THIS is Why EVERYONE IS GOING BROKE...

Today we are going to talk about why everyone is actually going broke because it has a lot to do with the fact that people are living well beyond their means right now. And unfortunately, it's not a choice for some. Like some people just have to live beyond their means just to be able to survive, whereas others kind of do it on purpose. Others say, well, you know, even though I know I can't afford to go to my friend's wedding, or even though I know I can't afford to go back home for the holidays, I'm going to do it anyways and just put it on the buy now pay later or the credit card and worry about it later. That's kind of like the two different camps we have. We have people that involuntarily live beyond their means and people that have no other choice. And people that choose to do it in order to have a certain lifestyle. And yes, I understand the full irony of the fact that I'm talking about how and why so many people are broke as I'm walking past multi-million dollar mega yachts. But hey, that's part of the uniqueness that I bring to YouTube, I would say. Let's take this woman, for example, who took out $45,000 in student loans. $15,000 of it was federal, and $30,000 of it is private. And since she took out the student loans, she has now paid back $60,000 on just the private debt alone. So more than double what she borrowed. And that's because of compounding interest. I've talked about this before with the student loans. When you take one out, they're very hard to pay off because of how the interest compounds. Now even though this woman is paying back a ton of money with the student loans, she does not regret getting her college education. She enjoyed her experience. She doesn't regret all the friends she made there, etc, etc. But after she graduated college, she did not have a full-time job lined up. So she started doing a different freelance gigs and was really having a tough time making ends meet after graduation. So she ended up having to defer the debt on her federal student loan, which is only $150 a month payment. It wasn't that expensive. But what happened was the interest compounded and exploded on that debt too. So she finally ended up finding a full-time job. She was making $27,000 a year, guys. I don't know how long ago this was, but this must have been at least 10, 15 years ago. Anyways, she's making $27,000 a year, but she's paying $450 per month to her creditors. So every time she would get an increase in salary, she also had more debt to pay back. And then fast forward a couple years later, she had a medical emergency where she ended up in the emergency room. The hospital confirmed that they took her insurance, but there was an administrative mix-up that ended up costing her $20,000, guys. So this is criminal, okay? First of all, the fact that these hospitals can get away with this, they say they accept your insurance. If they make a mistake, they should be eating that mistake. Nobody who was told that their insurance is accepted should be paying for that. But that $20,000 hospital bill would never get paid because she already had money that she owed on the student loans. She already had money set aside that she had to pay in taxes because she's a freelancer, so you have to pay taxes in on your own. So what she decided to do, she's living in New York state, she decided to just ignore the medical debt and try to run out New York statute of limitations and not pay it. Now, she ended up getting a boyfriend who ended up helping her pay off her student loan debt. And she says if that wouldn't have happened, that she probably would have ended up dying with that loan. Imagine that. But here's where the lifestyle choices come into play and what I was talking about at the beginning of this video. You have people who involuntarily live beyond their means because they have no other choice. They just don't make enough money to survive. And then people who are already hurting financially that make more bad financial choices. And here's what I mean. She says, listen, obligations come up. Your parents are sick. You have to go visit them. Okay, give you a pass for that one, right? But, oh, your friend's getting married. You want to go to the bachelorette party. You want to go to the wedding. Then there's baby showers when they get pregnant. Like, yeah, I can understand wanting to be there for those big milestones and events in your friends and family's life. However, if you have to crush your own finances and go into debt for it, is it really worth it, guys? This is what people need to be looking at. Like, I know it's tempting, right? Like, you want to be included and you don't want to be the one that says no to your best friend or to your sister or whatever. I get that. But you have to put yourself first in the sense that if you're already not doing well financially, how in the world are you going to dig yourself out of this hole if you just continue to keep digging? And then there's other small little lifestyle things like, you know, going to the movies or buying clothes or buying plants for your house or, you know, doing little weekend events or food events, going out to dinner or drinks with friends, things like that that ends up costing another $30, $50, or $100 here and there. Like, those are all things that everybody wants to do. There's not anybody out there that says, no, I'd rather not see my friends. I'd rather not go out for dinner with you. I'd rather not hang out and see you. I just want to stay home and save money. Nobody says that in the sense that, you know, they don't care about their friends or their family. People that do that do it out of necessity because they have no other choice. And sometimes it takes a lot of strength and courage to be able to make that decision and sit on the sidelines while everybody else is out having fun, so to speak. I mean, look, we got all these people here on these boats. People are going out taking boats today, guys. If you live in an area like this and your friends invite you to go out on the boat, who wouldn't want to do it? Even if you split the boat, you know, six, eight ways, it's still money that you don't have. And if you choose to spend it anyways, then you're digging your own grave. But I understand where this girl's coming from because she's like, you know, listen, am I really not going to live my life? I'm in my 30s. I need to go on vacation. I'm going to buy some things for myself. I've already made so many sacrifices since going to school and finding work and all of this. Am I really going to say no to these things that are important to me? I understand that. And that's a decision people need to make for themselves. But going back to the beginning and sort of like the title of this video, this is why everyone is broke. It's because too many people are living beyond their means, whether by choice or whether it's not by choice. And the amount of money that people need to bring in these days is absolutely insane because this woman, for example, has a full time job working from 9 a.m. to 6 p.m. and has two side hustles, two freelance gigs on the side. And this is like the most crazy thing here because she's like, listen, I never thought in my entire life that once I was making six figures a year that I would need to have additional sources of income, meaning having those freelance gigs in order to be able to get by. Now, part of the problem is you're living in New York. Obviously, it's extremely expensive. People really need to hustle there to be able to make it. So people have to look at it through the correct lens, right? If you are choosing to live in one of the most expensive areas in the country, yeah, you're going to have to hustle and make six figures and then some in order to be able to just get by. But that's not the case everywhere. Not everybody wants to move to Omaha or Kansas City, you know, and there's nothing wrong with those places, but it just might not be for somebody who wants this particular lifestyle. Also, people in the younger generation are pretty much on the consensus saying that I don't count on ever being able to buy a home on my own unless, you know, you get married with somebody or you have a partner that you're able to team up with and go in on it together with. And part of the reason for that is just the cost to exist, the cost to just live your life normally without doing all these extra things we were talking about is so expensive now. It's very difficult to put aside the proper amount of money for these things. And a lot of younger people are starting to come to terms with their existence like, yeah, I know I'm living beyond my means. I don't care because I still need to be able to experience some of the finer things in life. Otherwise, what's the point? And fair enough, guys, I understand that. I get it. I understand where you're coming from. I'm not going to call you an idiot. You can do whatever you want. It's your life. But just understand that you're going to be the one stuck with the consequences of making those choices, you know, like if you really want things to be better for yourself, I would take the approach that you have to make a lot of sacrifices now so things can get better later. That's what I personally did. And I think it was worth it because now I enjoy the success of making those sacrifices when I was younger and not being able to do much. But because we live in that instant gratification society, a lot of people don't really have the willpower to be able to put everything that's exciting in life on hold. And so we're in this situation where chronically overspending seems to be the default mode for so many people now. Most people you'll talk to out there, they'll tell you right away that, you know, their rent and their housing costs are eating up more than half of their paycheck just from that alone. Not even talking about groceries and car insurance and medical expenses, anything like that. And if you have kids, forget it. You know, having kids and paying for child care is like having a second rent payment right now. Health care costs are also extremely high. It's really just this never-ending cycle of bills. And I can see why people check out of this, why people check out of society. You know, like sometimes I look at homeless people and I just see them chilling there, not doing much, just hanging out. And I think to myself, like, man, you know, as much as their life probably sucks, the best thing about it is they're not sitting there worried about what bills are due tomorrow. They don't need to worry about making ends meet with any of this stuff. They get enough in free services and people throwing them money just to be able to get by, be able to get whatever drugs or food they need. I'm not saying that's the right way to live. I'm just saying that, you know, you look at that and you see how hard people grind today in order to be able to make a decent life and decent living for themselves. And sometimes it just doesn't feel worth it. And part of the problem is social media, for sure. Guys, even somebody watching a video like this might think that, well, just because you're walking through an area like this, Michael, must mean that you are rich. Well, I can walk through this area even if you have nothing, you know, you don't need to be rich to be here. Anybody can just walk through this public park and right across the water here is one of the most expensive zip codes in the United States. If you want to live right down here by South Point Park, where I'm at, yeah, you got to be rich. You got to have some dough, but you don't have to be rich to visit here. But the point is there's no more silent luxury. Everything is in your face. You open up Instagram, you see all of your friends and all the people you follow taking these luxurious vacations to Italy and Bora Bora and Fiji and wherever else they shot the latest season of the White Lotus, you know, different things like that. People fall into the trap of needing to go to these places to be included in the club, you know, to say, I did it, too, and feel like they are a part of it. Nobody wants to be missing out. But little do you know that a lot of these people that are doing this are either broke themselves and are completely maxed out on their credit cards to be able to do it, or they actually are rich because they either inherited wealth, they have a sugar daddy, or they actually made some sacrifices in their life and became rich on their own. Right across the water here is Fisher Island, which is one of the richest zip codes throughout the entire United States. And you do have to be rich to go there. You have to be rich to live there. You have to be rich basically to even set foot there, guys. I've lived in Miami for 17 years. I've never been there. I've just seen it from afar right across the water like this, just like everybody else. I don't care. I'm fine with that. I don't ever even want to be that rich. All the headaches and all the time and energy and hassle it takes to get that rich to me just doesn't seem worth it. But, you know, you could be watching this video and see this and think this is normal. This is how people live. You go on Instagram and you see people going on luxurious vacations and you ask yourself, you know, what am I doing wrong? Why can't I afford that? Well, you're probably doing nothing wrong, just that most people who are doing that probably can't afford it either. But that's how this cycle perpetuates, you see, because the more people kind of take that adoption and that approach to it where, well, I deserve that too. You know, I work hard. You know, I'm doing everything right. How come they get to be able to do this and I can't? I'm just going to do it anyways, even though I can't really afford it. I'll put it on buy now, pay later. I'll put on the credit card. I'll worry about it later. You know, life's too short. That's like the mentality a lot of people take. I know a lot people here in Miami that do exactly that. Or some people even take a lower approach to it where they see this life of luxury that everybody else is living except for them. And they say, well, I know I can't afford that, but hey, I can afford to get, you know, Uber Eats delivered to my apartment tonight. Or I can go out and buy, you know, that brand new designer handbag that I've been eyeballing for the past couple of years. And I can afford that. It's not as expensive as round-trip tickets to Europe and hotels and all that stuff. You see, obviously it's easier than ever to just make a purchase online. You can be browsing for something and then, well, the next thing you know, you see there's a sale, right? There's a Memorial Day sale coming up. It's going to be 40% off, you know? Because then you're like, well, when's the next time I'm going to get that deal? So I might as well buy it now. And you know what? I think this problem is just going to continue to compound and get worse over the years. I think most people are never going to be able to walk away from the temptation to live a life outside their means because it is just in your face 24-7 now more than it ever used to be. Like, I remember when I was a kid, before social media ever existed, the only way you would ever get a glimpse into the lifestyle of the rich and famous is, you know, watching a movie shot in one of these glamorous locations. Or they used to have that show MTV Cribs. I used to love watching that where you get to see the inside of houses of rock stars and celebrities and movie stars and things like that. But that was it. You know, that was your small dose of being overstimulated into what life could be like back then, whereas now it is 24-7. You cannot turn away from it unless you have a lot of discipline and intentionally look the other way. And this is also one of the reasons why I like to talk a lot on this channel about people being financially disciplined. Because no matter how much money you make, you can still fall into this trap. We've talked about this before that there are more people than ever before that make over six figures per year and are living paycheck to paycheck because it's never enough. It's never enough money that you're making. It's never enough in terms of the lifestyle that you can have with the money. You know, you can get an upgrade on the place you live. You can now afford to fly first class instead of coach. You can now afford a new car instead of an old used car, etc. etc. You know, it's never ending. The sky is the limit on what money can be spent on. And people's desire can quickly go from being pretty modest to over the top. So what are people doing instead? They're taking the approach that, well, I might be living beyond my means, but hey, at least I'm living. At least I'm seeing and doing things now while I'm still young. I might die tomorrow and never be able to do or see any of this stuff. And listen, I understand that going back to the way things were when our parents grew up and before we had cell phones, before there was social media and having more silent wealth out there where you wouldn't even know that you have a millionaire living next door because they're driving the same car you are and living in the same house you are. That's the type of millionaire. And they do still exist, but they are becoming more and more rare as the temptations of a certain lifestyle and a certain social status that people strive to achieve becomes more and more the norm. All of this is normalized, guys, even for me, probably because I've lived here for a really long time now. I'm used to seeing all this. None of this impresses me. None of it. I don't care. I don't care how rich you are. I don't care how much your yacht is worth. I don't care how much your wife's tits cost. You know what I'm saying? Like, none of that stuff matters to me. But I've gotten used to it. You know, I've gotten kind of accustomed to the over-the-top lifestyle here in Miami. And I think my wife and I have found a pretty good balance in the middle, you know, where we live below our means and we have a nice place that we enjoy on the beach and we can afford to leave for the summer months when it's really hot and miserable here and go to California, go to the Bay Area, take in those beautiful 70-degree days for a few months, and then come back to Miami once things cool off. That's the lifestyle that I'm enjoying right now, and we can afford it due to all the discipline that we've put in up front. And that's not even a brag. I'm just saying this because, you know, that's still nothing. That's still a very meager lifestyle compared to the people that own these yachts. Let's be realistic, right? The cost of one of these yachts would probably be enough to pay for a lifetime of doing that back and forth trip to California and still have money left over. So by no means is that a flex to like, you know, say, hey, look at me, I'm doing well, whatever. No, guys, it's not. I'm just saying that I personally have found my balance of what I think is a fun and luxurious lifestyle that doesn't cost a fortune and is sustainable for us. You know, I'm not striving to get one of these yachts out here. You know, I don't want that expense. I don't want that overhead. If I ever want to be on one of these yachts, I'll charter one for the day. You know, that's it. Spend a few thousand dollars, you're on it, you'll never have to deal with the expenses or maintenance costs of it. That sounds like a much better deal to me. So maybe that's the answer, you know, as I'm sitting here making this video and thinking about this and how I've kind of grown accustomed to all of this flashy nonsense and it doesn't really phase me anymore. Maybe that's what people need to do instead of like, you know, looking at all these things and desiring it and desiring it. Maybe people need to get like so accustomed to it and so used to seeing it that it just becomes normalized and you don't even care anymore. I don't know if that will work for everybody, but it certainly worked for me. And I would suggest giving it a try if you constantly feel like you never have enough because you always need to have more and more and more because the next guy has more and more. And then if you can do that and you can find that happy medium and balance of a lifestyle and realize that you don't need all of this stuff to be happy, then maybe that's when you can finally start getting ahead and stop living beyond your means and finding a way to live within your means or finding whatever living within your means actually means to you in order to find that correct balance in life. So let me know what you guys are going to do about this if you're in this situation. I'm really curious to know. And if you enjoyed this video, make sure you are subscribed to the channel. And if you don't want to wait for my next video to come out, check out this one on the screen right over here and I'll see you in the next one.