Speaker 1: Welcome the Money in Wealth with John Hobryant, a production
Speaker 1: of The Black Effect Podcast Network and iHeartRadio. Hey, Hey,
Speaker 1: this is John Hope Bryant. This is Money and Wealth.
Speaker 1: The theme of this episode is demystifying money. That's right,
Speaker 1: starting with simple terms that no one explains to you
Speaker 1: that people expect you just to understand. Well, no one
Speaker 1: has taught you any of this, things like equity, stock, debt,
Speaker 1: assets versus liabilities, good debt versus bad debt? Is there
Speaker 1: a difference? And things like leasing why would you do
Speaker 1: a Carly's versus buying the car, purchasing financing the car.
Speaker 1: These are, you know, really important concepts that can change
Speaker 1: your whole life and has changed mind. But no one's
Speaker 1: taught to you any of this stuff. Now somebody's going
Speaker 1: to say to you. I was talking to a guy
Speaker 1: who is in the music business and he bought his
Speaker 1: real estate for cash, and he's very proud of that,
Speaker 1: and he should be proud that he was able to
Speaker 1: do that. So I'm not hating on him for being
Speaker 1: able to do that. He made the money and he
Speaker 1: wanted to control this real estate. But the question is
Speaker 1: is that the smart thing to do well? It's a
Speaker 1: safe thing to do as long as you can afford
Speaker 1: to do it. You pay your property taxes and all
Speaker 1: that stuff, but you're not getting proper leverage on your money.
Speaker 1: There's not a billionaire in existence that did not use
Speaker 1: good debt to become a billionaire. All right, So that's
Speaker 1: another podcast episode for another time. By the way, I'm
Speaker 1: not encouraging you to go into debt. I'm telling you
Speaker 1: there's good debt and there's bad debt, just like this,
Speaker 1: good people and bad people. Right, there's good capitalism and
Speaker 1: his bad capitalism. So let me start off by saying,
Speaker 1: there's no shame in this game. The only stupid question
Speaker 1: is the one you don't ask. So I want you to.
Speaker 1: I want you to be committed to asking questions right
Speaker 1: and not being embarrassed. I asked Quincy Jones, who's a
Speaker 1: big brother and a mentor and a friend. Man, how'd
Speaker 1: you get so smart? He said, John, I'm just nosy
Speaker 1: as hell. I want to know everything about everything. I
Speaker 1: want you nosy. This young lady approached me and asked
Speaker 1: me a very wise question, although I think she felt
Speaker 1: unintelligent when she said it, but I'm so proud of her.
Speaker 1: That she felt comfortable enough around me to ask the question.
Speaker 1: She's about twenty four at the time that she asked
Speaker 1: me this question. She was a friend of a friend
Speaker 1: is a friend of a friend, and we had spent
Speaker 1: a little bit of time together, and I guess she
Speaker 1: felt comfortable enough to ask me in a moment when
Speaker 1: just she and I were standing together alone, John, what's equity?
Speaker 1: Like what's the stock? And I was so proud of
Speaker 1: her because it's what you don't know that you don't know.
Speaker 1: This is killing you, but you think you know. And
Speaker 1: everybody around her in her generation probably doesn't know the
Speaker 1: answer to that either. Young afric American female not raised
Speaker 1: in a household that deals with investment, and she wanted
Speaker 1: to be the first one in her family, I believe,
Speaker 1: who wanted to break out of that mode and to
Speaker 1: become an investor. Not just black lives matter, but black
Speaker 1: capitalist matter. Can I get an amen? So I was
Speaker 1: proud of her, and we sat there and demystified these
Speaker 1: terms for a minute. So equity literally is, you know, ownership,
Speaker 1: It is the net value of something. So if you own,
Speaker 1: I make this simple, you own a house. And the
Speaker 1: house is a praise for two hundred thousand dollars, and
Speaker 1: you owe one hundred thousand dollars on that house in
Speaker 1: hopefully good debt. That house has a net equity of
Speaker 1: one hundred thousand dollars. You owe the the home appraised
Speaker 1: with an independent appraiser, not your cousin pooky them. Not
Speaker 1: so why trying to hook you up and do your favor?
Speaker 1: An independent appraiser appraise the house for two hundred thousand dollars,
Speaker 1: and you have debt of one hundred thousand dollars. In
Speaker 1: this example, you have net equity of one hundred thousand dollars.
Speaker 1: That is what you own. That is your net value
Speaker 1: of net of the debt. Can equity be something other
Speaker 1: than a house? Yes, you have equity all parts of
Speaker 1: your life, in all parts of your life. You can't
Speaker 1: have equity in all parts of your life. Is a
Speaker 1: stock a form of equity? It can be absolutely if
Speaker 1: you own that stock free and clear, and if that
Speaker 1: stock has some value, actually, even if it doesn't have
Speaker 1: any value to the external world, or if you bought
Speaker 1: that stock, you own that stock. You have equity in
Speaker 1: that company. Now the market will determine whether equity is value.
Speaker 1: I'm going off on another tangent. I want to do
Speaker 1: a whole podcast dedicated to just investment, So put that
Speaker 1: aside for the moment. I'm going to just do a
Speaker 1: tree top sort of seminar, a masterclass on these demystifying
Speaker 1: these terms so that you have a basic understanding of
Speaker 1: how to play in this world, because it is what
Speaker 1: you don't know, that you don't know is killing you.
Speaker 1: But you think you know, and no one taught you.
Speaker 1: So it's not like you're dumb or you're stupid. No
Speaker 1: one gave you the memo. That was my I think
Speaker 1: my fifth book. And this goes back to the Freedman's
Speaker 1: Bank of eighteen sixty five. Abram Lincoln created a bank
Speaker 1: to teach free slaves about money, and he was assassinated
Speaker 1: the next month. No one ever taught you about money.
Speaker 1: No one taught you how this free enterprise system works, right,
Speaker 1: So how would you know the rules of this game
Speaker 1: unless somebody takes time to teach you. And you're smart,
Speaker 1: and as soon as you get the memo, you'll use
Speaker 1: it and you'll amplify it. So let's break this stuff down.
Speaker 1: There are assets in their liabilities, right, and then good
Speaker 1: debt and bad debt. Right, and then I'm gonna deal
Speaker 1: with one last piece in this podcast on leasing, when
Speaker 1: to do it, when not to do it. Get all
Speaker 1: your folks around the kitchen, table, around the get you know,
Speaker 1: around the barbecue. Get your posse together, get your book
Speaker 1: cup together. You're hopefully once some day your investment club together.
Speaker 1: Get your girls together, get your boys together. Let's have
Speaker 1: a weekly conversation. This is my ministry of finance. This
Speaker 1: is my poolpit right every Thursday, breaking this down for
Speaker 1: you in a simple, explainable way, not using twenty words,
Speaker 1: when two will do I've been here before. I'm telling
Speaker 1: you stuff I would have wanted to have known, and unfortunately,
Speaker 1: in most cases, learned the hard way, messing up, tow
Speaker 1: up from the flow up, losing a lot of money,
Speaker 1: and sometimes being just taking advantage of just being pumped.
Speaker 1: All right, So here you go, assets versus liabilities. Well,
Speaker 1: first of all, your assets cannot be on your You
Speaker 1: figure that out. And I don't know the age of
Speaker 1: people watching this and want this to be family friendly,
Speaker 1: so you'll figure that out. But your assets cannot be
Speaker 1: worn on your body. Where they can be worn your body,
Speaker 1: but that's not typically where you're going to find your assets, right?
Speaker 1: Are close assets? I guess you value them. They look
Speaker 1: good on you. But that's not a traditional asset. It's
Speaker 1: something you own, right, So that's not really what we're
Speaker 1: talking about here. But a lot of people think that
Speaker 1: clothes are assets, and they use bad debt to finance
Speaker 1: non assets, which makes a bad situation worse. I'll get
Speaker 1: to that in a minute. So what are some examples
Speaker 1: of assets. Home ownership is an example of an asset.
Speaker 1: People say wrongly, Oh, I don't own that home the
Speaker 1: bank does. Why am I paying on that home? Well,
Speaker 1: you only not own the home. You only do not
Speaker 1: own the home. If you don't pay the bill, then yes,
Speaker 1: the bank can foreclose on you and the bank will
Speaker 1: own the home as it should be. I might say,
Speaker 1: you don't pay me, I'm going to own your home
Speaker 1: if I loan you money, right. And if you loan
Speaker 1: somebody some money in your family to buy a home
Speaker 1: and they don't pay you back, you want your money back.
Speaker 1: Don't need to get emotional about stuff like this, it's
Speaker 1: just business. And if the bank loans you money and
Speaker 1: you beg the bank or ask a bank to loan
Speaker 1: you money and You got it on a good terms.
Speaker 1: You went through Operation Shops credit counseling program. You got
Speaker 1: your credit score up, got your debt down, your savings up,
Speaker 1: got you pre qualified for a prime loan. You got
Speaker 1: that loan, and a year or two down the road,
Speaker 1: your situation changes. You screwed up. You didn't call the
Speaker 1: lender they foreclosed. Don't curse the lender out, the linder
Speaker 1: doing that job right. Don't get an attitude when they
Speaker 1: want the house back and start calling them a bunch
Speaker 1: of names. Reality is, it just didn't work out. Is
Speaker 1: an experiment that didn't work out, and when your outflow
Speaker 1: exees you're inflow than your overhead, it'll be your downfall.
Speaker 1: And be thankful the lender gave you access to credit.
Speaker 1: Explain which your situation is, try to find an orderly
Speaker 1: way to get the house back to them, and hopefully
Speaker 1: you sustain that relationship, because relationship really is a form
Speaker 1: of capital. Relationship capital it is, in my opinion, in
Speaker 1: my life, an asset, and you can go back to
Speaker 1: that bank at another time and try again. So home
Speaker 1: ownership is the easiest way to build wealth. In my opinion,
Speaker 1: family is an asset. This is a non traditional asset.
Speaker 1: And I'm going to do a whole piece on marriage.
Speaker 1: But if you're in a relationship and two plus two
Speaker 1: does not equal six, eight or ten, then you're probably
Speaker 1: in the wrong relationship. You should be better together. Your
Speaker 1: children are assets, not traditional assets. You're not gonna get
Speaker 1: a loan on your children, but you're investing in them
Speaker 1: and hopefully that investment's going to pay off. Now, are
Speaker 1: kids also a liability? Yes? They are. Actually, this is
Speaker 1: one situation where a child can be a liability and
Speaker 1: an asset. They're probably a physical liability until they're eighteen
Speaker 1: that you're literally liable for them. They are literally a
Speaker 1: liability and they're spiritually an asset. Now you say, with John,
Speaker 1: stop messing around. Give me some stuff that's real that
Speaker 1: I can put my hands on. Okay, stand by home ownership.
Speaker 1: We talked about that. Family, We talked about that, and
Speaker 1: I mean, if you don't see your family your mate
Speaker 1: as an asset, you need to reevaluate who's your mate. Right.
Speaker 1: If you don't, your children are growing up to be assets.
Speaker 1: You need to reevaluate how you're raising your children and
Speaker 1: how your children are responding to your family wearing experience
Speaker 1: that's a conversation between you and them. But you need
Speaker 1: to evaluate that on the regular I'd rather you respect
Speaker 1: me and learn to like me than like me and
Speaker 1: never respect me. Another podcast for another time. Bonds, investments, stocks,
Speaker 1: These are assets business ownership. This is an asset. I'm
Speaker 1: giving you five examples. Here's one accessible to everybody. Education
Speaker 1: is an asset. Literally, the more education you get, the
Speaker 1: better you do in your life. If you apply it,
Speaker 1: you earn seven figures more having a college education than
Speaker 1: you will having a high school education over the course
Speaker 1: of your life. It's always better to be more educated.
Speaker 1: I'm obsessed with education. I think we need to make
Speaker 1: smart sexy again, and you need to shove as much
Speaker 1: education down your throat as you can manage. It is
Speaker 1: a buffer against poverty. Education is the ultimate poverty radication project.
Speaker 1: You cannot get enough of it. So here are five
Speaker 1: easy assets. I could probably list twenty five, but I
Speaker 1: gave you five to start. Here are five liabilities. I've
Speaker 1: already mentioned your kids. That's a literal liability until they
Speaker 1: are legal age. They are literally reliant upon you. And
Speaker 1: also the government says that they are a liability of yours.
Speaker 1: You can write them off literally on your taxes, and
Speaker 1: what they do is on your dime in your responsibility. Cars,
Speaker 1: most cars are a liability. They are a depreciating asset.
Speaker 1: So you have appreciating assets and you have depreciating assets.
Speaker 1: And I'll get to this in a minute, really deeply
Speaker 1: in the debt conversation, a car is typically a depreciating asset.
Speaker 1: Credit cards are liabilities. That's not cash. Okay. When I
Speaker 1: was growing up, the joke was, I can't be broke.
Speaker 1: I still have checks left. We used to float checks
Speaker 1: back in the day. Act don't act like you don't
Speaker 1: know what I'm talking about, my age. You know what
Speaker 1: I'm talking about. You wrote that check and you maybe
Speaker 1: forgot accidentally intentionally not to put a stamp on the envelope.
Speaker 1: Have said this before, and but you could tell it
Speaker 1: the one eight hundred number I sent the check. I
Speaker 1: sent the bill in and wait for them to snail
Speaker 1: smail for them to receive the payment and process it
Speaker 1: and all that stuff. It maybe bought you a week
Speaker 1: to ten days to get the cash to put in
Speaker 1: the bank before the check cleared. Today things are digital.
Speaker 1: Money's digital things are almost instantaneous, and before the checks
Speaker 1: you had cash, and you know when you're paying in cash,
Speaker 1: you know that money's leaving your hands. Right. I remember
Speaker 1: giving somebody a tip earlier night for twenty bucks, I remember,
Speaker 1: but I don't remember the last time I swiped twenty
Speaker 1: bucks when I went to the paper parking. I don't
Speaker 1: remember that, but I remember that cash I gave. Right, So,
Speaker 1: young people, it's not emotional, it's not. It doesn't tug
Speaker 1: on you. People actually think that credit cards is cash.
Speaker 1: Is not. People say, you know, most people don't have
Speaker 1: forty dollars for an unplanned event. This reporter was like, no, John,
Speaker 1: you're wrong. People have credit cards again, Hello, that's not
Speaker 1: your money. So you have credit cards, that's a liability.
Speaker 1: Charge cards are a liability. Charge cards are different from
Speaker 1: credit cards. Charge card like an American Express you can
Speaker 1: charge on it. You get to pay it in thirty days.
Speaker 1: Credit card you can pay it over a term. You
Speaker 1: have department store cards. These are almost the biggest ripoff
Speaker 1: because many of them hitting. They're really beautiful and shiny
Speaker 1: whatever hitting twenty six twenty eight percent interest rate. My
Speaker 1: guys like nosebleed stuff. And by the way, I used
Speaker 1: to have these cards. I used to have department store
Speaker 1: cards is the only way I could finance my business.
Speaker 1: When I was coming up, I had had a pet
Speaker 1: Boys card for my auto repairs. I had a Sears card,
Speaker 1: Yes I'm dating myself for clothes. I had a Macy's card.
Speaker 1: I had a I mean, I have these different credit
Speaker 1: cards as secure credit card. And that was my capital.
Speaker 1: Because I didn't have a trust fund, I didn't have
Speaker 1: financial card, I didn't have inherited so I had to
Speaker 1: you know, I had to make do with what I had.
Speaker 1: Black folks have been doing so much with so little
Speaker 1: for so long. We can almost do anything with nothing.
Speaker 1: There's no shame in that game, lots of pride. But
Speaker 1: then we have to graduate to new ways of doing things.
Speaker 1: Now talk about So I listed five assets as examples,
Speaker 1: in five liabilities as examples. These are easy ones. Right.
Speaker 1: Let me now talk about good debt and bad debt.
Speaker 1: Is there such a thing? Absolutely, just like there's good
Speaker 1: capitalism and bad capitalism. So good capitalism is where I
Speaker 1: benefit and you benefit more. Bad capitalism is where I
Speaker 1: benefit and you pay a price for it. So slavery
Speaker 1: was bad capitalism, all right, robbing somebody and then selling
Speaker 1: what you robbed is bad capitalism. Creating a comb as
Speaker 1: an entrepreneur to manage hair, happy hair or tough hair,
Speaker 1: and somebody paying you for the value that. So it
Speaker 1: costs you two dollars to make it, you're selling it
Speaker 1: for ten dollars. You're making a profit minus manufacturing of
Speaker 1: two dollars, whatever your profit margin is. And somebody buying
Speaker 1: that finds that valuable for them is worth one hundred
Speaker 1: dollars for them, may be invaluable for them to comb
Speaker 1: their hair. So fair change is no robbery. To quote
Speaker 1: my friend Rod mcgroo, fair exchange is no robbery. I
Speaker 1: benefit you benefited more. Good debt and bad debt. Now
Speaker 1: listen to me, Please write this down. Good debt is
Speaker 1: tied to a asset that might appreciate. Bad debt is
Speaker 1: financing an asset that will depreciate, will certainly depreciate. Stupid
Speaker 1: assets that you financed with bad debt are stupid things
Speaker 1: that people finance with bad debt are things like jewelry.
Speaker 1: And I don't mean a symbolic thing like an engagement
Speaker 1: ring or a wedding ring. I don't mean something where
Speaker 1: you're saving your money up but you just can't accumulate
Speaker 1: enough cash for that special moment. You want to get married,
Speaker 1: you want to get engaged, something that will last forever.
Speaker 1: This is actually an emotional asset. This is that family
Speaker 1: thing I talked about earlier tyings all together. So you
Speaker 1: might have in this example an example where you're financing
Speaker 1: a depreciating app but because it's tied to what you're
Speaker 1: building your family, it's actually a spiritual asset that makes
Speaker 1: it worthwhile for you and maybe gives you more energy
Speaker 1: to go out there and conquer in the world. So
Speaker 1: I'm not hating on your decisions. I'm just explaining it.
Speaker 1: When you buy jewelry, most jewelry, right, I don't care
Speaker 1: where you buy it from. The likelihood is it will
Speaker 1: depreciate in value. It will go down. Financing a car
Speaker 1: is a depreciating asset. Okay, So John, you're making not
Speaker 1: making any sense. Now You're saying that you're calling a
Speaker 1: car depreciating asset. And you own cars, John, what's the thing.
Speaker 1: Do you own your car cash? Well? I own some
Speaker 1: cars or cash, but I'd like to finance cars. It's
Speaker 1: a good use of my cash to keep it in
Speaker 1: my pocket and pay a lender for the use of
Speaker 1: that automobile while I own it time use of money.
Speaker 1: But that car is making me money, allow me to
Speaker 1: build wealth. It's taking me to a meeting. Hello, it's
Speaker 1: taking me to a conference, it's taking me to my office.
Speaker 1: So it's facilitating a money making or wealth building activity.
Speaker 1: So it is not the asset, but it is a
Speaker 1: gateway to an asset, in which case that's me right,
Speaker 1: and it's allowing me to go and flow. But I
Speaker 1: understand when I buy that car that it's going to
Speaker 1: go down in value. Now. I just had an experience
Speaker 1: where I bought a car and kept it for a
Speaker 1: couple of years, drove it, and sold it. It was
Speaker 1: an exotic automobile, a rare one. Not a rare one,
Speaker 1: but a highly prized brand, and I actually made a
Speaker 1: profit on that car. I didn't buy it to make
Speaker 1: a profit. It just so happens I did. And then
Speaker 1: I took the profits of that car and another car
Speaker 1: sold that lost value. I actually thought the car that
Speaker 1: lost value would sell for more. I thought the car
Speaker 1: that sold for more would sell for less. It was
Speaker 1: actually the opposite what I thought, but they canceled out
Speaker 1: each other. The one I lost value on was washed
Speaker 1: out by the one I made money on, and I
Speaker 1: was able to purchase replacement vehicles that were newer without
Speaker 1: harming my cash flow because I have good credit score,
Speaker 1: and I was able to take the proceeds from the
Speaker 1: sale and buy down the balance on the new purchases,
Speaker 1: and I was able to get warranties for the new cars.
Speaker 1: They did not have warranties for the old cars. There
Speaker 1: was a lot of reasons why upgrading was the right time.
Speaker 1: Is a non emotional decision. I'd say, oh, I'm not
Speaker 1: selling this car. I'm emotionally connected to it. Whatever you
Speaker 1: make it an emotional decision is going to be a
Speaker 1: bad decision. Please listen to me. Whenever you make an
Speaker 1: emotional decision, it's going to be a bad decision. People
Speaker 1: are financing sports tickets. Not you hear about these folks,
Speaker 1: middle class folks, paying two thousand dollars five thousand dollars
Speaker 1: eight hundred dollars for a single ticket to a game.
Speaker 1: What are you thinking? How are they doing it? Debt?
Speaker 1: They're financing it and paying for that over time, and
Speaker 1: most people get paymentized, they ask, well, just what's the payment?
Speaker 1: Never ask what just the payment is? When there's an
Speaker 1: interest rate in terms attached. You want to know how
Speaker 1: much you're paying for the for that momentary value of
Speaker 1: going to that game. And that game is gonna come,
Speaker 1: it's gonna go, it's gonna be two three, four hours.
Speaker 1: You're gonna you know, have an experience and it's done, right,
Speaker 1: like going to Las Vegas. It's done. Do you want
Speaker 1: to be paying for that for the next five years?
Speaker 1: Because that's the likelihood. I know folks who finance a
Speaker 1: car rental, and I'm not picking on a company a
Speaker 1: single car rental. People are financing that. People are financing again,
Speaker 1: game tickets, financing vacations. Oh my god, you go to
Speaker 1: a vacation, may not even like the person you went
Speaker 1: on the vacation with. You have an argument, whatever it is,
Speaker 1: end up coming up in a funk, and you have
Speaker 1: financed this whole thing. I'm gonna pay for that for
Speaker 1: the next two, three, four, five years. But you're financing
Speaker 1: one thousand dollars, but you're spending four to five thousand
Speaker 1: dollars to finance it over time or even double that
Speaker 1: twenty twenty five hundred. Aren't you offended? So just you know,
Speaker 1: I'm not telling you what to do. I'm explaining. I'm
Speaker 1: saying you want to finance appreciating assets, not depreciating assets,
Speaker 1: things like a good mortgage, a prime mortgage. Operation. Hope
Speaker 1: can help show you how to do that for a home,
Speaker 1: like buying a business or starting a business, you know,
Speaker 1: like I believe, Okay, I don't mind financing an education.
Speaker 1: I prefer you didn't, but I don't mind it because
Speaker 1: it will pay a dividend. It's a return on assets. Because,
Speaker 1: as I said earlier, if you get a college of
Speaker 1: education in not in basket weaving or some miscellaneous thing,
Speaker 1: I mean something that has gainful employment tied to it,
Speaker 1: a career path and specificity of return on investment. In
Speaker 1: other words, there are people. If you get a computer
Speaker 1: engineering degree, you know, if you want to make sure
Speaker 1: you never go broke, get an engineering degree on anything,
Speaker 1: computer engineering, mechanical engineering, I mean, any kind of engineering.
Speaker 1: You will have a job for life right and be
Speaker 1: gainfully employed, is my guess. And so that education, going
Speaker 1: to get an engineering degree will in all likelihood provide
Speaker 1: a return that is unequal to mostly anything else that
Speaker 1: you do with the same amount of money that you'd
Speaker 1: make an investment on. So I've given you example of
Speaker 1: assets and liabilities. I've given you examples of good debt
Speaker 1: and bad debt. Bad debt again, is financing a depreciating asset,
Speaker 1: Financing shoes, financing clothes. They will depreciate before you walk,
Speaker 1: you know, financing a car before you leave the car lot,
Speaker 1: you've lost ten percent. If you finance a car, leave
Speaker 1: the lot, dry down the street, turn back around, come back,
Speaker 1: sell the car back to the dealership. They will buy
Speaker 1: it for ten percent less than you just bought it for.
Speaker 1: An hour before I do a whole podcast just on
Speaker 1: the automotive industry. I'm going to break down a lot
Speaker 1: of different industries and show you how this stuff works,
Speaker 1: how these businesses actually make their money, how are they
Speaker 1: in business, and how does the economics work. And if
Speaker 1: you have a topic that you want me to talk about,
Speaker 1: just leave a comment wherever you find me on social
Speaker 1: media or the podcast, and me and my team will
Speaker 1: float those up to be included either in me answering
Speaker 1: a question or as a topic in the actual podcast. So,
Speaker 1: depreciating assets are things that will go down. Are likely
Speaker 1: not likely to go down in value, they will go
Speaker 1: down in value. Many of them have no value at
Speaker 1: the time as you're financing them. Do you know that,
Speaker 1: like jewelry, I was picking on jewelry earlier, but why
Speaker 1: because the marketable on that is is it's just crazy.
Speaker 1: Uh you know, I just buy precious jewels and and
Speaker 1: there's different types of diamonds and different types of metals
Speaker 1: and mixed metals and all. You can't outsmart a jeweler
Speaker 1: and it's sparkly, and it's got your eyes twinkling, and
Speaker 1: oh my god, you're gotten all emotional about the thing.
Speaker 1: And I mean, you just can't win, or you just
Speaker 1: can't win. Do you know that Las Vegas keeps getting bigger?
Speaker 1: If you notice that you can't win against the house,
Speaker 1: the house always wins. Jewelry maker will always win. You
Speaker 1: buy something for one thousand dollars or five thousand dollars
Speaker 1: of jewelry, you financing it, You're going to sell that
Speaker 1: same thousand dollars whatever it is, ring necklace. If you
Speaker 1: can get two hundred and fifty or five hundred dollars
Speaker 1: for it in the future, call yourself lucky. And the
Speaker 1: financing cost is going to go up while the value
Speaker 1: will go down, meaning because you're going to finance it,
Speaker 1: and now you own interest which is compounding on that. Okay,
Speaker 1: now let me talk about one last thing, which is
Speaker 1: car leasing auto leasing. No one explains this to anybody
Speaker 1: like you know. Here's the basics. Again. If you have
Speaker 1: a depreciating asset, then you probably want to lease it.
Speaker 1: If you have an appreciating asset, then you don't mind
Speaker 1: of financing it. By the way, that's not a great example.
Speaker 1: But if you're buying high end vehicles this example, brand new,
Speaker 1: high end vehicles, and you're not going to keep it
Speaker 1: for a long time. People are listening now who make
Speaker 1: six figures now, and you like high end vehicles and
Speaker 1: you have a business that you can write the vehicle
Speaker 1: off to, then you are a prime target to lease
Speaker 1: because unlike somebody you buys a car and may keep
Speaker 1: it for three, five, eight years, you're gonna probably keep
Speaker 1: that car you lease in this example for eighteen months,
Speaker 1: twenty four months, and then you're gonna roll that into
Speaker 1: another car and into another lease, is my example. In
Speaker 1: a likelihood. Well, the way they finance and you're gonna
Speaker 1: get you're able to write off if you do it properly.
Speaker 1: The cost of a lease where you cannot write off
Speaker 1: the cost of a purchase, at least not easily. Leasing
Speaker 1: is just designed for business people more easily. Payments on
Speaker 1: a lease are going to be less than a payment
Speaker 1: if you finance the car. Here's why, and this is
Speaker 1: for any car. Now you take a car that costs
Speaker 1: one hundred thousand dollars. I'm just roundings up. Maybe the
Speaker 1: car is fifty thousand dollars, Maybe it's ten thousand dollars,
Speaker 1: it doesn't matter. But let's say just for round numbers,
Speaker 1: it's one hundred thousand dollars car. And the financing company
Speaker 1: that's behind the leasing company, because oftentimes behind a leasing
Speaker 1: company is a bank or a financier. Right, So you're
Speaker 1: dealing with XYZ leasing company, but there's a financing vehicle
Speaker 1: behind that, and they have underwritten. They have measured the
Speaker 1: risk of not only you as a borrower, but the
Speaker 1: underlying asset, the vehicle. They have come to conclusion that
Speaker 1: that car that you're buying for one hundred thousand in
Speaker 1: three years, which is the term of your lease, will
Speaker 1: be worth in this example, fifty thousand dollars, so it'll
Speaker 1: be worth half. You're now going to have a lease
Speaker 1: payment over three years. That's going to spread out the
Speaker 1: fifty dollars of lost value in those three years on payments.
Speaker 1: Let me give you a better example where it makes
Speaker 1: more sense. This mostly applies to high end vehicles. But
Speaker 1: if you're buying a Ferrari or you're buying whatever. Again,
Speaker 1: I'm not telling you by these cars. I'm just giving
Speaker 1: you a real clear example. And you're buying a Ferrari
Speaker 1: for you know, two hundred and fifty thousand dollars whatever,
Speaker 1: the number is right, and the residual value of that car,
Speaker 1: that car is projected to hold his value. The residual
Speaker 1: value that car in three to five years is projected
Speaker 1: to be you know, one hundred and seventy five to
Speaker 1: two hundred thousand dollars, let's say one hundred and seventy
Speaker 1: five thousand dollars. You're buying it for two hundred and
Speaker 1: fifty thousand dollars, so you're going to lose seventy five
Speaker 1: thousand dollars of value over five years in that lease.
Speaker 1: This is a good deal for you because now you
Speaker 1: just have payments that are spread out over the term
Speaker 1: of that least three to five years on that seventy
Speaker 1: five thousand dollars versus the whole two hundred and fifty
Speaker 1: thousand dollars, and you have a balloon payment at the
Speaker 1: end of the lease, or you can pick up, or
Speaker 1: you can buy the car for the remaining balance plus
Speaker 1: any fees you owed, as long as you've maintained the
Speaker 1: terms of the lease. Now you're renting that car with
Speaker 1: the lease where you buy when you buy the car,
Speaker 1: as long as you again, there's no different than a mortgage.
Speaker 1: As long as you adhere to the terms with your lender,
Speaker 1: you own that car. So if you own the if
Speaker 1: you're leasing the car, you got to check with the
Speaker 1: owner the leasing company before you make some moves about
Speaker 1: the car. You can't send that car to Peru or
Speaker 1: Africa or someplace. But if you finance that car, you
Speaker 1: you own that car. As long as you make those payments,
Speaker 1: you own the equity the car minus the debt. And
Speaker 1: within reason, unless there's some restrictive covenants in the loan agreement.
Speaker 1: The covenant is an agreement within the agreement. Unless is
Speaker 1: there restrictive covenant in the loan agreement, you can do
Speaker 1: as you like. Okay, I hope that that was that
Speaker 1: that confused me. I hope that that was somewhat clear.
Speaker 1: I just unpacked the magic of leasing recently because I
Speaker 1: was considering doing a lease myself for something a car
Speaker 1: lease myself. I' found a lot of benefits to it.
Speaker 1: You got to check with your tax pro for yourself.
Speaker 1: But I found a lot of business busefits to auto
Speaker 1: leasing from my business. But I decided in the example
Speaker 1: that I was looking at, not to lease. It did
Speaker 1: not make sense for me. But I went through all
Speaker 1: the numbers. I would have had a slightly lower monthly payment,
Speaker 1: but out of the terms of the agreement just were
Speaker 1: not economically. It wasn't all that attractive in the long run,
Speaker 1: and they put a lot of restrictions on what I
Speaker 1: could do with the car. And I mean, look, they
Speaker 1: own it in an example, I don't, and I'm a
Speaker 1: control free and I want to own my stuff and
Speaker 1: do as I like, right, So I decided I'd rather
Speaker 1: put money down and buy the car, so I have
Speaker 1: equity in the car, and I'll own the car in
Speaker 1: a short period of time as long as I keep
Speaker 1: the terms, which I will. Okay, So I hope this
Speaker 1: has been good for you. Demystifying some terms that maybe
Speaker 1: you thought about and we're curious about, but too embarrassed
Speaker 1: to ask somebody. People don't want to admit they don't
Speaker 1: know what the heck's in the Wall Street Journal. They
Speaker 1: have no idea what all these terms mean. They're afraid
Speaker 1: to ask somebody what the fdi C means, Federal Deposit
Speaker 1: Insurance Corporation, the SEC Securities Exchange Commission, all these the
Speaker 1: OCC Office of the Comptroller of the Currency, which regulates
Speaker 1: on national banks, all these different terms. The Federal Reserve
Speaker 1: system versus the Federal Reserve banks. There are twelve Federal
Speaker 1: Reserve banks in different regions of the country because in
Speaker 1: the old world we used to use move money and
Speaker 1: even gold around anyway, and that's you know they now
Speaker 1: it sets monetary policy and does some other things. It
Speaker 1: is very important, which you have the Federal Reserve Board
Speaker 1: system in Washington, d C. Which has a board of governors,
Speaker 1: so you the Federal Reserve Chairman is who you listen to,
Speaker 1: who sets interest rates, aided by the vice chairman and
Speaker 1: vice chairwomen of the board and the Reserve Board of Governors,
Speaker 1: which are voting members on the FED system that set's
Speaker 1: interest rate. So you hear about you hear from the
Speaker 1: FED chairman, but there's a board that votes on all
Speaker 1: that stuff. You just don't hear from the different Federal
Speaker 1: Reserve Board of Governor members so often. And then you
Speaker 1: have Federal Reserve banks and bank presidents around the country,
Speaker 1: all of which are ballers. They're very, very powerful. That's
Speaker 1: the government. But these are terms. I can go on
Speaker 1: forever with all these different terms that nobody explains to
Speaker 1: you that I'm going to overtime demystify. Okay, I'm tired
Speaker 1: of hearing myself talking. Okay, this is John O'Brien. This
Speaker 1: is the trending topic of the week, and I just
Speaker 1: I don't understand some of the stuff. This is on
Speaker 1: a brilliant actor named Terrence Howard. Let me read this
Speaker 1: piece on Terrence from the Philadelphia Inquirer. Terrence Howard found
Speaker 1: liable for one million dollars in back taxes. He says
Speaker 1: it's immoral to tax descendants of slaves. Per a report
Speaker 1: from the Philadelphia Inquirer, the Empire actor is being ordered
Speaker 1: to pay nearly one million dollars in back taxes, interests,
Speaker 1: and penalties following his alleged threat to a Justice Department lawyer.
Speaker 1: By the way, I'm just reading this. There's no editorial,
Speaker 1: so don't be mad at me. I'm just telling you
Speaker 1: what's in the paper, which I believe is documented, stating
Speaker 1: it was quote immoral for the United States you government
Speaker 1: to charge taxes to the descendants of slaves end quote.
Speaker 1: I would love to be positive about this. I'd love
Speaker 1: to find some silver lining. I'd love to say I understand.
Speaker 1: I don't, I really don't. This is a brilliant actor.
Speaker 1: I'm going to give him his flowers first. I've seen
Speaker 1: Hish some of his shows. I've seen at least one
Speaker 1: of his series. I binge watched the whole season of it.
Speaker 1: I think too much like one of his characters. He's
Speaker 1: getting bad advice and he's making the worst kind of decision,
Speaker 1: which is an emotional one. This is not a play
Speaker 1: in a movie. This is not a part in the movie.
Speaker 1: This is not going to end well. You never make
Speaker 1: an emotional decision. Whenever you make an emotional decision, it
Speaker 1: is going to be a bad one. Mister Howard, if
Speaker 1: you're watching this, please know I mean you the best.
Speaker 1: I am not trying to get any kind of floss
Speaker 1: or credit or whatever. On your name. I'm trying to
Speaker 1: put some respect on your name by giving you good knowledge.
Speaker 1: And it doesn't appear that you've got good advice. Whoever
Speaker 1: is your advisors, you need to fire them or replace
Speaker 1: them or whatever. They're giving you bad advice. I'm happy
Speaker 1: to talk to you for free if you like. I
Speaker 1: don't want anything. If you're doing a little research on me,
Speaker 1: you know that I'm qualified to sit here and talk
Speaker 1: to you. I've made it legitimately, and I pay my taxes.
Speaker 1: So my brother has been in several tax situations before this.
Speaker 1: This is not a new one. He seems to just
Speaker 1: not like paying taxes. If you read the story that
Speaker 1: we will put, you know we'll reference it in at
Speaker 1: least the video version of this you'll be able to
Speaker 1: find online, but for podcasts purposes. Just research this on
Speaker 1: your own and you'll find that there are other situations
Speaker 1: where mister Howard has argued with taxing authorities. This particular
Speaker 1: argument is the worst argument because it's with the federal government.
Speaker 1: I'd rather owe my mama some money God rest her
Speaker 1: soul went he the smith, than owe the irs. Let
Speaker 1: me tell you something. Al Capone was a bad brother
Speaker 1: as a gangster and he it appears, literally got away
Speaker 1: with murder and they couldn't make anything stick on this man.
Speaker 1: But they got him on tax evasion and put him
Speaker 1: away for what ultimately became life because I think he
Speaker 1: died in prison. They got him on taxivation and he
Speaker 1: didn't take it seriously. He blew it off. The irs
Speaker 1: was like, look, we don't know where you're making your money,
Speaker 1: and the folks, we think it's illegal. But they can't
Speaker 1: make that case stick on you. But you've got to
Speaker 1: at least pay taxes on whatever money you're making. Where
Speaker 1: you make it is another situation that's up for law
Speaker 1: enforcement to figure out. But it appears you have an
Speaker 1: incredible lifestyle and you can't seem to justify that lifestyle
Speaker 1: with legal purpose. Again, the government can't seem to make
Speaker 1: that stick. But you have admitted that you're making this
Speaker 1: money and you've not paid your portion of taxes and
Speaker 1: you got to pay the piper. You can't drive on
Speaker 1: public streets, which is provided by the government. You cannot
Speaker 1: use street lights, which is provided by the government. You
Speaker 1: cannot go to public schools, send your kids in public schools,
Speaker 1: which is divided provided by the government, and taxpayers. You
Speaker 1: cannot use public transportation, you cannot use public facilities. You
Speaker 1: cannot go and use the courts. You cannot use the law,
Speaker 1: you cannot use the apparatus of the Argumentably, the best
Speaker 1: legal framework for country in the world was the United
Speaker 1: States of America for free. If this environment has helped
Speaker 1: you facilitate your aspirationial success, then you got to pay
Speaker 1: the piper and hear the numbers before you make a dime.
Speaker 1: Here's what the ratios and the scales are. If you
Speaker 1: don't like that, don't make any money, or go move
Speaker 1: to Argentina, or move to Egypt, or move go to Africa,
Speaker 1: or go to Europe, or go to Asia, someplace where
Speaker 1: you think it's a better deal, and go make some
Speaker 1: money over there. Don't do business here, but you're going
Speaker 1: to do business here. Here are the rules, and we
Speaker 1: all sort of know what we sign up to before
Speaker 1: we sign up. I do. I had one of my
Speaker 1: biggest tax bills almost fell out my chair in twenty
Speaker 1: twenty one, twenty two three what year it was. But
Speaker 1: I also I didn't curse. I was like, thank God,
Speaker 1: I've got this tax bill. Means I'm making some money
Speaker 1: and building some wealth, So I wouldn't have had the
Speaker 1: tax bill unless I'm producing an income. So it depends
Speaker 1: how is the glass half full or is the class
Speaker 1: half empty? Depends who's looking at the glass. Whether you
Speaker 1: believe you can or you believe you can't. You're right, okay,
Speaker 1: So let me get to the Terrence Howard thing, because
Speaker 1: you probably guys are probably tired of me already, which
Speaker 1: was sounding like preaching here, But I have personal experience
Speaker 1: with this because I've had the franchise tax board at
Speaker 1: my front door when I didn't pay them when I
Speaker 1: started Operation Hope in nineteen ninety two, and I used
Speaker 1: my private company to fund the payrolls for my nonprofit
Speaker 1: employees who were then operating out of my office. When
Speaker 1: I started Operation Hope after the Rodney King riots, I figured,
Speaker 1: because I was doing the right thing and doing a
Speaker 1: nice thing and doing something for society, the least that
Speaker 1: the government could do would be to give me a
Speaker 1: break on paying franchise tax, meaning the portion of the
Speaker 1: paycheck that goes to the State of California in this
Speaker 1: particular example from the payroll payroll taxes and at the
Speaker 1: State of California was like blunt that you're paying payroll,
Speaker 1: we want our portion of it. And that's the law,
Speaker 1: nonprofit or for profit. And they showed up at my
Speaker 1: front doorstep. I ignored the letters to my own peril.
Speaker 1: They showed up my front doorstep and put a cashier
Speaker 1: at my front doorstep of my office in my reception area,
Speaker 1: and went opened every piece of mail until they were paid.
Speaker 1: And I learned my lesson and I've had in my
Speaker 1: early life. I was running so fast. I wasn't trying
Speaker 1: to avoid the taxman. I was running so fast. At
Speaker 1: one year merged into the other and I didn't do
Speaker 1: taxes for four or five, six, seven years, and I
Speaker 1: had to go back and redo all those taxes. And
Speaker 1: I helped my I was like holding my breath, Please
Speaker 1: let me get to the taxman. Before the taxman gets
Speaker 1: to me again. I'd rather owe my mama than ohe
Speaker 1: the taxman that the penalties and interest from the irs
Speaker 1: are worse than any gangster or any mafia that you've
Speaker 1: ever experienced. It's unbelievably harsh because they're not trying to
Speaker 1: be your lender. They want to be the lender of
Speaker 1: last resort. They want to encourage you to pay your
Speaker 1: bill and get the heck out, and they don't want
Speaker 1: to long term credit agreements or short term credit agreements
Speaker 1: for that matter. And I had to pay the penalties.
Speaker 1: I found all my tax returns, paid the penalty and
Speaker 1: was thank and was thankful to get the irs out
Speaker 1: of my hair. And mister Howard did the opposite. He
Speaker 1: ignored it, bluffed it, and on this one situation with
Speaker 1: his a federal These are federal taxes. Again, state is
Speaker 1: bad enough, Federal property taxes is something, is another thing,
Speaker 1: and these are all these are all bad. But when
Speaker 1: you flubbed the government on income tax, they come down
Speaker 1: to you heart and they don't care that you were
Speaker 1: a celebrity. And this man's claim was that this was
Speaker 1: enslavement or something, or that the country was O's black
Speaker 1: people because we were a slave. Brother, you're making millions
Speaker 1: of dollars. We're not talking about pooking them. We're not
Speaker 1: talking about a descendant's claim of three generations of slavery
Speaker 1: or five generations or ten generations of slavery, which may
Speaker 1: have some legitimacy and maybe a proper case at a
Speaker 1: proper time. I mean, linc Abraham Lincoln actually gave plantation
Speaker 1: owners a payment or a way to get themselves out
Speaker 1: of slavery by releasing their slaves by giving them a payment.
Speaker 1: There could be some argument that there's some legal base,
Speaker 1: but that is not what we're talking about here, and
Speaker 1: that's not this. You were an actor in a highly
Speaker 1: paid show. You took the money, You took the money,
Speaker 1: and you spend it, and you knew that there was
Speaker 1: part of that they had to go to Texas. So
Speaker 1: how can the back end be slavery and enslave in
Speaker 1: our abuse of the front end? Wasn't slavery and abuse?
Speaker 1: Were you enslave when you I'm not Jamin up Terrence
Speaker 1: Howard here. Please, I love the brother. I want him
Speaker 1: to do right, but I've had to be people to
Speaker 1: tell me straight. John, knock it off. And I'm saying,
Speaker 1: mister Howard, knock it off. This is going to end badly.
Speaker 1: Please call the IRS and cut a deal. Please apologize
Speaker 1: for your statements. Because these IRS agents have are all powerful.
Speaker 1: They're worse than judges. They don't have to do it
Speaker 1: what they're doing in the public. They can just simply
Speaker 1: come in on in a bad day. And if you
Speaker 1: cursing them out and I heard you left several voicemails
Speaker 1: for this iras agent. MEMBERY. This is the person making
Speaker 1: forty fifty sixty thousand dollars a year and may not
Speaker 1: be happy at home and may and may resent you.
Speaker 1: Maybe don't let them be racist, but I mean let them.
Speaker 1: They may just resent your success and they don't want
Speaker 1: you talk and mess with them on top of that,
Speaker 1: and they may just throw the book at you. The
Speaker 1: book at you is going to be very very, very
Speaker 1: very bad, and this interest is going to keep compounding.
Speaker 1: As a former president, it's about to deal with the
Speaker 1: power of compounding interest in the opposite direction, which is
Speaker 1: he thinks that that eighty three million dollars pen a
Speaker 1: check that he had to write, or the three hundred
Speaker 1: fifty million dollars check that the court said he had
Speaker 1: to write in New York was bad. Wait, you see
Speaker 1: interests on that. I think it's already started growing at
Speaker 1: some crazy amount a day. If the number I read
Speaker 1: was correct, he may have forty million dollars of interest
Speaker 1: a year a year, just an interest if he doesn't
Speaker 1: pay that thing off. So, mister Howard, you need to
Speaker 1: pay this off. You need to cut a deal. Put
Speaker 1: your ego in the drawer. Stop to leave your speeches
Speaker 1: for your scripts. If Bassior Andrew Young said that men
Speaker 1: and women fail for three reasons arrogance, pride, and greed,
Speaker 1: put the pride aside, please and cut a deal. You
Speaker 1: were not enslaved. It's not about slavery. You're not oppressed.
Speaker 1: You sign on this deal, these contracts you were paid,
Speaker 1: You spent the money, you had a good time. You
Speaker 1: are a celebrity living a great life. Pay your share
Speaker 1: so that poor kids can go to school, and then
Speaker 1: we can all get you know, work on drive, on freeways,
Speaker 1: at work. This is not the government ripping you off.
Speaker 1: This is the government. Money comes from us. Hello, Hello,
Speaker 1: Hello everybody. The government's money comes from us. Things don't
Speaker 1: just work on their own. They work because we America
Speaker 1: has someone in the worst infrastructure in the world. It's
Speaker 1: a whole other conversation. But if we don't have good infrastructure,
Speaker 1: we can continue continue to be a leading economy, the
Speaker 1: leading economy in the world. We have to reinvest and
Speaker 1: taxation is a form of that reinvestment. Yes, we need
Speaker 1: to make sure that they're smart taxation, but that is
Speaker 1: not this conversation. Pay your taxes and then go use
Speaker 1: the powers the taxpayer again, go argue about where your
Speaker 1: taxpayer money is going. We have two street lights off
Speaker 1: about two miles from my house, turn signals versus one
Speaker 1: because I wrote letters as a taxpayer and they and
Speaker 1: that one was easy. Wrote one letter, and the state
Speaker 1: of Georgia just installed the second turn lane, which has
Speaker 1: changed every time I turn. I feel good. Everybody else
Speaker 1: has less frustration because the traffic's moving. But there's potholes
Speaker 1: right near my house, and your whole wheell would fall
Speaker 1: off if you went over these potholes. It's like six
Speaker 1: of them and anybody can see it's you know, nobody
Speaker 1: would fix it. No. I wrote a letter, and then two,
Speaker 1: then six. Then I start copying everybody that I wrote
Speaker 1: a letter to everybody. Are you going to avoid this,
Speaker 1: mister mayor? It was a black mayor too, and I
Speaker 1: was told he was like he was just a He
Speaker 1: was like, who's John Bryant to tell me what to do?
Speaker 1: I'm a taxpayer, That's who I am. And after I
Speaker 1: paid that tax bill, I was really I was really hot.
Speaker 1: Hey man, you know how much money I paid in
Speaker 1: state taxes, in local taxes and property taxes. You'd be
Speaker 1: hot like me too, So yeah, fix the potholes man. Well,
Speaker 1: that brother, by the way, had some all kind of
Speaker 1: trouble after that. Wait, by the way, they fixed the potholes,
Speaker 1: and thank God, and I said, and thank you note
Speaker 1: when they did. But that man, because God don't like ugly,
Speaker 1: end up having a lot of bad karma. And he
Speaker 1: his life has not ended up very nicely because he's
Speaker 1: not a nice person. God don't like ugly. Okay, that's
Speaker 1: a different topic. And this is not related to Terrence Howard.
Speaker 1: He's a brilliant man in where I started. Brilliant man,
Speaker 1: brand actor. But doesn't mean you're as briant businessman. Get yourself.
Speaker 1: Some better advisors are call me for free Love and Light.
Speaker 1: John O'Brien, I'm out hey, Hey, John O'Brien, and this
Speaker 1: is money and Wealth. We have a fan question from
Speaker 1: make Mogo Moves two s's from Instagram again make Mogo
Speaker 1: moves from Instagram, and he asks, are you familiar with
Speaker 1: discharging debt? John? And do you use this avenue or approach?
Speaker 1: I am familiar with discharging debt. It's called bankruptcy. The
Speaker 1: most common form of discharging a debt is a Chapter
Speaker 1: seven or a Chapter thirteen. Well one is a liquidation
Speaker 1: one is a reorganization. In both situations, if you have
Speaker 1: an the courts think that you have an overwhelming obligation,
Speaker 1: they will allow you to discharge your debts release them.
Speaker 1: The hit will be on your credit report, your credit score,
Speaker 1: your credit rating, your ability to go and get financing
Speaker 1: again from a reputable lender. The word credit comes from
Speaker 1: the Latin root word credit tooe, which means credibility, So
Speaker 1: your credibility to get credit would be significantly diminished if
Speaker 1: you file for bankruptcy. I have had situations many over
Speaker 1: the course of my years as an entrepreneur where bankruptcy,
Speaker 1: unfortunately was an option. When I was homeless when I
Speaker 1: was eighteen years of age for six months of my
Speaker 1: life and lived in my Montero jeep that was being
Speaker 1: hunted down by the leasing company. I wasn't paying in
Speaker 1: Costa Mesa, and I'm sure that my credit was toe
Speaker 1: up from the flow up, and I had little option,
Speaker 1: but I would communicate with the creditor and tell them
Speaker 1: I'd pay them. Eventually, they were still looking for the
Speaker 1: jeep and I was still trying to avoid them and
Speaker 1: then when I could pay them, I did pay them.
Speaker 1: I could have found bankruptcy. I was clearly upside down financially,
Speaker 1: but I knew it would haunt me forever. And also,
Speaker 1: these folks lent me money. I asked them to lend
Speaker 1: me the money. They didn't force it on me. It
Speaker 1: was not a bad situation. It was actually a pretty
Speaker 1: good situation. I just ran out of money, ran out
Speaker 1: of a running room, ran out of cash, ran rend
Speaker 1: out of cheese, right, And you know, I made a
Speaker 1: bet and didn't work out. And that was not the
Speaker 1: lenders fault. That was my fault. And the monthly payments
Speaker 1: were due and I couldn't make it. And there were
Speaker 1: other monthly payments that were due and I couldn't make it.
Speaker 1: And my credit score a beat that time had to
Speaker 1: be three or four hundred. It's eight hundred now. So no,
Speaker 1: I just fought through it, and it was toe up
Speaker 1: for a time, and I worked my way back, and
Speaker 1: I cut deals with each of my creditors, and over
Speaker 1: time I paid them back. I did not discharge the debts.
Speaker 1: I ultimately settle them, sometimes for a fraction of what
Speaker 1: the face balance was. But that was an agreement between
Speaker 1: me and the lender that we both said yes to.
Speaker 1: So you can discourage debt, discharge debt, and if you
Speaker 1: do decide to discharge the debt through bankruptcy, know that
Speaker 1: some debts don't discharge, so you look to make sure
Speaker 1: you talk to a legal representative, talk to an accountant
Speaker 1: to see the tax ramifications. But you definitely want to
Speaker 1: talk to a bankruptcy attorney. I'm not encouraging to file bankruptcy,
Speaker 1: by the way, but talk. If you're going to do it,
Speaker 1: talk to a bankruptcy attorney because I hate you to
Speaker 1: go through all this stuff to try to get out
Speaker 1: of a debt only to find out that it is
Speaker 1: not dischargeable. All right, this is John O'Briant, and this
Speaker 1: is money and wealth. I hope you found this valuable.
Speaker 1: Tell your friends to subscribe to follow h Let's start
Speaker 1: a conversation. Let's unpack all of this mystery and replace
Speaker 1: it with knowledge and insight. Let's make smart sexy again.
Speaker 1: We've been making dumb sexy of a way too long.
Speaker 1: We've dumbed down and celebrated. It is time to make
Speaker 1: smart sexy again. John O'Brien, this is money and Wealth.
Speaker 1: I'm out Money and Wealth with John O'Brien is a
Speaker 1: production of the Black Effect Podcast Network. For more podcasts
Speaker 1: from the Black Effect Podcast Network, visit the iHeartRadio app,
Speaker 1: Apple Podcasts, or wherever you listen to your favorite shows.
Speaker 1: The top t