George Kamel - The Worst Money Advice Your Parents Gave You

Episode Date: November 29, 2023

Ever realize that some of the things your parents taught you weren’t quite right? Yeah, me too. That’s why I asked you guys what parental money advice you were given that turned out to be a bad idea. Links:  This episode is brought to you by BetterHelp. Give online therapy a try at https://www.betterhelp.com/george and get on your way to being your best self. Preorder George Kamel’s new book, Breaking Free From Broke, and get more than $100 in FREE bonus items.  Universal Life Insurance? More like a universal LIE: Watch Here Learn more about your ad choices. Visit megaphone.fm/adchoices

You know, when you get older and wiser and ruggedly more handsome as I have, you realize some of the things your parents told you weren't exactly right. Turns out, the car can physically start without everyone getting buckled in. Your eyes won't get stuck from crossing them too much. The ice cream truck doesn't only play music when it's out of ice cream. And some of the financial advice they gave us was a load of crock. I think my parents told me that too. Who says low to crook other than old people?

Watch it, Wiggie. I ain't no stinking crock. I mean, my parents, God bless them, immigrated to the states from the Middle East and fell for all sorts of shiny new American financial traps. So us kids did the same. And in all fairness, they were just doing the best they could, like most of your parents. But that doesn't mean they got it all right. So I recently asked all of you what money advice your parents gave you

that turned out to be bad advice. And man, did you guys deliver the gold, or at least the bronze. You lose! Good day, sir! So today, we're looking at your own misguided financial advice stories. But first, I'm dedicating every like and subscribe on this video to the OG Camels, May and Max. So help me make my parents proud and convince them I have friends.

My mom watches every episode. Love you, Mom. I know I missed that call. I'll get it back to you. I'm busy. I'm working, mom. Plus, while you're at it, make your parents proud by sharing this video with them. They love it when you watch family-friendly content.

All right, let's get to the advice. They told me to buy the most expensive house I could qualify for, because according to them, even if I can't afford it and retire with a mortgage, quote, I still got to live in it all these years. Here's the problem. The bank is always happy to loan you way more. more money than should be legally possible. And what do you do? You go, well, the bank said I could take out a $500,000 mortgage. They know better than I do what I can afford. Wrong. So here's what you need

to do. Your mortgage payment should be no more than 25% of your take-home pay. That will help dictate how much house you can get, how much down payment you need. And by the way, always stick to a 15-year fixed rate. Because if you've seen our boomer parents, they're still paying off mortgages 30-plus years later because they did 30-year loans, they're doing heli locks, they're doing second mortgages, avoid all of that. I want you to retire with dignity, not with debt. No dignity, no dare. Huh? Next up, KMC-1316 said, my mom filled out a credit card application for me

without even asking right after my 18th birthday. Maybe she thought she was helping. I've been in debt for the last 20 years, basically. Oh, gosh. Yes, this is a... This comes from the idea that parents are like, well, you've got to have a credit card because you've got to get your credit score up because that's how you're going to be financially successful.

Except that, All of that just shows your relationship with debt. That's all your credit score does. That's all credit cards do. And you can buy the same stuff with a debit card. Here's another trend I've been saying that's frightening. Parents are adding their children as authorized users on their credit card at three years old so that once they're 18, they can have great credit.

They'll be blessing them with this amazing credit score. Except that most parents end up screwing up their kids' credit accidentally, and now their kids have a mess to clean up as they enter adulthood. So parents, stop telling your kid to get a credit card. instead, show them how to use a debit card and cash responsibly. You let them live their lives, or adults for God's sake. K.ember said, quote, be sure you can afford your monthly credit card payments, rather than, quote, be sure you can afford what you buy and pay for it outright. She gets it.

And apparently, the idea that you can just afford the payment is wise financial advice. I don't buy it. That's all about debt management, not money management. So never think about things in terms of affording the payment. Think about if you can afford it straight up. And if it's not in the budget, you can't pay cash for it, it's not a no forever. It's just a not now. That's called being an adult and having something called delayed gratification. Only toddlers go, I want it now. I got to pay for it now in my car. No, wait until you can actually pay for it and you've really earned it versus thinking I deserve it and I can afford the payment. That's broke people mentality and it will keep you middle class fancy.

Upper middle class. All right, next up, Kimber 9758. Back in 1989, they told me not to listen of George Camel in 2023. I knew they were wrong. He's the best. Thank you. What a sweet soul that your parents somehow knew me when I was a newborn and was like, this guy's going to grow up and be a YouTuber one day. Don't listen to him.

He's full of crock. I don't even know what a crock is, but I'm definitely not full of it. All right, moving on. Irish QT-07. My grandparents raised me after my parents divorced. My grandma taught me how to, quote, Rob Peter to pay Paul with my bills. It has gotten mean to trouble more than.

once. All right, best username of the day by far. And if you don't know the phrase Rob Peter to pay Paul in the money world, it basically means I'm going to pay off one debt using another form of debt thinking I've actually done something. This is a really bad plan. And we see it all the time, people taking out a he lock to pay off the car. People paying off one credit card with a 0% credit card to try to move the debt around, doing debt consolidation to think you've done something. All of these are bad plans. Instead, use the debt snowball, list your debt smallest to largest and then start attacking the little one with a vengeance while paying minimums on the rest. That's a surefire way to get out of debt once and for all instead of

robbing Peter to pay Paul. I'm a poet and I didn't even know. George, stop. All right, before we get to the next one, let's take a 53 second break for a quick word about this episode's sponsor. This episode is sponsored by BetterHelp. Hey guys, it's George, you knew that. Sometimes this time of year can get a little rough. The sun goes down sooner. You don't know whether it wear long sleeves or short sleeves, and if you don't like pumpkin spice, well, you're just praying for peppermint season to get here. You see, it's rough. But seriously, though, if you struggle with seasonal blues and not the kind with an A7 cord, it's natural to feel some sadness or anxiety about it. And that's okay. A lot of people get down this time of year, but adding something positive to your routine can help counteract some of

those feelings. Therapy can be a bright spot in all of the stress and change, something to look forward to, to make you feel grounded, and to give you tools to manage those feelings. So if you're thinking of starting therapy, give BetterHelp a try. BetterHelp is flexible because it's online so it can fit your schedule. Just fill out a brief questionnaire to get matched with a licensed therapist, and you can switch therapists at any time for no extra charge. So find your bright spot this season with our friends at BetterHelp. Visit betterhelp.com slash George today to get 10% off your first month.

That's betterhelp.com slash George. All right, let's get back to it. All right, we're back with more bad financial advice from parents. Save money, but don't invest it because you're going to lose it. What? Okay, let me try to gather what his parents were saying here. Save money in a savings account. Don't invest the money because there's more risk with investing than saving. I understand the principle. Here's one problem, inflation. Inflation will eat away at your savings, and if you only save and you never invest, you'll never have the power of compound growth working for you by investing in the stock market. The other thing is, there is a spectrum of risky investments. One version of this is single stocks and gold and crypto.

which has a lot of risk to it. The other is mutual funds and index funds in your 401k and IRA. These are much safer bets, and we've seen the S&P 500, which represents the U.S. stock market, grow at a rate of about 10 to 12% annually every single year. So there's a right way to invest, there's a wrong way to invest, but sorry, parents, don't just tell your kids to save in a savings account because they'll never retire, and then they'll have to live with you. Please no!

All right, up next, Hillary Whale, 1114 said this. Her parents told her to get a credit card to build credit, but make sure to pay it off every month. This one is exhausting. Let's walk through this. Why do you need a credit score to get debt? What does going into debt do? Well, it could help your credit score.

That tells me the system is stupid and broken and that the credit score is just an I love debt score. Christian 5254 said, Just buy a new car. It's more reliable. You'll always have a car payment. This one grinds my car gears, y'all. You're really starting to marsh my mellow.

Here's the thing. People assume that new cars are so much more reliable, but really they just buy it to justify their ego and their little security gland that's flaring. Old cars can be just as reliable, too. With the proper maintenance and the proper vehicle history report, you can know that this vehicle is going to get you 100,000, 200,000 miles, or more. I'm going to skip the username on this one to protect them,

but her parents said, they taught me to change my birth date on a credit card application so I could acquire credit before I turned 18. That's called fraud. There's advice, and then there's some. helping your kids commit crimes. I'm going to go full yikes on that one. Hard pass. Up next, the Kelson Morris. Her parents said, there's no need to invest because you'll have a work pension. Okay, that's a giant assumption. We all know pensions have gone the way of the dinosaur,

for the most part, and it's increasingly rare to have a pension as part of your employment. And the percentage of private employers that offered traditional pensions fell from 35% in the early 90s to 15% in 2022, according to the Bureau of Labor Statistics. On the other hand, about 86% of the of government workers have access to a pension. So unless you're in the government sector, you probably don't have a pension. And by the way, pension's kind of suck because you have no control over the investments. You don't really know what's going on there. And they can kind of just go away.

So that's kind of frightening too. All right, I'm all about poking some fun here. But for those of you who never learn the right way to manage your money and build wealth, it's not too late for you. And for those of you who still thinks it takes seven years to digest your gum, it's not too late for you either. Just keep chewing. Listen, you can 100% change your family tree and leave a legacy for your

your loved ones. Personally, I'm going bonsai for my tree. I like those. Banzi! You see, for me, it started 10 years ago when I was sick and tired of being a slave to debt. I took a money course called Financial Peace University, and that changed everything. And I still use the same money advice I learned in that class today. Which, how many classes can you say that about? And I mean, when was the last time the quadratic formula helped your life? Well, formulas are my formula for Mula.

And here's the good news. In my new book, Breaking Free from Broke, I've distilled 10 years of following this plan for you to deprogram all the bad money advice you've been taught over the years. And I break down the actual truth about credit scores, credit cards, car loans, student loans, mortgages, and investing traps, all so that you can finally get ahead with money and have more money and less stress. If you want to check it out, it's on pre-sale now. You can get a hard copy for just 20 bucks, plus it comes with $100 worth of goodies and bonuses to sweeten the deal, like the audiobook, e-book, and more. I'll drop a link below if you want to get a copy. Be sure to let me know in the comments what advice your parents gave you that,

in retrospect had its faults. And share this video with the new parents in your life, along with a casserole. As a new parent myself, we need all the castroles we can get. As always, thanks for watching. We'll see you next time.