George Kamel - Why Do “Financial Experts” Keep Saying THIS?

Episode Date: December 8, 2023

If you’ve seen the viral videos claiming that America is in a “silent depression,” don’t freak out. In this episode, we’re taking a hard look at what the data really says about our economy.�� Links: Preorder my new book, Breaking Free From Broke, and get more than $100 in FREE bonus items. EveryDollar budget deal: I love a good deal, and when you sign up using this link, I’ll hook you up with a 14-day free trial and $15 off your first year of the premium version of EveryDollar. Learn more about your ad choices. Visit megaphone.fm/adchoices

What's up guys, George Camel here. There have been a lot of videos on social media lately from financial influencers claiming that America is currently in a silent depression, which is what I feel like I'm in every time I see one of those ASPCA commercials with that Sarah McLaughlin song. Silent depression just sounds so sad, and it also sounds kind of made up. So today, we're taking a hard look at this trending content right after you talk to your doctor about clicking that like and subscribe. Spoiler, she's all for it. So go ahead and smash those buttons.

You don't even need a prescription. It's what we call OTC, baby. Take a pill to forget your problems. All right, so let's take a look at this influencer's video that went viral. Disclaimer, there's a lot of these videos floating around out there, and there's no reason we're focusing on this guy other than someone sent this to me.

No shade to Freddie, aka this guy. We are in a silent depression. When you compare the Great Depression to today, this is going to absolutely blow your mind. In 1930, during the Great Depression, the average home in America was $3,900. The average car was $600, and the average monthly rent was $18 or $216 a year, and the average salary was $1,300 for the year.

Fast forward to today, it is $436,000 for the average home, $48 grand for the average car, and the average rent is $2,000 a month or $24,000 a year, and that is, and we have a $56,000 income for the average American right now. So if you look back to the Great Depression, the house, was only three times the average salary. Now it is eight times the average salary. The car was 46% of the salary. The car today is 85% of the salary.

And here's the craziest part. The rent was 16% of the average salary. It is now 42% of the average salary. Okay, there's a lot going on there comparing people's lives from like 100 years ago. A lot of it is, a little head tilty and confusing, and a lot of doom and gloom on top of that. But that's also why content like this goes viral.

We love that chip on our shoulder almost as much as we love watching other people's lives fall apart. And videos like these are what keep that chip fresh. But before I dig in on that any further, the plot thickens. Notice that little triangle of caution right below this video. It says missing context. The same information was reviewed by independent fact checkers in another post. That is a thick plot. I do say so myself.

This case just remained interesting. You see, AFP Fact Check, a department within a news agency whose mission is to provide accurate, balanced, and impartial coverage of news, ran the numbers in this and similar videos, and found them to be regrettably a misguided load of baloney. They say, silent depression claims circulating on Instagram, X, and TikTok lack context. Much like the mugshot of Morgan Wallin that's taped to my neighbor's fridge, lacks context. What's going on there, Meredith? I have questions and I'm concerned about you.

Blink twice if you're okay. I shouldn't have to explain myself. It goes on to say that the 1930 income numbers used only accounted for the richest 10% or of Americans, which kind of skews the comparison with incomes from the entire population today. Now, if Freddie had used the income of the top 10% of Americans, that 56,000 would jump closer to 175,000, which paints quite a different picture, doesn't it? A picture with more margin, more options, and probably a lot of the money.

a lot more Pellegrino. That's that rich people water. You know what I'm saying? They like that sparkly bubbles. They're willing to pay for it. Oh my gosh. What do I do? Now along the same lines, the AFP also notes that personal disposable income per capita, say that five times fast, is now more than six times higher than it was in 1930, even after accounting for inflation. Disposable income per capita, disposable income per capita, disposable income per capita, disposable income per capita, disposable income per capita, Boom!

And lastly, this video kind of downplays the real hardship of the Great Depression, which is more devastating than anything we're seeing in the U.S. today. For example, in the 1930s, unemployment peaked around 25%. Compare that with August of 2023, 3.8%. There were also a surge of bankruptcies and bank failures in the Great Depression, and they didn't have the safety net programs that we have in place today. So here's how I look at all this. Yes, things are more expensive today.

But also, think about the standard of living in the 1930s. are about 1,000 square feet, with one small bathroom you shared with mom, pop, and your four sisters, Betty, Shirley, Helen, and Barb. On top of that, you spent your free time sitting around the radio playing Scrabble if you could even afford it. It actually sounds kind of nice. But you know what else is nice? Having a refrigerator and a washer and dryer and a guest bathroom, and not sharing a car with my wife, and having a car that has AC and heat in it,

and lighting my fireplace that's meant solely for aesthetics because my home has central heating and cooling. Oh, and also my smartphone, antibiotics, and seasonal throw pillows. Those are nice, too. You see what I'm getting at here? Our standard of living today is way higher than it was in the 1930s. And this guy has the privilege of posting these videos from his smartphone to the entire world. And tell me how life is so bad again? Pretty amazing.

But the truth is, you don't have to go with the standard or the average. You don't have to buy the average-priced car or the average-priced house or the average rent. In fact, if you do that, you'll probably struggle financially. Plus, nobody's taking black-and-white photos of you eating mush and standing in line to get a shift at the docks. you're doing okay. Even those of us who might be broke and living paycheck to paycheck, we're lucky to live in this great country where we have opportunities that other people from other cultures and other times would have never had. And yes, we have financial and economic

challenges. Nothing's perfect. Times are tough and things are harder to afford right now. But we have job opportunities, the gig economy, we have options, and even if you're struggling, you don't need to freak out. In fact, you know what makes one person successful with money and another give up? Right here, it's their mindset. And watching videos about the silent depression and how hopeless the future is isn't going to help it. All right, listen, what you believe about money, yourself, and the world, it shapes how your life unfolds. I know that sounds hokey, but every single day, you have the power to make decisions that will move you forward or set you back.

Every cheesy Gordita Crunch counts, my guy. That's a life quote I live by. I think that was either Einstein or Washington. It's a good one. The crunch is lovely. So you can click Buy Now, Pay Later, or you could empty the cart. You could struggle to make rent, or you could suck it up and get a roommate. You could take out a loan, or you could pause, have some patience, and buy a cheaper used car with cash.

The bottom line, comparing your life to how people had it 100 years ago is cavalier at best and idiotic at worst. If you're not okay with your current financial situation, it's up to you to do something about it. You can't blame the Gen Xers, the boomers, or God forbid the poor people in the 1930s who just were going through the Great Depression. Leave your great Aunt Bertha out of this, okay? So what's the something you can do? for starters, live on less than you make. Make a budget and tell your money what to do instead of wondering where it went. You can increase your income.

You can get a side hustle, even if it's just for a season to get your feet under you. Deliver pizza, take on some overtime, and maybe, just maybe, it's time to get up the guts to ask your boss for a race. It's worth a shot. And if you feel like you're in a dead-end job or you're underpaid, it might be time to go consider a new job or a new career path altogether. And that might take, you know, gaining a new skill set, getting some different education, and making some connections, but it's very much possible.

You're not stuck with where you are with your income or your finances. Heck, maybe you should start your own YouTube channel like me, and one day you'll be able to afford a cheesy gordita crunch. Dream big. That's all I ever wanted. Lastly, think about how good you have it. You know, when you're tempted to impulse buy that yo-yo on Amazon,

remember instant gratification will get you into trouble time and time again. As will yo-yo's. Did the Walk the Dog Incident and Mrs. Haynes' fifth grade class teach you nothing? Trust me, minor sacrifices now, will pay off in the long run, it will help you fix your money mindset, and it will keep you from losing your cool when everyone else is freaking out about silent depressions. Because the US economy will continue to go up and down,

just like it always has. But the money decisions you make every day are what matter the most. And the real baller move is to thrive financially, regardless of what the economy is up to, who's in the White House, what the housing market is doing, and especially what Freddie's posting on Instagram. All right, guys, I hope you enjoyed this video, and make sure to share this video with that someone special in your life,

who sends you dooms down content they come across every single day. They need a little hope. Thanks for watching. We'll see you next time. Economic depression can be hard on a nation, but there's hope. Introducing Econorize. When applied daily, Econorize can help alleviate the symptoms of economic depression, like decreased home sales, stock market crashes, in a sudden urge to buy gold. Ask your economist if Econorize is right for you. Possible side effects may include uninformed optimism, heighten risk tolerance, and willingness to overspend on vacations. Do not take Econorize with other forms of economic stimulants such as tax cuts and stimulus checks. Don't let

economic depression dictate your nation's future. Choose Econorize and choose a brighter tomorrow.