Wealth Advisors React to Finance TikToks

Welcome back, everyone, to We're Talking Money. I'm Dustin, this is Phil. Today we're doing something a little bit different. We're buying or selling some of the recent TikTok videos we've been seeing online. More and more people, I feel like, are using social media to get financial advice, so we're gonna be buying, we're gonna be selling some of these.

So if we buy it, it's okay for you to take that information and apply it to your plan. Doesn't mean it's going to work for you, but it's passed our test. If it's a sell, run out of here, get rid of it. All right, let's do this. Let's do it.

Here's when you should start investing your money. So if I'm making six figures a year, I'm not going to start investing my money until I know I can actually make six figures a year from my investments. The reason for that is that if your investments are taking your time, your energy, your attention...

She's saying you're not gonna start investing until you can make more on your investments than you can make, what you're making. That doesn't make any sense. If you're making a hundred grand, probably have two million dollars invested, five percent, which are already there. That's a hard sell. You don't wait and start investing when you've got that kind of money. You can have simple investments, that could be a basic mutual fund, but you can put your money to work the minute that you can save some money. So as soon as you're gainfully employed and you've got dollars that you can park for yourself, you better pay yourself first. That is a cardinal rule when it comes to retirement planning. Hard sell.

Secrets the wealthy don't want us to know. There's something to Rich through that you can do too. Boom. Stop using the savings account and instead put your money into a whole life insurance policy. Then you can loan that money out to your business and charge your business interest. Your business pays no taxes on that loan and can write off the interest. As your business is making its money, it's going to pay you back with interest, and you're going to pay back that loan on your whole life insurance policy. Here's the cool part about this: that policy is gaining compounded interest and dividends as if you never even touched it, and nobody's being taxed. That, my friend, is how you become your own bank.

All right, so we got this guy who's an insurance salesman. He comes from one of the big insurance companies, and it's all about put your money in whole life insurance and then you're going to borrow from yourself into your LLC. First of all, you better be careful, because you're about to involve Uncle Sam here. You're about to get the IRS involved, number one. Better make sure you got that buttoned up.

But I would tell you this: life insurance is designed for people who are dead. It's for their beneficiaries. You don't buy life insurance as an investment. It's designed for death. That's why they call it death benefit. It is not as simple as putting your money into a whole life insurance contract and expecting that that's the magic pill or the panacea that's going to make you wealthy. It can be used. I'm not going to put a hard pass on this or a sell, but I'm going to tell you that this is buyer beware. You need to do your homework before you start buying whole life insurance as a solution to your investing needs.

I'm on the fence on this one. I think that it can work, but I think what he's saying is probably a little bit to the extreme. He's saying you don't want a bank account, just put all your money into your permanent or whole life insurance. I think that you still need cash. I think you still need a savings account. But having some money in a permanent life insurance policy can be a good thing. It's guaranteed to grow, guarantee never go down.

One thing that he said that was incorrect, though, is when you pull that money out, you don't continue to earn the interest as if the money was still in the policy. When the money's not in there, you don't get the interest credit on that money that you pulled out. So it can be a good tool. Don't put all your money into it. Keep a savings account. I'm on the fence on that one.

One, two, three, four, five, six, seven, eight and nine. I'm gonna tell you why I've got so many credit cards and why you should do the exact same thing. Check this out. See, I apply for a lot of credit cards for a simple reason: protection against market downturn. So let's say the market turns. Credit card companies can just lower your available limits. So as of right now, I've got available two hundred and twelve thousand dollars in credit cards. So even if the credit card companies slash my limits in half, still got a hundred and six thousand dollars of leverage. The key is don't go buy stupid on your credit cards. Use your credit cards to make you more money. Keep the balances low, always pay them on time, periodically ask for credit increases.

Yeah, man, I'm gonna tell you that's a sell. Yeah, that's a lot of... that's a total sell. Anybody that has a quarter of a million or two hundred twelve thousand dollars of credit on credit cards, you're asking for problems. Number two, if they slash his credit, he said he's got a hundred and six thousand. He's right, he still has 106. But "don't buy dumb things," he said. That is like saying don't eat bread when someone puts it in front of you. Come on. Ooh, breadsticks. You're gonna buy some dumb things.

But even if you buy the smartest things in the world and all you do is make your payments on time, what are the interest rates? Most revolving credits or credit card interest rates are going to be double digits. What a foolish move to think you can live that way. And if the stock market goes down and that harms you, you probably had too much of your money in the market. You didn't build a solid plan. You didn't have cash on hand when you needed it. That doesn't make sense to me, Dustin.

Yeah, I think it's a sell for me too. I don't know why you'd want to have that many cards. I think that if you have one card that you really like, or maybe two cards that you really like for the benefit, find the card that you like, keep the balance low, don't pay interest, take advantage of the rewards, and don't have 15 credit cards like this guy said. Yeah, and totally avoid paying the huge interest that will follow you with a credit card.

Grant Cardone. Oh, how many times have I seen him.

Your top safest investments: real estate, real estate and real estate. Because when I buy a building with an address, if it's in the right location, it will be here 20 years from now. I'm not buying Bitcoin. I don't know anything about Bitcoin, man. You want to give me some Bitcoin, I'll take it. I'm not buying Twitter stock. Is Twitter going to be here in the future? I don't know. I only invest in things that I know will be there in the future. The Bank of America will lend me money to buy an apartment deal, but they won't lend me money to buy their own stock. Think about that. A bank will lend me money to buy a piece of property, but they will not lend me money to buy Bitcoin. They won't even lend me money to buy Bank of America stock. So what do they believe in? Cash flow, man. They believe in cash flow. Any asset that generates cash flow into the future is going to be worth more money. What do I invest in? Y'all see where I'm putting all my money. That's all I talk about all the time, because I know it's going to be there.

So I'll tell you that I've seen this guy many times, Dustin. He's been on TikTok and YouTube and all these social media channels, going to get the stacks and money racksaw racks. I think Grant is, for the most part, here... I'd tell you that I agree with him. This is probably a buy for me. He's exactly right. A bank won't loan you money to buy their stock. They will loan you money when they can collateralize the loan with the asset that you're purchasing. This is why we tell our clients all the time to diversify. You need to hold real estate. Real estate's a good tool, it's a good asset. Do I necessarily love the style in which he does it, and feeling like everything should be in real estate? I disagree with that. But I certainly agree with him that it makes sense to hold real estate. So I'm going to say that's a buy.

I think it's a buy for me too, with one piece that he said. He said, I invest in what I know, and he knows real estate. Doesn't invest in Bitcoins, he doesn't know Bitcoin. He invests in real estate because he knows real estate. So him doing what he's familiar with, I think that's a buy. I think that's good advice. If you are an expertise somewhere, then you should be putting your money there.

But I will say one thing about Grant. We're both going to call this a buy, but I am absolutely certain he does not own a piece of real estate that has appreciated quite like Bitcoin. So I'll just leave it at that. There you go.

If rich people have got so much money, why did I have to borrow to buy a house? They don't need to, they choose to get into debt. But my parents told me debt is bad. Not when you consider the power of leverage. What's leverage? Can buy you a really nice house, but if you took out a mortgage with a fixed rate of two percent interest per year, then you can invest your 5 million into an S&P 500 index fund, which has returned an average of 10 annually. Oh. So boring is sometimes good, and it can make you money.

Yeah, I'm gonna buy that. I think that there are certainly good types of debt. I think that a two percent fixed interest rate right now, with interest rising, is probably not going to be out there. It's probably closer to be four or five, six, especially with the way that we're heading. But if you can earn 10 on your investments, that's something. It's a good deal. Invest your money. Don't feel like all debt is bad. Like Dave Ramsey would say, "I've had it, I'm not living like this any more." Some can be good and help you propel your plan forward.

Yeah, Dustin, I couldn't agree more. I think these guys won their fun, they make you laugh a little bit, but hey, the bottom line is leverage, when used properly, is a great thing. In any successful business, people will tell you without it you're probably never going to go as far as maybe you wanted to go. But if you use it judiciously, it's a great thing. Leverage should not be something that is just a no-no. That's a buy. That is a buy.

All right, that wraps up our first TikTok buy or sell video. This was a lot of fun, Dustin. No, it's a ton of fun just watching all the different videos. I haven't seen a lot of these, and so some of them are pretty solid, some of them are blanket advice and probably should be taken with a grain of salt. But we'll continue to do these in the buy or sell, something to switch it up a little bit, and I will talk to you soon.