I Borrowed $20,000 On Credit Cards To Invest, Now I'm Broke!
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- čas přidán 29. 06. 2022
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There’s a 100% chance this guy watched a CZcams video before borrowing $20k to invest in ETF’s.
And probably a Tik Tok video that says Dave Ramsey is a fool and doesn't want you to get rich.
The issue with borrowing is that when you lose your income, you're in a deep hole.
@@sblijheid not necessarily
@@erikq9788 I had to stop watching that guy after he became widely known. He became everything he said he hated early on in his CZcams channel.
Yes. A "How to earn a passive income in 2022" video, no doubt. lol
Nah it was probably one of the youtube grifters, that pump nothing but debt heavy trash.
"He who hasten to be rich, won't go unpunished." I live by those words.
I don't think this person was hastening to be "rich" - I think he was just trying to get to a more comfortable place than where he is now but that's not "rich". That's just "better off".
@@thomashaas5965 your logic is incorrect lol
The bibles been teaching for years ppl wanna be wise in their own eyes thou so
@@thomashaas5965 20k loan is hastening
Yea, live poor for 40 years.
Borrowing to invest is a fool's errand at best. Greed can be an excellent teacher to the right student.
Same borrowing for a home if you lose your job you lose your home eventually only hope is you sell it and its higher then when you bought it but most people lose job during recession and there are lots of new home buyers before recession . Risk is everywhere
Not really, smart money do it all the time.
Not if you do it wisely! This person did it the wrong way. Borrowing money and investing the right way can be the best and fastest way to build wealth, especially in real estate. It's called leverage. Saving to pay cash for EVERYTHING will take ages and only limit yourself.
@@muradshawar Not if you do it the right way. Dave gave up after his first loss in real estate because he didn't do it the right way. If you buy a home with equity below the median every time, and follow the right strategy it can be an excellent way to build wealth quickly (but not overnight) Leverage is a powerful tool when you use it correctly.
@@AdamGbl95 Thats a good point
Honestly when ever I complain about life I always think someone’s situation is way worse. I ain’t no millionaire but I ain’t in any debt either and ain’t planning on being in any debt.
Depends on the type of debt.
Totally!
@Yehuda Stollak Debt is great for wealth creation.
Wait until a future-ex-wife shows up!
Good debt that can be managed is a good thing. Dave needs to do a better job of teaching his listeners that, they are missing out on a lot of opportunities
Don’t gamble what you can’t lose
In this guys case, what you don’t even have!
High risk! High rewards!
Don't gamble with scared money
@@alinatamashevich3354 scared money, don’t make money.
@@Prod1jbtc Way to become a broke joke too.
His first mistake was thinking gambling is the same as investing.
You said it best.
It kind of is.
@@jimmymcgill6778 Explain how long-term. Decades worth of investing. Is the same as gambling.
I do both BTW.
I love sports betting.
But it's for fun. Not a way to make money. Unlike my investment portfolio.
Yes, totally agree. His case was more of gambling then investing 🤦🏻♀️
@@I_like_turtles_67 Well you putting money in it hoping it will grow.
SO it's kind of the same thing. But it's also not the same.
The best life lessons I have learned from are mistakes that cost me money. These taught me more than any teacher ever did.
I am a teacher...in higher ed. I teach financial math. If students would listen to my lecture, they would not be in these kinds of financial drama's. But I am just a faculty. What do I know? Some of my students drive bigger cars than I do. I must have done something wrong
Exactly
And I don’t remember anything I learned in school accept fractions💀
Well did you know 99.9% of gamblers quit before their big win?
@@theeplugtv6834accept and except are two different words
"There's no shortcut to anyplace that's worth going." I like that.
so true! if it was that easy, everyone would be doing it!
Excellent advice. I am living this right now. I am paying it off as soon as I can and you are right. Look at it as paying to learn a lesson on what to never do again.
This guy needs to post on wall street bets. My favorites are the ones that gamble with student loans or helocs.
😳
I told a guy I had my house paid off and he asked me why I didn't leverage it and invest the money. I just laughed at him. It's financial "Peace", and peace isn't necessarily rich. Just happy at the place we are in the world.
@@lot2196 tells u that guy probably isn't the smartest 😂
There's a CZcams channel dedicated to this type of stuff. Benjamin I believe.
@@lot2196 you may have peace problems when the inflation on everything is 3x in 10 years. having used that to buy rental property, would certainly add more to that peace.
Lesson here: NEVER borrow money to invest in stocks.
even more generally, never use money that you can't afford to lose value on, to buy stocks. ( e.g. down payments, loans, emergency fund, etc)
@@soogasooga Yes!! I agree
What about real estate?
@@JeanValjean875 That I will borrow money for but not to buy stocks.
Unless you have a sure thing/hot tip, of course.
Never heard a rich individual say: Take a line of credit to invest in the stock market... 🤨
The problem with the "borrow to invest" mindset is that there is survivorship bias out in the world where a few people who speulated like that actually came out on top. No one ever pays attention to the overwhelming majority of cases where people who go that route end up losing. They don't usually make the effort to shout from the rooftops "Look at me! I'm a cautionary case!!" but those very few people that did succeed this way make sure to put it in your face.
Yikes. Remember, you don’t lose money until you sell.
I agree. He should start paying off the debt, but not sell his investments, especially not now.
I hope he held. S&P at all time high now.
@Armchair-Investor Yeh the market had rebounded a decent amount by October 23 I think
I bought a house when I was 25 years old ( Calif ) It rapidly increased in value. I bought a 2nd home and rented it to a relative who made more than I did. He flaked on me, addiction got him. I could have paid off the mortgage on my house instead of trying to continue to ride the real estate market. I sold the 2nd house & was only able to cover the existing mortgage. Years went by & I stayed conservative, investing slowly & incurring no more debt. If I hadn’t of gotten burned with that 2nd house ? I may have done something REALLY stupid later. Some of us just have to learn from stupid mistakes.
The best way of gaining wisdom is learning from other people's mistakes. I have a lot of knowledge, thanks to all of these callers, etc.
I bet he's up now
Speak Dave Ramsey appreciate all your wisdom. I went through your course 17 years ago with my church. I wish you would have listened to some of that wisdom back then and I'm cleaning up a little bit of a mess but hopefully it won't be long and it will be done
The moment of silence said it all..
I hope the caller didn't listen to Dave and held his ETFs. He would be ahead now.
6 months from your comment and he'd be double extra ahead
That was stupid. He would have done nicely to dollar cost average into an S&P 500 fund. At this point, he should just plan on paying off as much as he can each month and stand pat on the investment if he can pay that 20k off over the next 16 months. His losses right now are just paper losses. Eventually he will make a profit on that stock.
Yea if he was in spy and voo he should just dca and payoff that debt asap
I learned in my own life- there is NO shortcut to wealth, happiness or health. It takes extreme effort and hard work.
For me it was very little effort and work.
Just common sense and time on my side from starting in my teens with habit of always saving and investing a portion of my income.
@@blackworldtraveler3711 Every one should do what you did. Job well done. Travel on.
Would love to see Sharon on the show someday to share her experiences and insights as well. Perhaps she and Dave can come on Rachel's show soon. Proverbs is filled with so much wisdom and I dont read it enough.
I'd ride it out... Pick up extra jobs right still though but start paying that CC debt down as much as possible.
Completely agree those ETF will recover and he has the time to over work to pay that off
Agreed
Should definitely not cash out today. He needs to work it off and reap the reward at the end.
Man look at snp now
I fell in the same rabbit hole in 2018. Thankfully, I made 96k/yr; not 35k/yr
The $35k per year seems like the bigger mistake. Very few people will make progress with $35k per year income.. unless there is focus on other avenues of building wealth.
My favorite Ramsey line of all time is I have PhD in d.u.m.b.!! I think and use this phrase often.
Experience is a good teacher; gives you the test first and the lesson later.
I would ride it out until the due date becomes closer. He has until October 2023 before he has to make the decision. A lot can happen in a year
Correct. For example, he could lose a lot more money.
@@ASimoneau Correct. He could also make more money or break even as well.
Yah he could lose even more money by then.
@@shrimuyopa8117 He can also make more money by then as well.
They might back date the interest.
Good advice from Dave is to choose your pain and it takes a big man to admit mistakes.
You can't say you mostly follow Dave's advice and have 100k in debt
To be fair, he doesn't have a 100k in debt.
"I follow all it all except the money stuff."
That's hilarious 😂
True. The caller didn't say that.
He said he had $100K credit lines AVAILABLE, not that he'd used all of that.
He used just part of that and got himself in trouble.
You borrowed money to *gamble*.
For real!!!
Zero percent interest.. can't say it's a silly move. Him making $35k per year is the silly move; bump up that income. Take zero percent loans all day long use it to your advantage. Reasonably calculated debt is the way to go for most people.
At least he didn't blow it on a penny stock that went to zero.
@@MrTrevorDidier ...? It's only zero percent for a certain amount of time unless I'm mistaken
If the rate blows up at some point, have a way to pay it off in full. This is the mistake in the video's scenario. I would take unlimited 0% loans... even with 6-12 month pay back in full at the end of the term, or rate balloons. Definitely be mindful not to blow it all. ( ^.^ )@@AM-dk5ym
PSA: For those who are thinking about or are already delivery drivers. You will need to look into getting commercial or delivery insurance. In most pizza chains, the managers won't tell you to need special insurance. Insurance companies will deny your claim if you get into an auto accident while delivering pizzas. No matter if it was your fault or the other driver's fault.
The extra insurance and ware and tear on the vehicle probably means you're losing money. Also this renting out your car to people, if that really worked out would people just get 10 cars rent them out and just quit their job.
Interesting thanks for the information!
I'm not advocating insurance fraud (even though they like over charging customers) but how would they know your delivering pizza's if you don't tell them? The police aren't going to include that in an accident report. You definitely would increase chances of accidents though driving around all day and would wear out car parts faster so I don't think it's as profitable as Dave thinks.
@@chrishart8548 You would probably be better of renting trailers for moving or something like that, less insurance, less moving parts and less things that can break and cause expensive maintenance. People drive rentals like they're in the dukes of hazard lol
@BillSanders My insurance company State Farm was across the street from where I delivered pizzas. Someone from State Farm called me about getting commercial/business car insurance. That's how they knew I was a delivery driver. If the cop fills out the accident report and includes that the delivery driver was delivering pizzas or sees a car topper. Then, the insurance companies might find out you are a delivery driver from the accident report.
Great video! Even if you get a 9-5, yeah you're going to make more money but eventually thats going to get old, too. If your true passion is being a full time content creator, don't lose focus on that and stick with it. Thanks for sharing your experience.
I get where he’s coming from. I’m waiting to see if they officially announce a recession from this 2nd quarter, and pick up stocks when they really decline. But I have cash. Would never borrow to invest like that. That’s scarier than investing money you already have.
Never borrow what you can’t afford….
Good advice.
This was a very risky and reckless thing for him to do. But with all that said, if he ended up not listening to Dave's advice and let it ride until the promotional period was over, he would have made all his money back and then some. We have the benefit of hindsight.
Man here we are now. If he held he’d have a huge gain, the market has been crazy good this last 365
He didn't have any risk management set in place. Building success off this is doable if you have the discipline and patience. Id start small and scale up as I grow more consistent.
Been there, done that. Stocks never go the way you think it would. It is really gambling. My advice is to either cash it out and take the money and pay what is left. Other option would be to transfer to another 0% interest credit card if you have that option. This all depends on how long you want to wait but remember every time you transfer there is 3-5% fees and they will add up.
So great to learn here
Looking back, it was even lower in October 2022, and only coming up at bit in August.
The expected value calculation on this trade is horrible. Risking $20,000 to make $5,000?
“Invest” 😂😂😂
I hope this young man held those ETFs. S&P is at all time highs now. March 2024.
If he brought something like s and p 500 then yeah
@@slabbygabbyyeah, he bought $20k worth of S&P index 0:20
I was waiting for Dave’s head to explode while George was reading this. 😂
How does someone with 35k/yr qualify to borrow up to 100k?
Bank monopoly
Cra Cra
It was happening before the housing crash in 2008.
All you had to do was fog a mirror back then to buy a $200k-$300k house on $35k/yr income.
@@blackworldtraveler3711 yeah but not now.
I was wondering the same thing.
So the s&p can go to zero Dave... but mutual funds make 12% a year🙄
Sell nothing and start paying the loan... you have 15 months to do it
@Joaquim Sabina VTSAX though encompasses all chosen stocks by mutual funds. One of the safest investments there is.
Cause he wants people to buy the mutual funds he selling 🤣.
I've did exactly what this guy did on a smaller scale, used credit to buy product for flip sale but ended up not even going half even. So now I got some debt, but now have a solid full time and part time gig, putting my head down, understanding that you live in learn, should be back out of debt on baby step 2 in 3-4 months 🙏🏿
When I get money issues, I just pray and it goes away. Prayer works people! Just pray it away!!!!
It worked with the supreme court. 🤣😁😆😂🤪😅
This is a joke right?
@@cutehumor They just put a woman on SCOTUS that doesn't know what a woman is 🙄
give to caesar what is caesar's and to god what is god's. Gotta love people that pray to god for money 😂
when the collectors are banging at the door I pray even harder ( o.o)
I think we all know best until we don’t. I thought I was the new oracle of trading until I took a huge haircut on options. Good news is, lesson was learned. Now I invest in mutual funds and have no debt. You will recover Rick!
Poor guy, market SHOT UP after October 😂😂
Experience is the Best Teacher ✏📝📆
the way dave ramsey says “sooo”. 😂
Slow & steady wins the race. "Slow" as in 40 years of buying a small amount with each paycheck into various funds. Reward comes when you're 60 years old. Start at 20 yrs old.
Everytime you set your self up to get rich quick you can have your head taken off! 💯
This is what the result is if your read the garbage that the financial media puts out. Stocks/equity funds didn't _crash;_ they simply went from obscenely overvalued to slightly overvalued.
The currency is dramatically overvalued. Once you understand that you begin to realise how low stocks will go.
Completely
Dude was a genius just needs to ride it out and got a lil scared that the dip dipped lower but if he held which I hope he did he’s definitely up right now.
Such a risky move. I would never borrow money to invest for only a couple of years. You should be invested for at least 10 years. If I were him I'd hang on but save as much as possible to cover his (potential) losses. This must be so stressful for him.
@@erikq9788 Sorry you took that loss. But I bet no longer having this hanging over your head is priceless!
Today I came here to hear the smashing noise of dave to say what nuckle head. Follow the formula man....
I am the other way around. I get my paychecks and I invest first, thinking I will make a profit off say SHOP and AMZN because they split and now I am in a slight hole. I still have $2k in cc debt I have to pay off. Luckily, I have not been charge interest yet when it carries over into the next statement period.
I'd wait, but be focused on saving a bunch of money in the next year so hopefully cover it if I had to. Most likely it would go back up by then but who knows.
If he held it he would have got his money back and then some stocks just hit all time highs again 😮
Good to have a long time to not do the same mistake again.
Learn well and that lesson can save you enough to retire on.
Should have done put option contracts. But if it was me I never would have used OPM to invest. Use your own money and take some classes and learn how to read technical charts. The SPY is going down not up. If he knew technicals, he would have seen that at the end of 2021. It’s still got room to fall more.
It WILL go back up next year oct, just chill
Only issue with working a delivery gig right now is you're spending $600+ in gas. Get a remote online gig for more money and save that gas money.
Don't even have to watch the video to tell where this one is going.
Keep the index funds because they will eventually come back if they are worth anything and get a second job to pay off CC
Ouch…if anything borrow with long term financing for a low risk small business or real estate venture. If you KNOW the business well and are reasonably confident you will get that money back before it’s due…not speculative stocks they are not investments!!!
That moment of silence
😂😂 you see who was skinny dipping when the tide goes in.
People that have no idea what they're doing should never do something like this. People that know what they're doing can. Also, he could write covered calls against the position to start pulling some of that money back out while he's waiting. But again, you have to know what you're doing.
That’s called trying to catch a falling knife. 🔪
It always cuts you 😂
😅😅😅
If it's too good to be true it usually is. i learned that the hard way twice.
I like the Characterization of this mistake: Tuition for School of Life...sometime we had to learn things the hard way and painful.
My first thought was, "What an idiot!" Then that ended up being my 2nd, 3rd, and 4th thoughts too.
I was $100,000 in the red at the time of this video being released on the PLTR stock I purchased as the market plummeted. I had the wisdom to not sell (but, in fact, continued to buy more). As of today, I am $200,000 in the green and have sold enough (ie taken profits) such that I would still be in the green even if the stock went to $0 per share. Moral of the story, ladies and gentlemen, is that the stock market is a wise person’s domain. If you aren’t gifted with exceptional wisdom and intelligence, let those who are manage your money.
Don’t risk what you need and have for what you don’t need and don’t have.
Always position yourself in high risk situations that you can afford to loose
Better yet just keep your money and build. Don't take risks.
Protecting your capital is much more important than making money. Basically because if you lose your capital, making money is much harder.
''Missing the train'' vs. ''losing your money''. There are a lot of trains, but if your money is gone, it's over.
Unfortunately, most people don't get this, the majority is after chasing tops/bottoms where they fail & get out of the game. Risk management is the key.
“Never lose money”
-Warren Buffet
Deep. I haven't heard it put like that before.
Ramsey laugh’s 😂 like Chucky!
“A lot of bad decisions made here.” 😂
Bad choices… at this point ride it out and hope.
Often, when there is an A or B choice like this, the best solution might be a hybrid. I would have considered to go half: cover $4500 now, wait and see if the market does not recover.
I’m not a religious person by any means but through Dave I say that proverb with him every time. He’s got it engraved in my head.
You don’t need to be religious to find wisdom in religious texts.
...a diamond is a diamond even if it's buried under a dung pile...
Let it ride
Get Rich Quick.
Soooo ... "three to five grand" ... is ... "getting rich" these days?
When you make $35k a year getting $3-5k all at once would be a huge paycheck.
57% of the people don't have $500 in cash in savings, so yeah . . .
Keep it. You don't lose until you sell.
Dave is wrong. DO NOT SELL.
Exactly, that's how I avoided any losses on my Enron position.
Exactly, I still have my Nortel and Bre-X stocks.
That is gambling; not investing.
Line between always not so clear
When you borrow to invest, you magnify your gains when your stocks up. But when the stocks fall, you also magnify your losses.
I had a lender try to coerce me into refinancing and cashing out equity to put into stocks. Couldn’t convince him it isn’t a wise decision.
Why were you trying to convince him? Just say NO.
@Day Sounds like he was wasting his time.
Just wait and past nov just pay interest to wait and sell When it comes back up
I lost nearly everything twice in my life.
Sometimes you have to tough a hot stove twice before you learn you shouldn't touch a hot stove.
Genius man, he should open his own hedge fund.
My way out of this would probably be:
Work out how much I could save from my income before October.
If this is say 8k, then I’d immediately cash out 12k of stock and pay it towards the credit card, then use income to clear the remaining credit card debt before the interest kicks in.
Ouch. I've never borrowed money to buy stock since I've only wanted to risk what I could afford to. With that said, I've made some stupid moves trying to invest a few grand in penny stocks. Guess what? I don't dabble in those anymore!
You better hold cuz..
This was a lot of people during the GameStop mess
1:05 😂