George Kamel - These “Secret” Wealth Hacks Actually Lose Money

Episode Date: March 22, 2024

💵 Sign up for EveryDollar today - Create a free Budget!  I recently saw an article claiming to teach wealth-building secrets. But in reality, most of these “secrets” are actually great ways to lose money. In today’s video, I’ll tell you which of these 10 things are smart money moves and which ones are dumber than a gutter on a boat. Next Steps 📗 Order George Kamel’s new book, Breaking Free From Broke. Watch: How I Went From Broke to Millionaire in Under 10 Years   Offers From Today's Sponsors DeleteMe: This episode is sponsored by DeleteMe. 🔒 Remove your personal information from the web at JoinDeleteMe.com/George and use code GEORGE for 20% off 🙌   🎙️ The Ramsey Show   🍸 Smart Money Happy Hour 💡 The Rachel Cruze Show 💸 The Ramsey Show Highlights 🧠 The Dr. John Delony Show 💼 The Ken Coleman Show 📈 EntreLeadership   Ramsey Solutions Privacy Policy Learn more about your ad choices. Visit megaphone.fm/adchoices

What's up guys, George Camel here, and today we're talking about secret ways to build wealth. This is classified information. Do you ever see people with huge houses and fancy pants cars and wonder how they got all that money? Like maybe rich people know a secret the rest of us don't? Well, a website called Money Talks News posted an article called 10 Secret Ways Americans Build Wealth. So I took a gander at this article and it turns out some of these secrets aren't so secretive and a lot of them are actually a great way to lose money. So in today's video, I'll tell you which of these 10 things are smart money moves and which ones are dumber than a gutter on a dingy. But before we jump in, make sure you like this video, subscribe to the channel, help us hit 200,000, and share this with all of your old friends who love to spill the tea and spread the hot goss about building wealth.

If you don't have those friends, find them. They're really fun. The tea is exceptionally good today. Okay, number one on their list of secret ways Americans build wealth is get a second set of expert eyes. I'm watching you. I love that song. So what they're actually recommending here is working with an investing pro or a financial advisor to help you manage your wealth. And truth be told, out of the gate, I actually agree with them on this one. And they go on to cite a Vanguard study, which found that on average, a hypothetical $500,000

investment over 25 years would grow to $1.7 million if you manage it yourself. Pretty good. But it would be more than $3.4 million if you had worked with a financial. financial advisor. That's legit. Now, of course, there's a pitch here. They're pointing you to a questionnaire that gets you matched up with three vetted financial advisors in your area. And truthfully, at Ramsey, we have our own version of that that I think is a lot better. So I will link that in the comments if you want to connect with a financial advisor to help you manage your wealth. Even if you don't want help picking investments, an advisor can help lower your tax burden, create a comprehensive

financial plan, and help you out with estate planning. And all of that is really important for your long-term wealth building. they tell you to safely lock in 5.5% for the next three years. What are they pitching now? Well, in this case, they are pitching the Gainbridge Steady Pace annuity. And they're saying that you can lock in a guaranteed 5.5% APY. Now, truthfully, those numbers aren't that impressive, considering that my very liquid high-yield savings account offers 5.5% right now.

So what exactly are annuities? Well, it's a contract from an insurance company that promises a stream of income during retirement. So you make a payment or payments to this company, and in return, they promise to grow that money and then send you payments later on in retirement or later on down the line. So my hot take on annuities, that they prey on fears of market risks under the guise of protecting your nest egg. But they're less like a bank vault and more like a prison that you pay to be in. And now, annuities come in a lot of flavors. There's fixed, variable, and indexed.

In this case, they're pitching fixed, which offers a fixed interest rate, typically 5% or less, on your investment for a set period and a fixed income stream. during retirement. Now, what's the issue with fixed annuities? Well, they barely keep up with inflation. 5% isn't great for the long haul. So I'm not a huge fan of this secret way to build wealth. Most of these annuities have massive surrender fees and big commissions. And so because of that, I'm going to tell you to avoid them like dysentery on the Oregon Trail. Um, can we play something else? Next up on their list of secret ways to build wealth. Talk to a free debt coach. What is this debt coach they speak of? Well, it's actually a company

called National Debt Relief. And to call it free is a little misleading. The initial call is free, but the call is just to sell you on a plan that you have to pay for. And the article doesn't make it clear how they plan to relieve you of this debt. So what do you do?

Well, you head over to Reddit, the surprisingly helpful, unregulated armpit of the internet. Sick burn. And we see what we can find out based on real people's experiences with this company. So here's what one Reddit user had to say about National Debt Relief. You owe 35K,

and this company is telling you that you can pay $20,000. 21,600 and be debt-free. The general tactic is for you to stop paying, default on the debt, and then the company negotiates a lower settlement amount on your behalf. It can work, but it trashes your credit and burns your current creditors. It's also not guaranteed. If your debts are current at the moment and you have steady income, your creditors may find

it worthwhile to sue you and garnish your wages instead of accepting the settlement amount. Yikes. So if you really want to build wealth, you do need to get rid of your debt ASAP, but this is not the way to do it. The best way is to pay off your debt, DIY style. You got to do this yourself using the debt snowball method. Don't look to a relief or settlement company to help. If you see those words, run far away. Consider it a stranger danger and call your mom. She'll appreciate it. Mom, can you pick me up? I'm scared. All right, next thing on the list of secret ways Americans build wealth is stop overpaying for car insurance. Oh, they'll try it in true, classic wealth building

secret. Now, to be fair, this is a smart money move. When it comes to car insurance, it's best to use an independent agent or broker who can shop around and find you the best rate. Instead of going with a captive agent that maybe works for a company called, I don't know, let's call them Slate Parm. Not a real company. And to make this easy on you, I'll drop a link below to the one I use in case you want to get a quote and see if you could save some money ensuring that sweet maroon PT cruiser. That's somehow still running, despite all of its flaws. But, I guess. Again, car insurance is not really a secret, and nobody's building wealth through slightly cheaper car insurance.

But it's worth looking into. Next on the list, they tell you to invest in real estate with $10. Okay? That makes sense to me. It's no secret that real estate can be a great way to build wealth when you do it the right way with probably more than $10. So what is this article pointing you to? Well, of course, it's another company that they make money off of called Fundrise.

I get it. Is it kind of like Sunrise? I don't actually get it now that I think about it. It's a really weird name. So Fundrise lets ordinary people with modest amounts of money, i.e. $10, own a piece of lucrative real estate holdings. Wow.

Notice they said a piece. With companies like Fundrise, you're basically pooling your money with other investors to buy into private commercial and residential properties. So if you've always dreamed of owning one-one-thous-of-a-strip mall beside the bojangles, you're in luck. That's all I've ever wanted. But here's the deal.

that $10 may not get you very far because there's an asset management fee, an advisory fee, and possibly other fees. And your investment is not very liquid, meaning you can't just take it out when you want to. And truthfully, nobody's getting rich off a $10 real estate investment, even with a solid tenant like Bojangles and you know they pay their rent on time. Don't sally the good name of Bojangles. So bottom line here, don't invest in anything you don't understand. And if it sounds too good to be true, it probably is.

And if you want to invest in real estate a better way, I recommend working to pay off your primary home first and then finding a rental property that you can pay for in cash. And yes, that's the slow route, but it's a surefire way to build wealth with peace. All right, next on their list, protect your home from unexpected costly repairs. Okay, again, confused as to how this is a wealth building hack, but let's see. What they're trying to sell you on here is a home warranty, which is basically a legalized scam at this point. They're a bigger waste of money than a ticket to the original fire festival.

I mean, at least those people got to be in a Netflix documentary. You don't get to do anything of the sort. What a colossal rip-off. And you don't have to take my word for it, just do a quick search on Reddit for home warranties, and you'll see exactly how shady these companies can be. Besides, that's what your emergency fund and sinking funds are for. You don't need a home warranty

when you've already been putting money aside to cover those repairs. And trust me, home warranties are not a good way to build wealth. They're just a crappy way for someone else to make money. And the chances of you using a home warranty and actually getting some ROI, slim to none. But hey, if you like throwing your money away and arguing with a stranger on the phone

about your hot water heater, home warranties are the way to go. Have fun. Okay, next on the list is Don't waste thousands on car breakdowns. Okay. Well, what they're trying to sell you on here is an auto warranty from a company called Car Shield.

Now, don't be fooled by that beautiful, confusing photo collage of Rick Flair, Ice T, and Vivica A. Fox, which looks like a weird fever dream slash poster for a VH1 reality show that I would 100% watch. Just like home warranties, these auto warranties are completely unnecessary. According to Kelly Blue Book, consumers now spend an average of $548 fixing their cars.

Now, that's not cheap, but if you have an emergency fund or sinking fund for car repairs, which I recommend you do, you can pay for this stuff in cash without having to make monthly payments to some warranty company every month for repairs that you might not ever need. And auto warranties are definitely not a secret wealth-building tool. They're just another crappy way for someone else to make money off of you. And trust me, Car Shield is making plenty of money. They don't need yours.

In fact, they just bought Taylor Swift's old private jet. Google that one later. And speaking of Taylor Swift, you know what the two of us have in common? Almost nothing. But we were both born in the year, 1989, year of our lord. And that's the kind of personal info I'd rather not have on data brokers' websites. And that's why I use Delete Me. Delete Me finds and removes data about you from hundreds of sites,

and they send you an easy-to-read report showing you exactly what they did. And with my special link, you can get a one-year plan for less than $9 a month to help keep your personal info off the web. So go to join deleteme.com slash George today for that 20% off discount or click the link in the description. All right, back to the list of secret ways to build wealth from Money Talks News. Here we go. Protect your loved ones for less. And what they're talking about here is life insurance.

And here's what they say about it. Not everybody needs insurance. If your kids are grown and you have a nice fat bank account, there's really no need. But if your family would have a hard time getting along without you, life insurance is definitely. something you should look into. Again, a rare hearty agreement from me on this one. If someone depends on your income, you need life insurance. Just make sure it's the right kind. I recommend term life insurance instead of the much crappier, much more expensive, whole life insurance. Term life is a fraction of the cost without all of the commissions and fees,

and it does the one thing life insurance is meant to do. Replace your income if you die. And anyone who tells you otherwise that you should use it as some kind of investment vehicle and a cash savings account, they're trying to make money off of you. So while this one is not really a secret way to build wealth, it's still a very smart money move that says, I love you to the people in your life. Way to go, Money Talks News. You did good on this one, mostly.

Golf clap. Okay, next on their list, use this secret source for massive discounts. What is the secret source they're talking about? AARP. And this is not the first time we've mentioned the American Associations of Retired Persons on this YouTube channel.

In order to join, you just need to have a few gray hairs, a landline, and some old Coca-Cola memorabilia. I'm kidding. Calm down, Edna. You dog, I'll see you a bingo night. No cheating this time.

She's always sneaky that one. Watch your mouth, young man. Now, fun fact, you actually don't have to be retirement age to be a member of AARP. It's open to people, persons 18 and older, which I guess is why they're calling this one a secret.

Members can get discounts on things like flies, rental cars, restaurants, and hotels. for as low as $12 per year for the membership. But truthfully, the benefits and discounts, they're not that impressive and definitely won't make you wealthy. So before you sign up, just make sure that it's going to save you more than the membership costs. And by the way, this goes for any membership you might be considering.

You've got to ask yourself, is the juice worth the squeeze? And knowing Edna, not much hand strength going on there, so someone needs to squeeze the juice for her on this one. And then also ask yourself, why are using so many fruit metaphors? Like, what are we trying to do here? Are you getting paid by big fruit? all the weight in at the top. Also, beware, AARP is probably gonna use your data and send you a butt ton of mail and insurance sales pitches,

so consider yourself warned if this thing's worth 12 bucks a year. Next up on their list, get $100 or more for trying fun-free apps. Now, before you get too excited, they're not talking about the chicken wonton tacos at Applebee's here, which I'm happy to talk about, just not right now. We got more important things to do.

Well, that is disappointing. This article is talking about trying smartphone apps, new products, and new offers through a site called Cash Kick. So while it's technically true, don't expect to earn much doing this. It's basically taking surveys and watching videos for minuscule amounts of money. So if you envisioned yourself making it rain Benjamins and buying everyone's wanton tacos at your next girl's night at Applebee's, you might want to reset your expectations,

Brad, because you're not invited. It's not Brad's night. It's girls' night. They don't want you there. In order to make a decent amount of money with this, you'd have to devote your life to Cash Kick, which I don't recommend. Because at that point, you're better off saving your retinas and just getting a part-time job. You might be able to earn a little extra pocket money with this, but it is not a

wealth builder by any means. It's just another way for our friends at Money Talks News to make a little more, you know, money. So there you have it. Some of this stuff is dumber than a two-story outhouse, and of course, it's riddled with affiliate links, which is fine, but these are not secret ways to building wealth. Here's a better way to do it. Subscribe to this YouTube channel for more solid, trustworthy information that can actually help you build wealth. There's nothing secret about it. I don't gatekeep girlies. We don't do that. Not in this house. And if you want to know the right way to build wealth without any secret hacks,

check out this video of how I went from broke to net worth millionaire in under 10 years without even being a member of AARP or owning any Coca-Cola memorabilia. I'll also drop a link in the description below. Thank you guys for watching. We'll see you next time.