George Kamel - Money Expert Reacts to Unhinged Financial TikToks

Episode Date: September 30, 2024

💵 Start your free budget today. Download the EveryDollar app!  Who knew you could learn something on TikTok besides the latest dance challenge? In this video, I’m weighing in on TikToks all about debt—and maybe we’ll learn a dance along the way.  Next Steps:   🎥 Watch my video These People Really Hate My Money Advice.  Connect With Our Sponsors:   🔒 Get 20% off when you join DeleteMe.  💸 Learn more about opening a high-yield savings account with Laurel Road. Member FDIC. Laurel Road is a brand of Keybank NA.  📱 Visit Tello for more details.  Explore More From Ramsey Network:  🎙️ The Ramsey Show    🍸 Smart Money Happy Hour  💸 The Ramsey Show Highlights  🧠 The Dr. John Delony Show  💡 The Rachel Cruze Show  💼 The Ken Coleman Show  📈 EntreLeadership    Ramsey Solutions Privacy Policy  Learn more about your ad choices. Visit megaphone.fm/adchoices

Oh, sorry about that. Got lost in the talk. No clue why my algorithm is stuck on this trend, but I'm not mad about it. And hey, while I got you here, I've got some content I saved that I wanted you to see. And the common theme is everyone's not-so-favorit four-letter D word. Debt. And you already know, I won't be keeping my opinions about these TikToks to myself. I'm keeping them to you.

Some things are better left unsaid and leave it at that. So keep watching because this is going to be full of adversity, controversy, and Jen's ears and swooshy sweatsuits. Don't know why that's a thing. Also here for it. It looks very cozy. But before the Doom Scroll begins, hit that like and subscribe button while I finish this amazing video. Good morning pineapple.

Looking very good, very nice. Send this to your good morning pineapple. Don't know what it means. All right, let's get to it. If you're in your 20s and you keep consistently seeing people and you like, oh my God, how are they doing all this, how are they affording all of this, blah, blah, and you're really confused and you're trying to figure it out is really one. of two, maybe even three options. The first option is credit card debt. Maybe they swipe in them

cards. They're swiping that card. They probably have $30,000 right now in credit card debt. But they're in Bora Bora. Absolutely. The second is rich parents. Don't ever underestimate the power of a rich parent. The third is they might be scamming. They might, might, might. Small might. And then the fourth, absolute and final is that they're really just getting to the money. But that's a very low on a total poll, it's probably credit card debt. I love Sierra's honesty, and I love her username Sierra likes eggs. I think it's important to make it clear what you're about, and she does that very well here. And I love her take here.

You see all these people doing all this stuff, buying all the stuff. You don't know what's actually going on behind the scenes, all right? They might be swiping their life away into debt. And you know what I say, swipe or no swiping. Swiper, no swiping. Don't try to keep up with the Joneses. The Joneses are broke. And if you act like everyone else, you're going to get what everyone else is getting,

which is debt and stress and living paycheck to paycheck, which is 78% of Americans, by the way. That means eight out of 10 people can't afford the home they're living in or the car they're driving. They might not even have the cash to cover the next emergency that pops up. So it pays to be weird and it pays to see through all that crap and go, you know what? Regardless of what everyone else is doing,

I'm going to run my own race, and I don't want to be normal because normal is broke. And I'm from here. I want to read some of the comments here because the comment section is really where the party is at. Monique said, yes, last year I broke up with my boyfriend, moved and went on a chill family vacation, my dog got sick, and boom, suddenly $4,000 in credit card debt. It's silent. Nobody would know if I didn't say anything. That's true. You never see people bragging about their money problems. They're always bragging about the trip they took, the car they just bought, and never about what's really going on in their life.

Jessica said, I was so jealous of my co-worker getting her tattoos, facials, and nails done routinely and monthly. Like, we make the same amount. She said she puts it all. on her credit cards and is $14,000 in credit card debt. Y'all, we're talking like 22% interest on that 14 grand. This is why people stay in this cycle. Sunshine said, mine is credit card debt, laughing emoji, 26K. Nothing to laugh at. Continues on with, I'm paying it down now,

but I be shopping and traveling real bad, LOL. I got two trips coming up using after pay and uplift. You really just need income. Sunshine, you need to stop making terrible life decisions. That's what you need. Income is not the problem here. It's the outgo. Let's stop.

Stop. He's not wrong. Moving on. Imagine being me. Okay. And your credit card payment is due today. The minimum payment that you can make is $165. There's only $100 in your personal checking account.

You don't have a personal savings account right now. You have to go to your business bank account to withdraw money to make your minimum credit card payment. And you're 30 years old. And still believing that you're going to be the person. who creates generational wealth for you and your family. Wow. The Zoom in, said it all. Cool, rich aunt.

I don't know how rich you actually are if you're this broke with $100 in your account. I might change your username just to be a little more honest. Like Sierra, she told us she likes eggs. That's honesty. And it sounds like, number one, you love rock climbing. I don't know what the outfit is or where you're going,

but it's a choice, and it's a choice you made. Just like the choice you made to stay in this paycheck-to-paycheck cycle, where you're going, all right, I got to make the minimum payment. I don't have enough to make the minimum payment, so I'm going to go further into debt to make them an unpayment. The key to breaking the cycle is to spend less than you make.

And you said you had a business account. I hope your business is doing well. And if it is, use that income wisely and put it into your budget. That is the key to living on less than you make. You list out your income, list out your expenses. Income minus expenses needs to equal zero, meaning you gave every single dollar a job. And if you're in debt, the job of your income,

beyond your basic expenses, is to tackle that debt. So remember, income doesn't make it. you wealthy, how you handle it does. All right, let's keep watching videos while you watch this video. baby. I dance my problems away. You should do. Ha! Woo! One, two. Oh!

They're just dancing away. They don't care. Dancing away. Jason Rodello. Jason Rodello! I love this guy's energy. I love his moves. And I hope you can tell that this is sarcasm, from what I can tell. It's also amazing dance moves. Put this guy in the Olympic rake dancing. He could have taken down Raygun like nothing.

Was that, is that a kangaroo reference, Ronnie? This is the dream. Can I just say for any guy, this is the friend group you want. To get matching sweatsuits, learn the routine, and then nail it. No crumbs. No crumbs. This is incredible. So let's put this into perspective. I doubt he is telling the truth. He's probably making a joke about his 175 grand in debt. But let's make it a wild example. Let's say you have $195,000 in student loan debt and that you're on 20-year payment plan with a 6% interest rate. If you didn't make any extra payments, your monthly payment to stay on track with a 20-year timeline would still be about $1,400. And by the time you're in your mid-40s, and you pay it off, you'll have paid over 335 grand,

which is over $140,000 in interest alone. And let's just for fun say you never took out loans and instead invested that $1,400. Well, after 20 years, assuming a 10% rate of return, you'd have close to a million dollars in an investment account instead of having paid way too much for a degree. But that being said, I just want to keep watching this video. You can dance. I think I'm going to go with dance. Dear one, you want to date, baby.

I'd like this. My dad's my phone. You got it. Dear God, don't quit your day job. Now, before that song gets stuck in your head, it is time for my regularly scheduled intervention, but how much money you're shelling out for your phone plan. You do not have to keep paying out the wazoo for your phone bill anymore,

thanks in part to the mobile service provider, Tello, a sponsor of today's episode. And that's because Tello is all about giving you big savings without sacrificing quality and coverage. Their plans start as low as $5 a month, and all the way up to $25 a month for the unlimited everything but the bagel plan. They've also got really cheap international roaming too,

so you can stay connected no matter where life takes you. And right now, you can get five bucks off your first month of unlimited everything by heading to tello.com slash George or click the link below in the description. Don't miss out. And while we're at it, let's knock out my cyber safety intervention. Real question, do you know how many people

have your personal info online? Didn't think so. And that's why I want you to check out, delete me. If your information's floating around out there, delete me, will find it and delete it from hundreds of these terrible, horrible, no good, very bad data broker websites. And that way, scammers and spammers can't get their grubby little hands on it.

That's just, I imagine, that scammers have grubby hands. Could be wrong, open to new information about their hygiene. Oh, and Delete Me even sends you a full report detailing what they did and what they deleted from where. And right now, you can get 20% off by going to join DeleteMe.com slash George or click the link in the description. I'm done intervening. I know what I said, and I'm trademarking it.

For this next TikTok, we're swerving a bit on the highway of consumer debt and paying some homage to the auto loan. Let's check this one out. You know how mortgages let people buy houses they can't afford? Hmm? Think about doing that for cars. Like, loans for cars you can't afford? Yeah.

But no one's going to want to borrow to buy an appreciating asset. I think they might. Well, the loans would have to be dirt cheap. See, I was thinking about making them expensive, like more expensive than a mortgage. Right, nobody's going to go for that. I got a feeling that by 2024, Americans alone will owe 1.6. $6 trillion in car debt. That's real talk. Really? So let me get this straight. If I wanted to buy a Mercedes with a loan, it'd end up costing me like $75,000. But if I saved up, it might cost me like

$50,000. Saved up. What are you, six years old? Do you want a new car? I do. Chris Kohler just nailed it on that. And I don't know if it's the Australian accent, but he's just so darn charming. And go with me here on this whole car payment is bogus thing. And let's pretend you decided to buy a car in cash that you could actually afford like today. It might not be the lady killer, but let's say you bought a cheaper car, nothing fancy, to get around for 10 months. And let's say you save 500 bucks every month instead of spending that on a car payment. After 10 months, you'll have saved $5,000. Add that to the $2,000 you can get for your old beater car,

and now you have $7,000 to buy a better new-to-you car with cash. You see how this works? You're upgrading your car over time in cash without owning the bank a dime and interest. And if you keep consistently putting the same amount of money away, 10 months later, you have another 5K to put toward a car, and the cycle keeps going. And this is exactly what I did. Not long ago, I bought a old Honda Civic in 2009, and I bought it in 2017 for $6 grand. And once I saved up more, I upgraded in vehicle.

And then I upgraded in vehicle, always in cash, and always a used reliable vehicle. That's how to do it. That is the path to building wealth instead of being part of this terrible $1.7 trillion nightmare that we face. Also, I wish I had an Australian accent. You would all find me much more charming, and I'd have more subscribers. Jealous much. All right, let's get to our final talk. See what we got.

This is my favorite way to get out of debt fast. This is the exact method that my husband and I used to pay off over $65,000 in debt in less than two years. And now we've been able to spend the last year making our money go to work for us and watching it grow and grow and grow. This method is called the debt avalanche. Now you may have heard of the debt snowball where you pay off your debts from smallest to largest, but there's a big flaw in that method that no one talks about. I absolutely hate paying interest and this is where the avalanche has the snowball beat. What you're going to do is organize your debt

from largest to smallest by interest rate, not by loan amount. Every month you're going to pay minimum payments on everything except for the debt with the largest interest rate. That's the loan that's costing you the most in interest every month. We want to get her out of the way as fast as we can because the longer she sticks around, the more money you're spending on interest. Throw every dollar you can squeeze out of your budget at that very first high interest debt. And once that first debt is paid off, take everything you were paying for that first debt and apply it to the second debt.

Then once those two debts are paid off, take both those payments and apply apply it to the third debt. And you will see the avalanche quickly build and wipe out all the rest. Can I just say, Beconomics, what a lovely person. Very nice, very calming, like a human Xanax. I feel calmer just watching that video.

And at least we found someone who actually wants to get rid of your debt. And here's the deal. She's talking about the avalanche method focusing on highest interest first. And truthfully, if she hated interest so much, she wouldn't have gone into debt. Oh, roasted, sick burn.

But really, it's not about interest here. What got us into debt was behavior and habits. So that's what the debt snowball does for you, paying off the smallest balance first instead of the one with the biggest interest rate. Here's what happens. You knock out the small one first.

Happens real fast. You free up a payment. Your brain goes, ooh, that felt good. Psychological win. Let's get some momentum. You free up that payment. Now we can roll it into the next smallest debt. That happens fast too.

Now we're gaining some steam and that's what causes people to actually get out of debt. So while I'm not angry at the avalanche method, it's just that most people never actually get out of debt, they end up falling off the wagon because sometimes that biggest debt with the biggest interest rate is the hardest one to tackle. So make minimum payments on all of your debts except the smallest one and attack that small one with a vengeance with all of the

margin, extra income, selling stuff, all of that. And when that bill gets paid, you move to the next one. That's how it works. And the debt snowball gives you the motivation, and that's the secret sauce to getting out of debt faster. It's the same way I got out of 40 grand in debt in 18 months. Impressive. All right, I'm getting a passive-aggressive reminder that I've been looking at TikTok for far too long, so we've got to wrap it for today. But if you see any other videos you want my genuine take-on, DM me on Instagram or Twitter at George Camel with a K with a link to said video.

Love seeing what you guys send me. I got to say, though, some people don't like my genuine take on things, and they use the comment section to let me know. So watch this next video to see me monetize the haters and finally respond to the comment section trolls once and for all. Or click the link in the description below. Thanks for watching. We'll see you next time.