George Kamel - "We Will Never Agree On THIS" | Agree to Disagree with Caleb Hammer

Episode Date: September 6, 2024

💵Start your free budget today. Download the EveryDollar app!    In this video, I’m hanging out in Caleb Hammer’s studio for a friendly game we like to call “Agree to Disagree.” You’ll get our hot takes on money topics—and maybe even witness a tussle.    Next Steps:  📗 Order George Kamel’s new book, Breaking Free From Broke.  🎥 Watch my video “Agree to Disagree | The @MinorityMindset & Humphrey Yang (@humphrey)”     Connect With Our Sponsors:  This episode is sponsored by DeleteMe. 🔒 Remove your personal information from the web at https://joindeleteme.com/george and use code GEORGE for 20% off. 🙌     This episode is also sponsored by Laurel Road. 💸 Open a high-yield savings account and make your savings work harder for you. Check it out here: https://www.laurelroad.com/george  This episode is sponsored by Tello, a mobile service plan designed to save you money. Go to https://www.tello.com/George for $5 off your first month of Tello’s unlimited data plan.    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

What's up, guys, George Camel here, and here is different today, because I am not in my studio, if you can tell, and I'll give you a hint as to where I am. Caleb Hammer. That's a pretty good hint. And if you don't know who Caleb is, you do. Caleb is a super popular content creator. You know his financial audit YouTube channel with well over a million subscribers, and it's where he dishes out some gentle, affirming, even tender love, some might call it, to his guests who are experiencing some financial despair. Fair? Very fair.

Very kind. Some have called them the Mr. Rogers of Finance. How have you had enough time to be as stupid as this pile of debt suggests? And there's a lot we agree on when it comes to money, but there's also things we don't agree on. And so today, back by popular demand, it is the segment. Agree to disagree. I don't agree to that. Neither do I.

But before we get started, let's agree to hit those like and subscribe buttons because I got some catching up to do to this guy. And it's going to take years. So, do us a favor. Caleb, welcome. Thank you. Thanks for having me. Is it fun to be a guest in your own studio? It is, yeah. Except you're on the guest side, so I still feel like the boss here. Was it a power move?

Yes. How come you get the aquarium plants in the back? You've got to ask your crew. What do I have? A singular plant? Single plant. Thriving, though. It's a beautiful... Is that real? Oh, it's real. That's gorgeous.

All day, baby. Just gorgeous. Well, we're going to play Agree to Disagree Headlines Edition. So here's how it works. I'm going to read a headline. We're going to hold up our little thingies here. If you agree, green to your camera. and if it's red

there we go it's like pickleball but less athleticism and so we're going to hold those up to see do we agree or disagree with the spirit of these headlines and the implication and then we vigorously debate them

I wouldn't say vigorous although I do feel like you would have done great in debate club okay were you ever in a debate club no I'm a flubber I can't do like half the words really? Oh yeah so you think you'd stumble on a court of law

I am a flubmaster. I don't know if that means what you think it means. I don't know what it means. Okay, we'll let the audience decide. I don't get it either. Here's our first headline from Business Insider. Legalized sports betting is wrecking young men's financial futures. So, agree or disagree, is sports betting ruining young men's futures?

We're off to a great start. I hate this, though. I hate this. I know you do. You hate the black and white. Yeah, it's too black and white. Because I think if people want to gamble, Whose house are we in?

I'm sorry, we're filming at my studio. If people want to gamble, they should obviously be able to gamble. I think for some people that are obviously younger, more impressionable, brains not fully developed. Obviously, if they head into something that can be more addictive,

there's obviously, you know, higher chances of risk there. So for those that have their life ruined for them, yes, I agree that their life was probably ruined for it. It doesn't mean I think it should be in a legal industry. Well, this goes back to our conversation we've had, which is the majority of people will not do well with something like this.

Sure. There's a small amount. But the majority addicted, though. That's the thing, because that's where I start becoming concerned. If someone loses five bucks because they had five bucks of fun money. No one's financial futures wrecked over five bucks. But I think what we're seeing is a trend where more and more people, it's become socialized, it's become normalized. We're like, yeah, it's a little money here, a little money there. And all of a sudden, you kind of look up and you go, I'm glued to this app and the next. trade and the next trade. Yeah. You know, because now you can bet on the little tiny minutiaes of the game. Video games, too. Lute crates, EA. You want to get the next skin, all that stuff. You're putting money in. You're kind of gambling that as well. It's the same psychology that they're tapping into, and that's what personally worries me. Yes. So is it wrecking everyone's futures?

No, but for those that do it, I don't think it's a healthy habit to be regularly. That's why I'm agreeing, but with a little softness on it. All right. Next headline, this one's going to really butter your biscuits. Market Watch. A $100,000 salary no longer buys you a middle class lifestyle. So here's the question.

Is $100,000 income middle class? I'm going to go, basically, can you still have a good life making $100,000? I'm going to say, yes, you can have a good life. I'm in the middle. You're in the middle.

Yeah, if you're in L.A., New York City, probably not. Location matters. Location matters. So high-cost living. $100,000 in L.A., you're going to. be struggling. Yeah, San Francisco, New York City, Boston, it's going to be harder. But if you're in

Kalamazoo, because you make it one? Calamazoo, Michigan, you'd be doing pretty okay. You'd certainly be above the, I mean, the median household income in the United States is 74,000, right? Household. So if you're, if you as just one person is making $100,000 a year, I'd still. You're well above the media. Yeah, middle class, definitely solid middle class. And then obviously... It feels like a squishy thing to even say middle class. It's like if you're not in poverty and you're not the ultra wealthy, you're a middle class, which is most people. Yeah, I wish I knew the definition off the top of my head. But even with the definition, it still feels squishy.

But can you make it work on $100,000? I say yes, especially if you don't have debt. It's a very different ball game. If you're stacked up your eyeballs with debt, you can make $150,000 and we broke. And you've talked to some of those folks. If your risk profile is lower, you can properly budget. On a budget, no debt, you're doing okay with $100,000 in most places. No bad debt?

Don't even get me started. There we go. Get your popcorn ready. headline also from MarketWatch. Here's the headline. I retired comfortably on $100,000, so it's not a myth if you can handle the risk. So here's what this is saying.

Can you retire comfortably on a total nest egg of $100,000? We both disagree that that's... I would love to hear their analysis behind that, but... Well, I remember reading the article, and they were saying they're going to live off $1,300 a month, which is about $15,000 a year. which is still about 15% of that nest egg every year, which feels like a very high withdrawal rate.

Wow, okay. That's interesting. Plus inflation, 3%. Yeah, they're just, I don't know that you could perpetually live off of 1,300, even with very little bills and payments in your life, because things are going to get more expensive. Property taxes will go up.

So even without a mortgage payment, this feels, that feels real thin. That's intense, yeah. You might be able to do it for a few years, but for a 10, 20, 30, or retirement. No dice. Okay, we're off to a good start so far. I will say a lot of common ground here. Let's see if we veer off the track. MSN, here's the headline. Good debt makes you rich. Robert Kiyosaki and Ken McElroy are sitting on a combined $2 billion in debt, but they're not worried. Here's how borrowing can supercharge your wealth. So here's the question, agree or disagree. Does good debt make you rich? I'm sorry.

You're halfway. Yeah. I'm sorry. I'm bad at this game because that's such a, that's such a like assignment. That's such a 100% of time. That's what headlines do. You can do good debt bad. You can be leveraged up to your eyeballs and just be stupid and have no sense of risk and just get completely.

So no good debt does not get you rich. You can use proper leverage in certain ways that can accelerate you there quicker. It's true. But this strategy, you know, would you subscribe to the Kiyosaki method of leverage as much debt as you can. As much as you can, my risk profile wouldn't cover that personally. But obviously some people do do it successfully.

He's not a successfully. Combining $2 billion in debt, that's pretty serious. Sure, but what is his overall, you know, assets? What are they worth? Because if he's $2 billion in debt, but he has $10 billion to assets, like, I'm just like, okay. Okay, next one from CNAP money. Today's American Dream is renting,

not buying. Not a lot of context there. Today's American Dream is renting, not buying. Is this what people dream of? Are more and more people, I guess, gravitating towards renting as a positive thing? I don't think that's true. I can see the mindset behind it. I'm going to go disagree from what I've seen.

No one's going, I'm just dreaming of renting the rest of my life. Yeah, that's fair. The only reason I'm going to give a agree is because right now, it makes much more sense mathematically to rent than own today with, you know, record home sale price last month, interest rate's still quite high. You know, a lot of people they value being able to move pretty much anyway. Now you can break a lease, hard to break a mortgage. You can break a lease, even if you don't, you know, after a year, you'd have to sell the house. You go somewhere else, exactly. And if you want to sell the house within a couple years of buying it, you're likely going to be at a loss.

Actually, at this moment, you might get to the American dream a little quicker if you're renting now. At some point, if you want to be a homeowner, absolutely encourage it. Love it. I support it. I love real estate myself. But renting's pretty darn okay. Five years from now, who knows? Maybe it'll be flipped, but right now.

Well, my take is long term. If you look at your whole financial future, I think it's better to own something and reduce one of your biggest fixed expenses, which is your rent or mortgage. And so owning a house helps you get there. And, you know, rent, we know will go up over time. So will your expenses with a home. And but I do think there's, there's merit to the fact that people are going, you know what, I'm okay being more flexible and nimble right now, not having to worry about that. I'm trying to get my financial house in order, get my foundation set up, get out of debt. So I think it's wise. I think renting buys patience. And as you build that financial foundation,

get out of debt, get an emergency fund, get a down payment, it's a great thing to do. This one, I don't know how you feel about this. Inc.com. Donald Trump supports a U.S. Bitcoin stockpile. Economists aren't convinced. So here's the question. Agree or disagree. Is it wise for the U.S. to have a large stockpile of Bitcoin?

Is it wise to do this? Would I support a Bitcoin stockpile? I'm going to disagree. I don't like this. And it has nothing to do with hate against crypto. I'm going to disagree, but I'm also going to, confess my ignorance on it and say that I'm not really educated enough to have a good opinion. Okay.

On that one. Here's my take. Did you see RFK? He did a speech at the Bitcoin conference. And he said, I want the U.S. government, when I'm in office, we're going to buy 550 Bitcoin a day until we get to 4 million Bitcoin, which is about 20% of total Bitcoin. I did the math. And I'm going, okay, buying 550 Bitcoin a day at today's rate, that's like $38 million.

But where's this money coming from? It's taxpayer money. Sure. So we're just going to go probably further into the deficit with taxpayer money to buy Bitcoin. That don't make no chance. Honestly, in general, when it comes to crypto, I mean, I've just, I found my path of wealth and success of building business, investing in real estate, and my low-cost index funds. So honestly, I'm just really not interested in that world.

So I haven't cared enough to become as educated on it as I, as someone would want me to be. I just honestly don't give... I really don't. Yeah, I feel the same way. I'm comfortable with where my investments are at. I don't feel the need to diversify any further into alternative, you know, investments. So I think we're on the same boat here, except I don't have any crypto. I'm more looking at my own house.

I'm like, will I have millions in retirement when I get there? Yes, I'm fine with that. Oh, ladies, he's rich. In retirement. Also, married. Hey, Whitney. So cute. It's like too cute almost.

All right, here's our last official headline. This one's from Gallup. Americans continue to name inflation as top financial problem. Here's the question, agree or disagree, is inflation really what's hurting Americans' wall it's the most? We're almost like 10 for 10 here. For me, inflation, you know, we're sitting at 3%. Some metrics that are showing even less than 3%.

So right now, no. Wages increased 3.5% year over year this last month, and inflation is below that. So technically now wages have technically, for our... a month, a month, don't freak out, I know, because the moment you say this, people are going to freak out. But, mathematically. The overall wages going up or down, that doesn't necessarily reflect on your personal income. Of course. And then I would obviously just say, I mean, I see the spending habits of people on the show all the time. We know where consumer debt is. If inflation was at 9% even still, I don't think that's going to be the biggest determining factor when someone has

$50,000 and 30% credit card debt. Can I show you a poll that I recently did on my YouTube community because it's it kind of ties into this. It's a reliable scientific service. Probably 12,000 people. That's statistically significant. Here was the poll that I did. This is one day ago, as of this recording. I said, what's the number one thing holding you back financially? I said, is it debt? Is it your lifestyle? Is it inflation slash the economy? Is it your income or is it kids? What do you think the number one answer was for what's holding them back financially? They probably said inflation, right?

That was number two. Wow. Okay. Guess what number one? What? Which one? Income. Oh, interesting. Their income is the number one thing holding them back financially. It always feels like you never have enough. I feel like that's kind of like just human psychology.

If I made more money, I'd be better off financially. And we know from reality that that's not always the case. The more you make, the more you spend. Lifestyle creep. That's real. And so what we were just talking about is really that debt and lifestyle are way bigger factors. Yeah. As far as how we're doing financially what's holding us back versus inflation or even our income.

Would you agree on that? Absolutely. Hey, we'll get back to the game in just a moment. But first, let me shout out a sponsor of today's episode, and that is Tello, a mobile service provider designed to save you money. And I think that's something we can all agree on, that it's good to save money on your cell phone plan and that you shouldn't overpay. And Tello has plans as affordable as five bucks all the way up to $25 for their unlimited everything plan. And the best part is, there's no contracts, there's no sneaky fees. You can upgrade, downgrade, change your plan whenever you want. And I love that about them. And because you're a George Camel fan, you can get a an extra five bucks off if you go to tello.com slash george you'll get five bucks off the unlimited everything plan for your first month of service so go check them out tello.com slash george or click the link in the description today's video is also sponsored by delete me one thing we can all agree on is that scammer spammers and stalkers bad that's a thumbs down right there and that's why i love delete me they scour the internet for these data broker sites that are keeping off your personal info putting your business out there and they remove it for you saving you time hassle and the risk of fraud and scam

And here's the best part. They've saved me 44 hours so far just by using their service over the last few months. And with that time I've saved 44 hours, I could watch like three, maybe four of Caleb's financial audits. And that is time well spent. So if you want an extra discount, go to join delete me.com slash George and you'll get 20% off any of their plans. Or click the link in the description below. All right, back to Caleb. There's a lot more we disagree on.

There's a lot more we agree on. Oh, sure. Is there any beef you have with me that you want to bring up at this time? Beef? Yeah. I don't think so. Well, you've said things on other podcasts. Have I?

Like, I'd love to hang out with George. Oh. And here I am. We're hanging out. Well, can I ask you and agree, disagree? Sure. Do you agree or disagree that 7% is a safe withdrawal rate? In case you didn't know, a withdrawal rate is the percentage of your savings that you can withdraw each year while still having enough money to last throughout retirement.

Now, back to this incredibly nerdy conversation. Depending on your situation. What situation could make that safe? If you have $7 million. Should we run that simulation? Go for it. Okay. This is fun.

I'm being such a naughty little boy right now. Some men just want to watch the world burn. How long will I have in retirement? How long before I die? Well, actually, how long do you? Well, let's say, you know, the average person retires at 65. At 65. Median.

And they make it. Let's say, let's give them 95. Let's be really generous. Is that fair? Sure. So you get to take out $490,000 a year. Here's the thing. Am I going to take out $493,000 a year? If you're following the rule, you are.

On an actual expense level, my expenses are not going to be $490,000 a year of what I need to live. Sure. Even have a very comfortable life, no one would be like, I need half a million dollars. But we're saying that people can. And we're saying that people can. Let's say my expenses. I'm going hogwild. I'm traveling extensively. Failure rate of 51.8% based on entering every year with a year,

in the stock market history of the United States. A failure rate of 50%. For someone and a organization that isn't willing to accept a 2% interest rate on a 30-year fixed rate mortgage, because that's considered too much risk, I don't think a 50% risk is considered acceptable. Well, in this scenario, it's not real anyways,

because no one's going to go, I'm going to withdraw half a million dollars a year no matter what happens in the stock. Well, if they knew what was safe, if we said that... Computers don't reflect reality. That's the problem. So we're saying if it's down, like people would do small. I'm saying this would never happen.

in reality. And we live in reality. And so while we can run simulations on computers all day long, truthfully, that person is going to go, ooh, down year in a stock market, I'm going to use my cash reserves. I'm going to limit my spending. I'm going to ratchet you down. It didn't have cash reserves. We said they had 100% in stocks. Well, I'm saying you have cash reserves. You have your emergency fund and even a retirement. I would say, let's have a, if it's me in retirement, I'm going to have a year or two of cash reserves for my expenses. We should have baked that for, you know, down years. It's where I'm not touching it on the down years. And so, that's where I'm going like, it's just more nuance.

I'm not saying you've got to do seven or you've got to do four. Not got to do, but if like people are listening to a trusted voice and we say that it's safe to do 7% a year. We're saying if the market did this, you can take out this. And what we're saying for the market that it averages 10% a year. So up years, down years combined averaging a 10% that's been the argument that's been made. But it's a hypothetical, here's what you could do. And the reality is we meet people every day who have, they call them to the show and they have a million. or they have a million five.

And they live great lives. They're debt-free. They have low expenses. And they don't need to withdraw. That's incredibly fair. And so that's what I'm like... But isn't it dangerous to then say, though, that 7% is safe? I don't think we were out there saying this is what you have to do in retirement.

Not have to do, but saying that it's safe. We're saying here's what you could do based on the math of if the market did this. 50% failure. And here was inflation. That is not reality. That's the reality if you invested in the stock market at every year, I spend a half a million dollars a year. Every year, I still have a 50-50 shot of making it 30 years.

Okay, well, so that's $7 million. If someone had, it would be the same failure rate or pretty darn close, if someone only had a million dollars. And withdrawing 70%, 7% would be $70,000 a year. Okay. So, like, they might need to spend $70,000 a year. Maybe. At that case, and if it's a 50% failure rate, that seems scary to suggest that that's okay.

But again, it's all relative to your life, your expenses. And if you follow the plan, you have very little, you don't have a mortgage. Yeah. And so I'm not going to advocate someone up to debt in their eyeballs go, well, you should just withdraw this percentage. I'm going to go, well, follow the plan as part of the plan, withdraw what you need for your expenses. Don't have a crazy lavish lifestyle that's out of your control. If the market takes a real harsh down turn, let's try to limit our withdrawals. Let's ratchet up our budget.

That's what normal people would do. Sane people would do that, which then changes the numbers and we can't account for all that in our simulations. I'll leave you alone now. I've had my cheeky moment. You had your fun. We'll get there and we'll talk about it when we're both retired and old crotchety men. George, come back on financial. And we'll both be going, I withdraw one percent from my retirement to cover my medications. Who knows what it'll be? Yeah. But, you know, I'd rather you have more than more than you need. Do you have a retirement date? You're like, hey, I'm out at this. Are you going just kind of work until you stop enjoying it? There was a number I wanted to hit that I hit, and I said I

was going to retire when I hit that number, but I ended up really liking the job. So I used to like, I don't know, I used to really care about, because like when you just all of a sudden get into this and it blows up you really care about what people think about you, because only you know you, your friends know, your family knows you and then just random people when they comment on you, it's like, oh my gosh, you know nothing about me. This is so parissocial and weird. But, you know, I've been able to separate from that and just like never see it, never care. And they'll never meet me. I'll never meet them. So literally nothing they say it matters. Wow. That's actually impressive.

And once I got to that place, which has been, you know, that started happening just like a couple months into this year. When I started working on that therapist, therapy, it's good. I really started liking the job more. Therapy. I'm sure it's got, you know, it's ups and downs. Yeah. You know, it's not all fun in games. Yeah.

But today, it's games. Oh, yeah. Would you agree that we had a good time today? I agree. We had summer moon. That was good. We got to debate a little. That's always fun.

I feel like you. got you, I think you needed to get that out. I think it was, you know, cathartic. It's fun because, again, we agree on 99% of the things, but what you agree on is no fun to talk about. That's not good content, and I want your channel to have good content. Wow, well, it currently doesn't. So this is the first piece of good content we've had, and Caleb, I have enjoyed hanging out with you. It's been a long time coming. Hope you guys enjoyed this video as much as we enjoyed making it. Thank you to Caleb and his team for letting us take over to the studio for this segment, very kind of you. And if you like this segment, check out the last time we did

and agree to disagree with Justpreet and Humphrey. Nice guys. Wow. Yeah. Thanks for watching. We'll see you next time.