a small like return. I didn't even at a small increase. You know, it wasn't anything too crazy, not that I could like go buy a house. But it was, you know, a little bit of an increase. So yeah, I kind of was working on.

saving up in many, not spending as recklessly as I was before. Because I still live with my mom, I'm not paying funds or anything. So that was like a bonus. Like I did like strongly consider getting an apartment, but then I was kind of weighing it, pros, the coins, would it be worth it? And it wasn't worth it. So I just needed, you know, stayed as my mom to not pay by it just yet. I kind of like save up that money that I have like 10.

What's our school situation currently? I graduated high school. At the time, I was in the show, I don't know if I graduated yet, but I graduated high school. Yeah, I graduated already. And so now I'm just kind of working, saving up before I throw myself back to you to school. So what is the situation around modeling and acting? Oh, with September, I was able to do my very first trip that was not financed. I was able to pay the full thing down.

Yes. How much? It was, I think it was a little, I think it was like 15,000, 15,000, 16,000, but this included the flight. Where'd you go? Milan, Italy. Why? For what? For Milan fashion.

How much did you make? Um, what's, uh, I think I made around 300, 400. However, however, the purpose of me going to Milan was not for was not for compensation. It was to network those connections. I got to work. So what everyone says for everything. Possibly. But in this industry, I think we touched on it a little bit last time.

But in this industry, unless you're supermodel, you're not making a lot of it. You have to invest a lot before you make them. I know, but I'm just trying to think about Focus Alive. 13,000, you said? Yeah, around that. 13,000. That's an insane amount of money. 13,000 could become easily over 100,000, 200,000 by the time you retire.

I'm not saying we can't do stuff like this, but $13,000 for your current income. I mean, again, the last time you came on the show, you made like $1,000 at that time. What is your current income at the ACA network thing? I mean, not sure. honestly, I would have to... How do you not know what you make? Oh, okay. When did you start?

I started working probably like two months ago at the job. How do you not know what you're making two months? What do you mean? What's your hourly income? Oh, that's what you're saying. Well, first, it's not based on hourly. It's commission days. And so...

Oh. Yeah. And I thought you were asking for like my annual salary. So I really don't know. I have to calculate that. Do you have a salary? No. No, no, it's commission.

I get paid weekly. And it honestly brings in, but it can be anywhere from 300 to 1,000 every week. Okay. So if we averaged it out at like 600, would that feel right? I would say more like 500. Okay. So you make about $2,000 a month. Yeah.

Okay. It's still hard to live on. I mean, that doesn't really get. You're under $30,000 a year. that case. That's a, like, you wouldn't be able to be independent on that. I'm not expecting, like, crazy at 18, but as we're just thinking about direction for life

and what our plans are, you said you want to kind of get some things under control before you throw yourself back in school. Wait, also, you spent practically, practically three-fourths of your annual income on one single trip. Like,

why don't we go to, I understand a lot, a huge thing, but maybe we do smaller networking first, and let's this, to make it make it. It's so expensive for where you are in life. That is crazy. So with this job, the more you grow, the more you learn and the job, the more money. So honestly, with this job, like, there's potential. It's uncapped. I'm still kind of learning, kind of beginning, but the more I go in the company, the more money I can make. I know people in the same company that are making good, good money.

So I'm learning from them, networking, growing, building. And so like I said, this is the beginning to my finance capability. Of course, there's still more things on the side. And then as for the Melanchure, the Melanchure, for me, was 100% worth it. Like I said, it's not just like from a financial standpoint. As well as when I went, it wasn't just for networking. It wasn't just for modeling. I also got to meet people and it was an amazing experience.

I know it was an amazing experience and it feels worth it to you right now. I'm just trying to math it out. Let's just say it was a $5,000 European trip, which wouldn't actually be insane for a European trip. The price that you're saying, crazy. But let's just say $5,000 a European trip. If we're talking about that, you know, one time, you know, I made money and before I start putting my head down, like I would have been okay with that. We're talking 13,000 hours when you make $20,000.

That's insane. That's insane. It's that number specifically. You know, I would have encouraged you to go like a thousand model shows in New York City, which you could afford. You know, with $13,000. You could go there a million, trillion times. So, okay. But the credit cards. Sorry, really quick. I was going to say I did go to New York before I wait to. I'm sure you did. Because it was fascinating. I got invited to New York, Milan, a couple other shows. But I kind of kind of. prioritize and so I did Milan and New York and New York I actually did make more money than I spent I spent like $200 for like a ticket and I was able to get a very very cheap aired movie through a fine so honestly I made I think more than double more than double what I paid I made sir well that's great I mean I obviously encouraged the making money but I'm okay with spending a little bit of money too

depending on your financial situation if your financial situation is the same as last time then obviously I wouldn't encourage it because we had Chase Feeder Marrard $468 a firm, $1,200, another firm that you couldn't figure out the balance of or discussed. 1,600 for another a firm owing to your mom, 700, only to your uncle 500, family friend, 700, another firm, 226, uplift, 297, Amazon 83, price line 167, that you had just paid off, actually, and then something for $793. So all of that together, if your financial situation similar to that, Well, I encourage $13,000 spent.

No, of course not. So let's take a look at where things are today. Okay. I'm not seeing a debt at the top. Yeah, I paid it off. So every single debt there is paid off. Yes. That's incredible.

Well done. When did you pay everything off? I paid them all off at different times. Like I didn't do it all at once. I paid it all the time. So it should say, on the document the day that I paid off the last one or no? When it comes to getting your finances back on track like our reoccurring guests,

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retirement money stay stuck in the past. Take charge of your future today. Big thanks to capitalize for sponsoring this episode. Now, let's get back in. into it. Coming from a checking account, you mean? From, no, from the firm. Some of the, uh, I don't see, but, uh, maybe I'll see as we go through this. So in this checking account, let's... If you're a QuickBooks customer looking to grow your business without the growing pains,

you need the Intuit ERP. Upgrade to Intuit Enterprise Suite in a matter of hours. It's the AI native ERP from the makers of QuickBooks. Learn more at Intuit.com slash ERP. Let's see. We had a balance. It looks like at the startup. $269

and we ended with $2,170 so that's great. Lots of transferring back and forth some Walmart stock are you buying that in here? In that checking account? Yeah, but

that was... Why are you buying individualized stocks? Why are you buying meta stock, meta stock? What are we doing? That was kind of me like experimenting like experimenting and kind of... Why experiment? Why not just do what works? Did you take our investing class?

No, I didn't see it. No, I looked in to... Every damn time. Okay, we're going to get you connected with those classes. Take it. Take it just need to start. We'll identify your investing profile and then what investing strategies are proven

around that investing profile. Okay? Because you're 18, you literally have the best chance to retire as a multimillionaire compared to anyone that's been on the show because you have time on your side. But you need to do it right. You need to start right. And buying individual stocks might not be the play for that.

It's not very diversified. It's very risky. Okay, this is just transferring things. Classing, acting class goal. Okay. Amazon, what am I seeing here? Paid to date? Oh, remaining. Okay, yeah, I saw that one paid off.

Oh, and then the ASAP tickets. That one was paid off. Great. Okay. Very cool. Also, there is no chance of get. Also, there is no reason to get all our finances together. if our house burns down and you die.

So change the battery on that smoke detector. Oh my God. It is beeping on my ears. I'm so sorry. I think I've become like death to you. But yeah. What are all these purchases with stepcom? Step.com?

Is it a Chase account? Yeah. Step is like it's a banking account that's helping you go credit. It's, yeah, it's just like her a second. can you sleep with that thing i honestly i can't hear but again i have your bids in so like the use a noise cast i can always it i can always it cash apping out a lot okay uh we locked your online access to protect you this is from something else what's this letter you sent me oh um my chins

account i don't know if i should talk about it on here but my chase account got hi uh yeah i mean I don't think that's necessarily bad to talk about unless I keep your keep if there's anything crazy, definitely keep a secret. But it got hacked. Okay. So is Chase dealing with us? Dealing with us with me. You said your Chase account got hacked. Yeah.

Like they my account got hacked and I didn't have access to it because I know that I have to say the document this up. So I wasn't able to log into my Chase or anything. I had to call them. And so they emailed the statements instead or not emailed. mailed the statements and that's what I would send me. That's fine. Is Chase dealing with the hack though? Oh, yes, yes. There are, they already. Have you locked your credit? My credit account is fine. The one that was affected was my checking.

Well, yeah, but how'd they get in? Like maybe they know your social security number or something. I would lock your credit. I'll send you information on how to do that afterwards. Okay. This is locking your credit, i.e. them not being able to take out credit. in your name. Yeah. Both you can send me. See, so? Absolutely.

Okay. Um, uh, man, dude, nothing's labeled. What's this? Amazon,

ASAT tickets. Those are some of the, the loans. They're paid. Did you? Another page saying something's paid off. Okay. Well,

that's all I have. Okay. So you're telling me all these, uh, credit cards, the debt to, what about the debt to the family? Oh,

the debt to the family. I feel like that was a little bit of miscommunication. Number one, when I got my first paycheck, I did give my mom and my uncle both. I gave them out of my paycheck. But also, when we, like, when I went back to talk to my uncle, it wasn't something that was like literally you owe me X amount. It was more like, because I have given my uncle money.

And it's not like, okay, I'm giving you $2.50. I expect you to pay you that at Friday, the 2% interest, 5% interest, whatever. It's like, hey, I really need 200. Can you give me 200? Yes, I'll send you 200. Then I really need like 300 kids. So it's not like, like, is everything settled?

Yes. Okay. Okay, perfect. Cool. So how much is in this investing account? Because I didn't see that specifically. Was, it was a thousand. Like I put a thousand into it.

And then it was like when I did end up taking it out. But it was like, thousand. Why did you take it out? I mean, honestly, it didn't seem like it was going to get more than that. And I was thinking more than that. If you're if you're if it it was okay if it wasn't what do you mean the S&P 500 has literally had its best decade this millennium if I'm not mistaken or which S&P 500 in general. Obviously again, if you take the investing class. So, uh, the S&P 500 is up almost like 30% or something crazy. So that would have been like $300 a gain and then it would a compound normally like 10% if it followed historical norms so that 1,300 would gain 10%, then 10%, then 10%, then 10%, then 10%.

This is, it's a time thing. You can't take investments in and out. That needs to be your big thing. Now, first of all, what's in your savings? So you have an emergency fund. I do have numbers. How much? You don't need a screenshot. Just how much is in your emergency fund? $4.09. $409? Yes, for my emergency fund. That's emergency. Like I can't touch that. Yeah, and you spent 14,000 going to Fland when you don't have an emergency fund. Fmilan. You get an emergency fund first.

I need you to save up $10,000 as quick as you can. That's your next thing you're focused on. So, listen, you basically have no expenses and you make $2,000 a month. So, which was kind of the target we were looking to get, $2,500 after taxes would have been ideal, but even $2,000 a month. I'll say, obviously, do that for the next five months. Call it six months after expenses, you know, because you don't really. really have expenses right now. I assure you have gas and stuff, right? But that's pretty much it. Yeah. My phone bill, but it's, yeah, it's not the age. Okay, cool. So let's just call it six,

seven months. Put everything into a high-ield savings account. Get $10,000 because that'll cover once you move out, that'll help cover if, like, you get behind, like, you lose a job or something. You need to pay rent and living expenses and food and groceries. It covers if a car breaks down. it covers if you lose the car and you have to go get a cash car. So there's a lot of different things that you need that $10,000 for and we don't go to Milan until we get that. We don't go on another trip until you have $10,000. This is a basic minimum safety net. Now, once you have that, you can budget in those fun things because here's the fun part.

Any income that comes in to you who doesn't have any needs right now, basically just cover you a little bit of needs, put 20% to investing. Once you've put 20% to investing, you can put the rest of your money wherever you want. You can blow it on anything. I do not care. I need you to hit 20% into investing and go through our investing class to understand what to do with it. So with that, you know, because we don't give recommendations because the legal things around certifications and stuff. You know, just go through the investing class.

With that, once you're hitting 20% forever, you're going to retire a multimillionaire because you have time on your side. Your best wealth building tool is time, but you actually have to be in the market and take advantage of the compound growth and change the battery on that smoke. Dope detector. Okay. I got you. Well, I got me. I need to, yeah. That's what I do.

You need to get that six-month emergency fund, $10,000 in your case. So either six months or $10,000, whatever one is higher. So for you, it's $10,000. And then 20% to investing forever until you're retired, and you can blow your money on whatever else until you have needs. Once you have needs, we try to cap it at about 50%,

but no matter what, you are investing 20%. So if you, if you're, you need more to your needs. Let's say 60% goes to needs. You're still investing 20%, but that only gives you 20% for fun. But you don't take away to put more into fund from investing. You take it from trying to cut your needs.

Not in a dangerous way, but getting a place that's maybe more affordable if it's apartment that's, you know, sucking the needs a little bit more. Okay? Or getting a cheaper phone bill, whatever it is. Those are the things we start dealing with. But we do not take from investing unless we have bad debt and no emergency fund.

You don't have bad debt anymore, but you don't have an emergency fund. So we're not investing yet. We're putting it all into the emergency fun. So that is what you do. Okay. Go ahead. Repeat it. So first step is going to be saved up $10,000 in the emergency fund and then start investing.

20%? Yep. 20% of your income. Every paycheck, 20% goes away to investing. You should start with a Roth IRA. Roth IRA. Write that down. Yeah.

I actually already. There you go. That's perfect. That should get you close to max, I think, on a yearly basis, just about. Any questions? No, not really any questions, but I did have, like, one quick comma. Someone had already told me about getting a Roth IRA account. And so I was trying, like, I looked it up on DPR, and I was trying to sign up.

But do you think it's better to go in person, or is this something that I have to do? No. No. No, you can do whatever. You know, it's easy as online. It's really just opening an account. And what that account does is it's a tax form at the end of the year, essentially, really. But you're going to be paying taxes on the money you're putting in, but it allows to grow it tax-free. So when you do take it out, starting at 59 and a half, you're taking it out without having to pay any taxes. So really, it's just an account that kind of shields you from future taxes. So it's super chill. Honestly,

Fidelity is a great place to do it. You can open one with them as well. Okay. So it's super easy. It takes like two seconds. It's 18. All right. Listen, you're still 18 times on your side. Take advantage of it.

Do not fuck this up. Okay. You can create generational change. Okay. Okay. And last time your hammer financial score, let's see, we had it at a one out of ten. Let's revisit. Budget.

You know, honestly, it wasn't fine. You weren't blowing things too much, at least on this last month, a lawn trip, stupid. But if it was that month, it would have been different. But just looking at this month, it wasn't crazy. Money used to go to the emergency fund, and it's not. So we're going to deduct from there. It's going to be six out of ten.

Debt. There's no debt. 10 out of 10. Well done. Emergency fund, you know, building blocks, one out of 10. Retirement, building blocks. Well, you actually removed everything from retirement, right? Retirement?

You mean my investing? My investing? Yeah. Zero out of 10. Real estate. 0 out of 10. All right, let's see. You've moved up from a 1 to a 3.5 out of 10. Well, done, you're on the right track.

Get that emergency fund up. Literally, if you had that emergency fund right now, if you had the emergency fund right now, you'd be at a 5.5 out of 10. You would have gone up 2 points. So get that taken care of, okay? Got it. And change the battery!