Financial Advisors React to Horrible Inflation Advice on TikTok! 

I don't know how these guys don't get more views. They do their homework and are smart and entertaining.

Is there a list of things that don't excite Bo?

I love the vibe that its two sportscasters commentating finance. Makes it feel very approachable

*One thing I will say about the used cars - my Dad passed in Jan 2021 so my Mom didn't need his F250 any more. He bought it in 2017 for $39.7K plus taxes (he was a retiree so he got a great discount). They financed it for 3 months at 0% to get an incentive, so basically paid for it in cash. It only had 12,000 miles on it, and we sold it in December for $39,000. I was happy that I was able to get such a good price for my mother. It was great since it was no longer needed, but I doubt the average person who still needs a car to drive will come out ahead.

It is interesting watching this a year later and seeing how spot on you guys were with your analysis and predictions.

To the car investment. Don't forget all these dealers adding up to $10k market adjustment fees to their new cars after you step into the door and start signing.

My first car dated from the mid 70s and had an eight track tape player. Unfortunately, by the time I owned it in the late 80s you could no longer buy eight track tapes.

July of 2023 and the interest rates have continued to rise! Fed raised it another .25 this month and its now raised at 5.5%. Good for my high yield savings account at least, and I don't need to finance anything right this moment... Happy I got into my house while mortgage rates were still below 3%, got lucky with a 2.6%... If I bought the same house today my monthly payment would be nearly double... So crazy.

I refuse to buy a car right now. KBB and banks still use pre pandemic values for reimbursement for theft or collision. So you are out 50% of a used car if it's stolen.

I payed $9100 cash for my car used in 2018. Don’t plan on selling it anytime soon. Great fuel mileage and not that expensive to maintain. I don’t drive a ton so why have something flashy. My car has roll down windows 🤣.

I remember a Milton Berle skit where he trades a 1923 Essex during the depression for a new car because the dealers are so desperate for business and after the war pays ridiculous amounts of money for..... A 1923 Essex: the same car he couldn't get rid of fast enough a decade earlier.

the lighting improvement is an improvement... now just add some off screen acoustic panels

At 28:00 that's me was watching a couple of houses (not for sale,belong to friend or acquaintance) that were valued at about 300K until a year or so ago,now 400K might not be enough. Still caring for and living with 99 year old parent,meanwhile having been raising cash and fantasizing about living in a certain area through which the Old Dominion Cross Country Run ran. So I might have different thoughts about inflation than someone with no savings but with a whole lot of debt. Really not funny at all. Not even a little bit. There have been housing bubbles before but I fear we will inflate our way out of this one rather than the house prices coming down. Also how much of this housing runup is due to big corporate landlords buying up the housing stock to convert previously resident owned houses to rentals?

I remember in 2007 no one saw a housing correction coming either. Supply was low. It certainly seems like a possibility with rising interest rates, but who knows. Loan quality is probably better now at least.

I was in California last week for thanksgiving, and I was horrified to see premium gas (which is only 91 octane there) selling for $6.59/gallon in some places.

Your contents are always golden. Thank you!

Inflation isn’t the price increases, it’s the expansion of the money supply. The price increases are a consequence of inflation. People keep saying that increasing the money supply caused inflation…. No, increasing the money supply IS inflation.

I would rather have a more reasonably priced house at 5% APR than an overpriced one at 3-3.5%, especially as I build deep pockets and if rates get too high can put 25-35% down, move to a 5 year arm and plan to pay off in 5 years. Supposedly Dave Ramsey only buys real estate in cash. Those burnt by the 2008 housing crisis, at least my friends, try to advocate 50% cash down on rental real estate investments.

Now I need to save up for a '90 El Dorado, that interior is sick

A few questions. Isn't inflation a loss in purchasing power by definition? Wether people's wages are going up at the same rate it's irrelevant as to how much a 1USD can buy. If your wage grows higher than inflation, you're richer. But the dollar is still losing purchasing power. You still need more dollars to buy the same thing. Like you guys said, one thing is the purchasing power of the wages vs purchasing power of the currency. You can have increasing salaries in a non inflationary scenario. It has much more to do with productivity than money supply. And at the end of the day, supply chain constraints should be temporary. Once they are resolved, prices should go back to previous levels. But, if part of your new prices are due to an increase on the money supply, those prices won't go back. Even if you stop "printing" money, you're already working on a new level of money stock on the economy.

Drunk low interest party? YUS! Sub'd

Yes, prices have increased to account for inflation and supply chain issues, but you neglected to mention that corporations are hiking prices on top of that in order to generate huge profits.

If people are buying homes at these elevated prices, aren't they taking more debt that could make their mortgage unserviceable in the foreseeable future? Also, what does the data say about the average home purchase? Are people biting more than they can chew?

Did I hear the word "war"? No! It's a "special military operation"! Fifty years in the future -- and gas prices? You won't be allowed to buy gasoline in 50 years!!!🤣

I am very interested to see where home prices go with interest rates climbing. In my mind, there’s an almost concrete relationship between interest rates and home prices. I can’t see these prices staying so high with interest rates going up. Who’s going to be able to afford the monthly payment, and even if the average family over leveraged to buy a home (which many do), at what point will the banks not lend them that much.

LOVE THIS STYLE OF CONTENT! Keep it going!!!

Love these videos. Love you guys. Keep up the great work you two absolute legends.

So, I am a little confused. How much money do you think people make to buy a home for a first-time home buyer? If you say keep it under 25% of gross with average wages relative to market, you are looking at down payments easily over 20% in a lot of areas around the country. Am I looking at this market wrong when looking at wages?

20:44 so here is my experience with fliping cars. Lamborghini and ferrarie wont just sell thire cars to anyone that in its self creates artificial demand on the after sale. That is a ways to flip cars HOWEVER not the way she is selling it as its more or less renting a car for free and it only works if you can pay cash The way iv done it is buy buying hard to fined used cars and using my own mechanical knowledge to fix them up it may be even pulling apart the transmission and fixing a $30 part and now i can sell it $3000 more i usaly buy cars that have strong resale and low repair costs For some cars even if you buy new thire depretiation can be vary minumal if you do it correctly i genraly levrage that to get nicer and nicer cars with out having to spend an arm and leg But again you will lickly break even and you need to know what your doing when and were to buy and sell

We arguably have more inflation today than the 70's because the CPI is calculated differently. The calculation is further from reality today.

Great episode guys💰

inflation is always bad. It is the devaluation of the dollar/currency and is only deemed necessary because in theory it incentivizes people to spend and use money in the economy or else their money's value will be lost due to inflation. It is a psychological trick that make people think that the benefit of money circulation outweighs the cost of devaluation. The fact that you can circulate money and not devalue the currency is evidence that inflation isn't good in the long run. Inflation is basically like upping the aunty in a poker game where the people with the most leverage will have a greater advantage.

What pay increase? Most employers’ pay raises to employees do NOT keep pace with inflation. Even the middle class is seeing their disposable income disappear in front of their eyes.

I live in the county with the highest average gas prices in the nation and the prices are already almost $6 a gallon right now with the recent bump ($5.70 on average for regular unleaded) I’m glad I rarely fill up with my current vehicle being a plug-in hybrid which I can charge at work for free. I save about $150 a month now and don’t even have a long commute compared to a lot of my peers at work. Makes me wonder what people pay per month who drive 30+ minutes to and from work each day. 😮

When you talk about countries around the world having similar problems with inflation, Australia is just as bad. We have historically the lowest interest rates ever and like the US, we've just been constantly dropping them to keep the party going although our inflation is significantly lower than the US. This has skyrocketed housing and just general living costs and causing huge issues. Given our inflation is much lower (a less stimulated economy) yet record low interest rates which have been decreasing for decades, kind of feels like we're putting off an inevitable recession or slow down of our local economy by continuing to lower interest rates and kick the problem down the road. Problem is, we really can't go any lower. May not happen this year, or even this decade, but I do feel we're going to get to a point where we can't drop them any lower and there will be the inevitable slow down. Still can't wrap my head around some economies having negative interest rates....

Great show, thank you

How does inflation help make paying my mortgage off easier? Everything costs more and my mortgage didn't change but neither did my income. If your income doesn't increase faster than inflation how does it make it easier to afford?

Speaking of contrarian, here I go. The problem is that we are using the U.S. Dollar as a yardstick - and that makes us think about it incorrectly. I'd argue that a home, or milk or coffee, or a car, or gasoline is all worth what it was 40 years ago. What is happening is that the dollar is worth a lot less relative these items. A college education, medical care and some other items are worth more than they were 40 years ago. The dollar has taken a real beating relative to these items. And clothing, appliances, computers and televisions are worth less than what they were 40 years ago. The dollar has held relatively well to these items. So, think of it as the "devaluing of the dollar", because these items all still fill the same essential needs they filled when I was a kid.

Great video. Thank you so much!!!!

If home prices don't come back down, no one will be able to afford them! It's already beyond ridiculous with current home prices. Even if you own a home and can sell high - taxes. Also, buying high means more annual taxes.

Danger Will Robinson 😂😂

Never thought I’d see Derek Brunson on the Money Guy Show. 😂

2021 me thinking we were getting taken to the cleaners on the cost of our home. 2022 me gawking at the estimate home values.

Financial mutants UNITE!Appreciate your teaching, perspective, and visuals MGS.

Great show..

These are not unique time for housing prices. Same exact environment from 2002 to 2006. Four bedroom, two and a half bath houses were skyrocketing for each of those years. I sold a home in 2002 for 50% more than I paid two years earlier. I purchased a home in 2002 for 260K and sold it three years later for 420K. I purchased a home in 2005 for 325K and sold it seven years later for 290K. Bought a home in 2013 for 270K and its now worth almost 600K. This market has the same horror stories as the previous "unique" time. Multiple offers at ridiculous valuations, waiving contingencies such as home inspection or existing home sale and so on. There will be "crashes" but as stated in this video...they are brief (1-2 years) periods of stagnation with minor retracement of prices (10-15%). Best advice I can give is to wait for the stagnation period and try to get the lowest interest rate you can.

I like how the clips from Tik Tok are mixed in, it makes for a good style of video

Actually the electronics of a car like that Cadillac are far from obsolete. They may fail give. It’s. Age but there are lots of old cars on the road with simple electronics and analog works just fine and by no means obsolete

Expanding the currency and credit supply was inflation before the term was redefined. Result of inflation is rising prices. Lots of new currency and credit in recent times but it is complicated by psychology of value and fear.

I have a $150 a month car payment. Haha

I’m mainly waiting for interest rates drop to least 5%

Need to factor in the tax brackets. We are fucked

Money Guy Show ❤❤❤

The home price and auto price increases have the same causes: supply significantly falls short of demand and interest rates were at the historic low level. You say with so much confidence that the supply chain issue will be resolved and interes rates will rise, which will bring normalcy to the car price. You don't say the same for real estate. There may be different paces, but why similar price elasticity when going up but decoupling when going down? Forget depreciation vs appreciation, I'm talking about reversion to mean. I don't understand.

41:28 Run urinalysis with your mortgage

Cars being held for appreciation (Speculation?) probably cannot be used as present transportation or commuting. Ruins them. Such cars must be garaged and protected which costs money. Also may need to be insured against theft or fire. There are some very wealthy people out there who will spend lots of $ for certain "classic" cars or even something like a Mustang or '57 Chevrolet but I think if there is any money to be made at all reliably it is probably to be made by experts who restore and rebuild such cars.

Great content!

@0:10 is that derek brunson?

You need to do an update on this video for the now times

Do you guys think the interest rates will be back down to 2-3% because now it’s going up & I’m seeing 4-4.5%.

How can i listen to your podcast

Bet on you guys to win PFCs tournament!!

Inflation making real estate more valuable is fake or artificial value creation. Sure it makes the owner more in hand later, but umm everything else costs more too so the property was flat through the ownership period.

Home owner's benefit from inflation and renters suffer from inflation.

lol in canada theyre higher than 7 dollars a gallon

The used car thing, it actually isn't that far off. It's REALLY hard to get some brand new luxury brand cars now-a-days, so people will pay a premium even for used.

You dont need yo wonder, just read your Macroeconomics book :D

I own my car. I spend at a minimum 500$ a month to use it. I use it for work too so.

Inflation is just part of the economic cycle, it’s natural. When things are good and affordable eventually supply won’t be able to meet demand (because things are so attainable) and there will have to be a shift to offset that. Good protections against inflation is making sure your consumer debt load is low, that you’re following a budget with lots of savings and cash on hand, that you can re-budget your expenses as things get more expensive, and most importantly living well within your means. Don’t go buying a home at unrealistically low interest rates for 100K over asking because there’s a bidding war. Anyone can afford a home at 1.5% interest, but even if it increases by 3% you’ll find a lot of people are in big trouble.

+1 like and comment for the algorithm for showing GDP/debt ratios.

Love your show so much. I recommend it to everyone. Keep it up 💙💙💙💙

Bo looking thick! Get your swole on brother!

"What is inflation?" " Highway robbery."! ⛏

Inflation is basically from government growth including unfunded programs and has a good correlation with the printing of currency. If you don't like inflation then demand that government actually reduce budgets of their programs, not "cut" their growth. Yes there is some inflation from worker shortages and the like, but in general the leading cause is from the federal Reserve and government at all levels. Watch Free to Choose or read the book with the same name by economist Milton Friedman. Remember, the Government shut down the economy: "two weeks to flatten the curve". Both the federal and state and other countries misled you and after a few months they created this supply chain shortage, employee shortages, stimulus checks that stimulated the inflation growth and other issues. Before Covid we had and still have issues with inflation with college because government subsidizes student loans. We had inflation with homes when government guaranteed house loans that put people in homes they couldn't afford which drove up the price and demand of homes. In the 70s-80s inflation rose so fast that it put lower income workers in higher tax brackets because tax tables were computed with lagging indicators. So they were taxed more as they spent more and they paid more in interest in automated home loans. Government is always to blame.

Lol. Top of mind...

I got a 15% raise so this inflation is good?!

The floor has changed. Normal won’t be where it was before.

Inflation: too many dollars chasing too few goods.

inflation is definitely good because it discourages cash hoarding and encourages investment, but the fact that this is then used to suppress/stagnate wages, especially lower/minimum wage over decades, is severely contributing to other kinds of wealth hoarding and an upside down economy. If all your boss has to do is to give you a smaller raise than costs are rising, he will.

I can buy a beautiful house with a good solid acre n half to two acres for 3bed two bath for like 70

I know this is a year old and probably no one will see this comment, but I can state categorically that inflation is a bad thing. Here's why: Inflation has 2 components - a quantity component, and a velocity component. The quantity is simple, and that's how much fiat currency (like the USD) exists. The velocity component is how frequently is one bit of fiat currency changing hands over a given unit of time. If you were to print a million dollars per person in the country, but every single person just took that million dollars and stuffed it into a very crinkly king size mattress, prices would never change. Despite a massive increase in quantity, with that money having a zero velocity factor, the same number of dollars would chase the current available goods. Instead, what happens is this: The federal reserve, incestuously in bed with the federal government, creates money. Until that money enters circulation, inflation has not changed. Then that money gets used by the government, by the biggest banks, and the biggest organizations. During the first few transactions, that money has the same (or nearly the same) value as all the money that existed before its creation. That money then trickles out to businesses, which creates products and services, and pays employees. The money velocity increases and inflation increases. This trickle out process continues exponentially until the money reaches it's final circulation, usually in the low-cost service sector where the lowest wealth citizens live and work in. They are hit with the worst part of inflation as their costs will increase fastest and their wages will lag farthest. Inflation is an invisible tax that strips the buying power of the common citizen and benefits the state. It is the opposite of a progressive tax, hurting those operating on the margins hardest and benefiting those closest to the wellspring of fiat currency. It is categorically, objectively, a terrible and corrupt thing.

They explained well why our cars are bought new and then kept, well maintained, and driven until they're worth almost nothing! It usually takes nine to twelve years but might become more now that we're old. No loans, though. Gold, Bitcoin, or real estate. Real estate is just what the name says, real, and it returns rent though we've found that managing it ourselves can be a bother dealing with tenants; some tenants are wonderful, but not all. With gold, there's no ongoing return, but at least it's real and you can take delivery and put it in the basement. With Bitcoin, it looks to me like there's nothing there--if you understand it, fine, but I don't and I won't put money there. Here's one way I don't get Bitcoin: Section 8 of the U.S. Constitution permits Congress to coin money and to regulate its value. Section 10 denies states the right to coin or to print their own money. The framers clearly intended a national monetary system based on coin and for the power to regulate that system to rest only with the federal government. It looks like Bitcoin should be illegal but as noted, I don't understand what's going on there. As to their language, it's not "the data is changing". The word "data" is a Latin plural. It should be either "...the datum is changing" or "...the data are changing". And "a lot of people have found theirself..."? How about "...people have found themselves...".

Lambo is a rebadged Volkswagen

Inflation is caused by a fiat money system and printing money. 40% of all money was printed in the last two years. Since 1970 wealth of the top 10% went from 33% to 75% today. Inflation is a big benefit to the rich and hurts the bottom 90%.

$4.5T worth of QE - That is what they will put on the tombstone of the US economy.

One view from a random, frugal guy who likes fun/sports car and doesn't drive much (2k-3k miles/year, when I used to commute, I took the train): a good balance is to buy a used (5-10 years old) sporty car ('09 Porsche Cayman S in my case, purchased in 2019). An older, desirable (fun to drive, not focused on luxury) car will have depreciated most of its value (2/3rds in my case), then either hold its value or appreciate with inflation (since I'm not driving it into the ground). It's less about tech and more about the driving experience (which won't go obsolete). The downside is additional maintenance. Save money by learning to do some of it yourself (thanks RU-vid!). I didn't do this to make money, but I'm losing less than buying a new Camry. Of course, I already had a paid for 2008 Camry when I bought the Cayman, so yes, the smartest thing would have been to drive the Camry all the way to retirement, or further. If you're not into driving, get a safe, cheap econo box (3-5 years old) and save more on gas than me.

financial superheroes

Derek Brunson!!!!

You guys are correct with your views on cars typically being poor investments. However, if you know what you are doing there is money to be made if you can get your hands on the right specialty models. It does carry risk and has drag but it can be done. It is easy to get trapped in a falling market though.

27:27 will I get a raise?

I Gota say. As a normal joe and fan of your Chanel, I think you guys are a little unrealistic about new cars. As long as you buy one you can afford (Corolla for instance) it provides peace of mind and a very important reliability factor to get to work. As someone who started with getting the best used cars that I could ( 5,000 - 10,000 on the steep end) the amount I spent in repairs was insane. And that’s for a car with 80,000 or less on the clock, and a good brand/model like Corolla. Even still I spent far more. I bought a knee car that was very affordable and it has been extremely helpful to peace of mind and it cost me nothing but oil changes and gas which ends up being less. I know your speaking in terms of investments, but you often talk about cars in general ima way that is not very realistic

Great Chanel guys. Your some of the best for sure. On inflation, I feel like a lot of us average joes have been fed up with inflation for a very long time. My dad is in his seventies. And I remember wages in the nineties when I was a kid. Wages have become very stagnant vs inflation for a very long time. And on top of that, high paying jobs have become harder and harder to get and the ways to get them seem to involve more and more debt to obtain. Try being a landscaper even, they will ask you for experience. Same with construction and so on. Used to be able to start anywhere as a general labor guy and work your way up. Now you can’t even be a broom boy without two years experience. It’s the same in most careers now. And the price of a degree is completely out of the realm of reality for most people as they won’t get a job for enough pay on average to pay off that debt, and let’s face it, the majority of jobs only hire so many people. It’s not a great time for the average person

Inflation is never a good thing, as I understand it. You seemed to be conflating supply and demand with inflation (supply chain issues are not inflation, that's just the market) as well as increase in value with inflation (increase in home values is not inflation, that's appreciation). Maybe I have a more specific definition of inflation in my head.

Inflation is always bad. No matter what when someone buys someone else is selling. If the buyer, basically everybody, is buying today with money that is worth less than when they got it then everyone's standard of living is declining.

CORPORATE GREED IS NOT INFLATION Americans can not continue to absorb their greed. We are not getting wages that are higher and do not even begin to keep up. Absolutely nauseated by the current situation.

300k. Hahahahahha

I finally have enough money in the stock market to equal my home mortgage. Should I payoff my mortgage? I am 37 years old and I have 170k in my own investment account that I started two years ago; I owe 170k left on my home. Thank you very much for all you do.

Buy a training

These guys are laughing at the housing debacle? Seriously ? This is a real problem for lots of people right now. They can laugh it off because they profit from it. the younger people are getting crushed by this !

I'm surprised how off base they are about aspects of inflation. There is no such thing as "good inflation" and "bad inflation". Inflation is an increase of the money supply, not prices going up. Wages aren't even separate from prices, since a wage is simply the price of labor. This is not just an issue of terminology, saying inflation = prices leads to all sorts of fallacies.