Daren Reacts To Bad Internet Money Advice

DANO WEIR: Are you ready?

DANO WEIR: Yeah Because I got something different today.

DAREN BLONSKI CFP®: Looks like a tee box, Dan.

DANO WEIR: It's not a tee box.

DAREN BLONSKI CFP®: What is it?

DANO WEIR: It's the internet.

DANO WEIR: And today we're gonna go inside the Internet. When I open this The Internet's gonna come out.

DANO WEIR: Full of crazy, ridiculous out there financial. Are you ready?

DAREN BLONSKI CFP®: I'm ready.

DAREN BLONSKI CFP®: Oh, it is a tee box. It is a tee box.

DANO WEIR: So you're gonna give me a hokey effect there. I think I just broke it.

DANO WEIR: Financial confidence for your hip pocket.

DAREN BLONSKI CFP®: Money is really just energy.

DANO WEIR: Thanks you're checking out, it's all money.

DAREN BLONSKI CFP®: So damn, why am I looking at a tee box?

DANO WEIR: Welcome to It's All Money. I'll answer your question in a moment. Inside the Sonoma Wealth Advisors conference room on the Sonoma Square. My name is Daniel Weir. I'm the Marketing Director for Sonoma Wealth Advisors. This is our life and finance show, talking about where your money and your life intersects with your finance. Wait, I know, yeah, I think I got it lined up here, right.

DANO WEIR: Talking about where life and finance intersect across across one another and helping you build a little bit of financial confidence so you feel empowered to make a more formed informed decision and today's episode is a reaction episode. It's for everyone who's been on their phone doom scrolling at God knows I am, and they don't have a CFP sitting right next to them to say no, that's a really bad idea.

DANO WEIR: So I see these things all the time. They're on all the social platforms and I go, man, I really wish I wonder what Daren thinks about that. So the purpose of today's episode is to show you some stuff I've found on the internet that's in and around money and to see what Daren thinks about it.

DAREN BLONSKI CFP®: I do like the shows I've seen where they like they show the person watching it. I think there's like a CFP out there. You showed me this example of this gal, Rachel Camp, I think it was and so Rachel would like look at it like. So we can do that you have to show like the exaggerated.

DANO WEIR: You can do whatever you want. You can do whatever you want.

DAREN BLONSKI CFP®: All right, first up.

DANO WEIR: So this is from a show called Hard Knocks which follows NFL team in season. This is from a couple of years ago on the Cleveland Browns.

SPEAKER 3: Who here knows what compound interest is? This is real. Financial advisors are everywhere, OK? They'll take your money and they'll take 1% of everything you got like, Oh, it's 1% doesn't matter. I know it matters. It matters. It matters a lot because if you learn this yourself, you can make a billion dollars.

SPEAKER 3: We got a lot of money right now, right? This is the easiest equation to make you rich. You have a million dollars and after 7 years of getting 10% on every single year, OK, you're making money off of it. You're gonna double it after 7 years. So you double your money every 7 years for 42 years, you get 64 times your original money.

SPEAKER 3: So you got a million dollars, you can end up with $64 million by the time you retire. If you don't turn that. Listen, Miles has got $30 million. Ok, so let's say, let's say so hold on, I'm anxious again. So you telling me bro, it's crazy. I swear to God, I think that's enough.

DANO WEIR: So it's that easy, right? Yeah, it's that easy.

DAREN BLONSKI CFP®: Yeah, there, there's a space in between like the 10 million and 64 million of a whole lot of emotional decisions being done correctly and this is no offense to the NFL, but. I know it's known, it's known that there's financial issues for a lot of players and I also don't think that like becoming a great NFL player doesn't.

DAREN BLONSKI CFP®: Mean you know how you have good emotional control and regulation, right? Like that's typically a different skill set you develop somewhere else along the line because typically being in the NFL there's a lot of aggression coming out, right? So our human brains are literally wired to do it wrong, right?

DAREN BLONSKI CFP®: So that 10 million to 64 million means that you have 1 million to 64 to 4, whatever, I don't. I'm given the benefit of the doubt. A whole lot of decisions had to be made right along the way, right? And so he says, all these advisors are gonna take percentage that's true they're gonna get paid for a job.

DAREN BLONSKI CFP®: Like, do you feel bad paying someone to do a job? Like you go to the NFL, make a lot of money like they're there to help you, good adviser, and even Vanguard the home of the do it yourself, people say, hey, advisors actually give you a roughly 3% benefit every year and the biggest benefit is helping you make good decisions.

DAREN BLONSKI CFP®: Today we're sitting in this conference room. It is Wednesday, May 14th, 2025. We just went through a big dip in the market that all but recovered in about a month, right? A whole lot of people when we first dropped wanted to sell everything and one of the things we did as advisors was help people stay in place.

DAREN BLONSKI CFP®: So you could be successful and so when I look at that, I see that's great you can play these numbers and say wow you can do it all yourself but the reality is our brains are not wired to do it right and you need somebody, maybe it's a buddy even or not a financial advisor to help correct you when you're wrong and you want to make bad financial decisions.

DAREN BLONSKI CFP®: So having a coach, an adviser, a partner, I don't care what it is, all of us need help and all of us need points along the way where we check in and make sure we're not making a mistake. And that's I guess where I push back on this guy like, yeah, Fancy math, good job, dude you did math, but what happens between $1 million.64 million, a whole lot of right decisions, a whole lot of right investments.

DANO WEIR: And also presuming just 10%, just 10%, just 10%, which is coming from where, you know, presumably from an index fund, but unless sometimes that's a negative, you know, I mean it has happened, it's not common, right? It's allegedly that. But I think what I, what struck me is one, the really good thing about it is that they're talking about it.

DANO WEIR: I think that's great. I think it's really great to be talking among your peers, even at work about, you know, getting your money right. I think that's terrific. Leading with an expert sucks speaks to probably they do get hit up by brokers who are are there to prey on them. So I feel that.

DANO WEIR: But just because you've met a few bad professionals doesn't mean there's the right one and a great one out there for you. And to just presume, hey, I got this, I studied this for a couple hours or I don't know how long he studied. If you studied longer, he might know that 10% assuming that every single year is a fallacy.

DAREN BLONSKI CFP®: Well, right, and I think that's the other thing that this generation in particular, and I'm not trying to. Be biased towards age, but those guys look like pretty young guys. Chances are they haven't really lived through 2008. They didn't live through 2001 as investment. I gotta get out. I gotta get out.

DANO WEIR: It feels totally natural.

DAREN BLONSKI CFP®: Get out.

DANO WEIR: I gotta, I gotta get out now. You said 10%, right? And then all of a sudden and now you don't know what you're doing, right?

DAREN BLONSKI CFP®: There's an entire generation that's never been through a true down market. The current generation has never been through it.

DAREN BLONSKI CFP®: So unless and if you look at like if you invested top of the market in 2001 or the top of the market in 2008, it took years to make your money back, years, and you telling me you're gonna be patient if you're in the NFL and you're getting hit up constantly by the life insurance agents and they're like, here, buy this, buy that, I'll give you a guaranteed return blah blah blah blah blah. We've all seen on TikTok.

DAREN BLONSKI CFP®: That you're gonna sit tight and say yeah I'm OK not making money for 3 years you're not gonna do it right and so the advisor is gonna help keep you in place and that's where when guys come at it that way it's just disingenuous it doesn't really speak to the reality of investing and how difficult it actually is to stay put when the markets are volatile.

DANO WEIR: I rolled up my sleeves it means we're getting serious. We are getting serious it's getting hot in here, but we started with what are we.

DAREN BLONSKI CFP®: Getting the football one. So I mean that was pretty serious. But now we're going to Bitcoin.

DANO WEIR: I gotta, I gotta, I gotta butter you up early, OK? This is a this is a new Bitcoin ad I just saw from Coinbase.

SPEAKER 4: Every day the Fed prints an average of $465 million. That's 26,000 shipping containers a year created out of thin air.

SPEAKER 4: Maybe that's why the dollar loses value over time. But there's one thing they can never print more of Bitcoin. At the size of a quarter, this is all there will ever be. Shouldn't a store of value hold its value?

DAREN BLONSKI CFP®: All right, so here's the number one thing I can tell you as an investor. That if you follow this one piece of advice, you will do far better in life. And that's when any marketeer is using fear to sell something. You should hold your wallet.

DAREN BLONSKI CFP®: And that's the first thing that pops out to me in that, right, is that there's fear and they're using fear of like, hey, the government's going to print all this money and then the only way to really truly store value is Bitcoin.

DAREN BLONSKI CFP®: I can make that argument and I don't necessarily disagree with that argument. Let me be clear about that. But from just a consumer standpoint when they're using fear, the world's going to implode. The only store of value is Bitcoin. That's a little bit of an exaggeration.

DANO WEIR: I'm surprised that your response here. I thought you're gonna get hyped. I thought you're gonna get hype on that.

DAREN BLONSKI CFP®: No, no, so there's there's people called Maximalist when it comes to Bitcoin that it's just all about Bitcoin, but for Bitcoin to truly be the only store of value, you have to accept that the entire economic system as we know it implodes, completely implodes. So Bitcoin is important. It's an important asset.

DAREN BLONSKI CFP®: It's an important diversifier. It is the front end of the risk curve, and it's important to be, I think in portfolios, but it isn't everything, man, like it just isn't like I don't think it's nothing and I don't think it's everything. What that's telling you is it's the only store of value. I. Disagree with that.

DANO WEIR: I think that 32nd ad is the best depiction of the printing of money and inflation in the last 10 years, in the last 20 years that so made it so clear. That they are making some of this just not some of this, it's just out of thin air.

DANO WEIR: It's just 26,000 shipping containers worth of cash invented. Well, there's so it it it it I'm not necessarily feeling the pole to go buy Bitcoin, but what struck me about that ad was just understanding visually what the printing of money really feels like and looks like.

DAREN BLONSKI CFP®: I, I think the best. Discussion I've seen on it that is so stark is it 60 minutes to this interview where they had Jerem Powell on there and this was right during the heat of COVID and when they started printing money like crazy and buying investments and all kinds of crazy stuff, right?

DAREN BLONSKI CFP®: So they asked Jerem Powell like how are you printing money like you just adding things in the computer and he's like yeah we just had zeros. And it's that easy. Somebody somewhere has a key that just adds a 0 and that prints. The problem with that is it works until it doesn't, right?

DAREN BLONSKI CFP®: Eventually if there's too many dollars out there they're no longer scarce and if we don't have the guns in the military to back up the dollar is the reserve currency, then it's no longer the reserve currency in history throughout time we've seen reserve currencies come and go throughout time and some would argue the dollar is on a downslide and that's where Bitcoin does come in potentially to fill that gap.

DAREN BLONSKI CFP®: The problem is what if it's not? And our job as investment professionals is to help you manage your risk first and foremost.

DANO WEIR: I'm so glad you said risk because that's the next reel. It's one of only two football related reels on here, so don't, don't bristle that I brought up football again. This is, this is the owner of the Dallas Cowboys, Jerry Jones, who you may recognize, talking about what he calls tolerance for ambiguity.

SPEAKER 5: There's a concept called tolerance for ambiguity. I love it. I've always loved the name tolerance for ambiguity. Some people do not function at all if they don't know for sure they're going to get their check on Friday and it's Monday. They have to have it. They are not good. They are not good singers.

SPEAKER 5: They are not good, whatever their skills are, they aren't good. Some people are brilliant when they don't know what their check is going to be. That's the Mississippi River boat gambler. They're at their very best. They're glib, they're charming, they're entertainment, and they tear their ass up.

SPEAKER 5: And they're the ones that don't know they're gonna get the check. The tolerance for ambiguity, the tolerance for unknown that will bring out that gambler or that in you, is not for everybody. Some are just a born with, they can live with some risk and live with the unknown and, but by the way, the ones that will tell you that have had a lot of days when they've been sitting there with this phone and this.

SPEAKER 5: And been told your little ass just hit a dry hole. And that side's sinking and this side over here you're talking got your voice upbeat trying to talk old Joe into going in a new deal with you at the same time you just I'm I'm in.

DANO WEIR: Just so you know.

DANO WEIR: So he, he made his money in the oil business, right? So the reason why I share that reel is I just saw it recently it was from a show that that announcer Joe Buck did called Undeniable, undeniable.

DANO WEIR: I thought that artist articulated risk tolerance so perfectly. That there are some people that if there are investors there are employees who that if they don't know certain ending, they're not gonna be able to walk that path and there are other people who go, oh yeah, I'll take some of that, you know, that that felt like it really laid out what risk tolerance was.

DAREN BLONSKI CFP®: Yeah, if you think about how our mind works. All of our minds on some level.

DAREN BLONSKI CFP®: We create patterns, right? Like our brains are wired to create patterns, understand patterns, understand predictability. That's why the the psychology of living. Is so much more.

DAREN BLONSKI CFP®: When we live a pattern in our life and a and a process in our life, we all do better, right? And. When it comes to investing, it comes to anything in life, if we know what the outcome is, then we're gonna feel more emotional comfort. And when you think about what we really do as advisors is we help clients understand that they're going to be OK.

DAREN BLONSKI CFP®: That's what we do and OK. Effectively what we're answering is. It's gonna be there's ambiguity to it, but if these factors align you'll be OK and that's what you do as a financial advisor that's what a financial plan is that's what investment management is it's we're managing risk to help people get to a destination financially the mind craves stability all of our minds do is part of survival, right?

DAREN BLONSKI CFP®: That's why we have families. That's why we create patterns in our life. That's why we drink the same drinks and eat the same food because we need that to feel psychologically safe.

DAREN BLONSKI CFP®: Whenever we disrupt the patterns of day to day life, we feel less safe.

DAREN BLONSKI CFP®: Some people more than others, have a more stringent pattern that they need. The way financial products get sold to people is by selling on that fear of ambiguity, right?

DAREN BLONSKI CFP®: So if you talk to, and this is really true in the life insurance business and you can hear it a mile away when you start talking to a life insurance agent because they'll start talking about guarantee and if you just do this blah blah blah blah bla blah blah blah blah, fill in the blank and they they play on your emotions of fear and ambiguity to give you security.

DAREN BLONSKI CFP®: And things won't change because of this and in return, they're going to make large profits on your fear, right? And so that fear is manipulates a lot of buyers in the financial services world. So to the degree you can tolerate more ambiguity. In a thoughtful and measured way, you're going to do better off in investing.

DANO WEIR: And understanding, I think. This is something I've learned understanding who you are, being really honest with yourself, is if you can say, hey, I'm the person that needs the certainty. I bought a CD it's gonna pay me 4.12%. And in 6 months, it will pay you 4.12%. And you're not mad about that because you go, I'm a person who craves security.

DANO WEIR: I got exactly what I wanted and not going back to your adviser and going, why are my returns better? That CD is never ever going to pay you 30% ever because you sought that security.

DANO WEIR: But if you can know who you are, then you can at least be satisfied, you know, you you you can't be dissatisfied with with the end results. You're like, well I'm a person needs security. I sought security. I got security done. And I, I think that can help you in investing.

DAREN BLONSKI CFP®: Well, and we see this with investors all the time and we're interviewing potential clients and we're not we're gonna onboard them to our firm. One of the things we're looking for is if they have realistic expectations of risk versus reward. And we see what happens with some people is that they want all the reward but none of the risk.

DAREN BLONSKI CFP®: Don't we all? We all want that but it's an impossibility like it doesn't, it doesn't truly exist. If it does exist, it's because there's some type of BS in the system that's making it be. Perceived that way, but you have to take measured risk to get measured reward.

DAREN BLONSKI CFP®: And we call that actually there's a name for that and that's the efficient frontier in the investing world. And so and if an investment is not on the efficient frontier, then there's something going on with it. It's the risk is not in alignment with the reward or the reward is not in alignment with the risk.

DANO WEIR: To income trap.

DANO WEIR: This is from a show called Last Meal with Tom Nash.

SPEAKER 6: The creation of the double income household was one of those changes which went from being an option to an obligation. The principal beneficiaries were government who had twice as many people to tax, OK? Property owners, because now you needed two salaries to buy a house. So the option of running a household on one salary basically disappeared.

SPEAKER 6: The unit of the household, the family, lost 35 hours of discretionary leisure every week with no commensurate increase in living standards because the money got soaked up by property prices and by taxation. And that obviously what I'm not suggesting is that women remaining at home while men go out to work or anything like that.

SPEAKER 6: I'm simply saying that there are many, many things that start as an option. And then they become an obligation, they become an imposition. I think that's a really interesting point, which is that what economists are trying to optimize in terms of GDP style and you know, and tax revenue doesn't necessarily translate into an optimal quality of life.

DANO WEIR: This concept blew my mind because I never we would look at California real estate property prices and I'm not necessarily saying this is the only reason but what he says here is that basically since you've suddenly got two people who are working, there's more taxes that the two people working somehow influenced and infused house prices to go up, property prices to go up.

DANO WEIR: And then prices go up, that, that is, is he wrong there? Does that feel? How does that hit you? I mean, I, there's also a famous clip from the 90s. Elizabeth Warren, the senator has a book on this called The Two Income Trap where she basically was saying this thing like 30 years ago. How does that hit you and what do you think about that?

DAREN BLONSKI CFP®: Well, I, I think it's created a lot of our sociological problems, and that's not saying again like he was saying that male or female need to stay home, but the reality is in order to survive in California now, we've all have to, you have to have to, you have to like you have to have two income if you want to live in a reasonable house, right?

DAREN BLONSKI CFP®: So there's this trap that's saying, oh, by us all working, we'll have extra money, but all it really does is raises the paralysis of homes. It's the next level of it, right? So we all collude to create it, right? The problem is it's kind of a somewhat similar to the idea of a prisoner's dilemma, right in the old the idea that should this one prisoner talk.

DAREN BLONSKI CFP®: If this prisoner talks, then talks before this prisoner about what happened, then maybe they'll get a reduced sentence, but this one doesn't know if this one's talking it's sort of the similar kind of thing where it's like we're both saying I'm working to get ahead but then they say no I'm gonna work too and then before we know it we're still where we were at from a lifestyle perspective, right? And that's been.

DAREN BLONSKI CFP®: I think what you're seeing and it's creating a lot of sociological issues because and this was our last episode where we talked about Social Security and the issues with Social Security where the birth rates just fell in half and got cut in half because now all of a sudden people are not having kids, right? And then now that's creating societal collapse. And the Social Security systems are upside down.

DANO WEIR: And all people were trying to do were pursue their dreams or try to keep up and try to pay a bill and you know it's, it's, it's fascinating. It's it's money and it's economics and yet it so becomes life and it so becomes way, way bigger than that.

DAREN BLONSKI CFP®: Well it is and I just think it's so interesting that.

DAREN BLONSKI CFP®: We don't often know in life like if I take this step, what the the actual outcome will be down the road and that's part of the genius of life and the challenge of life is to figure out if I do this then this you don't always know what the outcome is gonna be that's part of risk and the last video ambiguity and dealing with the ambiguity.

DAREN BLONSKI CFP®: And so much of society and community is colluding together to create an environment that we think is better for ourselves, but maybe it's not and that and I think that's the dialogue that's playing out politically right now what is better for the community what is better for everyone in general and he's right on like the reality is everyone just started working and we're now we just don't get time with our kids and family and our loved ones because we're all working.

DANO WEIR: And I wanna say this really explicitly here as we conclude this video. Anyone should be able to work, anyone should be able to stay at home.

DANO WEIR: Anyone should be able to do whatever they want with their family, but I, the whole point of that video is maybe there shouldn't be an expectation of anything, one way or another or another. Yeah. Right now this is, we got, we got Jordan Belfort, the Wolf of Wall Street. His thoughts on CNBC.

SPEAKER 7: It bothers me and I have this big thing about CNB singing there and and and and how they basically all like. Worst thing that could ever happen to the average investor because if you watch the CNBC, you'll think you can trade in and out of stocks short term and make money and the fact is that the scientific academic studies going back to 1900 that says it's virtually impossible to make to beat the S&P.

SPEAKER 7: But if you watch the show, you'll think that's the best way to trade, to trade go from oil into into crypto, from crypto into tech stocks, from tech stock into comma and then and you're not gonna make money that way, right? So that one investment is the S&P, and I wrote the book.

SPEAKER 7: I think when I wrote the book, the SP was like 3800, now it's 5000, right? I also said Bitcoin is a good investment, but small, like 5 to 10% of your portfolio, right? The largest should be, I think the S&P. And at the time it was 22,000. Now it's 73,000, but that doesn't like the fact that I was right is irrelevant because it just as easily could have been down in one year.

SPEAKER 7: In other words, you can't look at investing as a one year proposition. And when I wrote that, I said, listen, Bitcoin right now is 20 something, I think it's going higher, but it could be going lower, but I think in 5 to 10 years from now, it's massively higher. And the S&P was 3800 and it might go to 3600, maybe it's at 400 I think we go to 5000, it's at 5000 plus now.

SPEAKER 7: So I looked up like a genius, but that's not true. It could have easily been down. So you, you can't invest and worry about the price the next week, the next month, or even the next year. I believe the best way. Especially people in their 30s, 20s, 30s, 40s, even 50s, right? You have to take a long term horizon and and rely on what's called compounding.

DAREN BLONSKI CFP®: So there's a couple of things there, Dan. So he's absolutely right when we talk with clients we're like, hey, we're not evaluating investment returns on a year over year basis we're looking at a 5 year. Run with money that's how we look at it, right? Because anything less than that would be improper.

DAREN BLONSKI CFP®: This is another thing that he didn't say, but I think he alluded to. I think early on in the evolution, right, it used to be when people want to buy investments they'd have to go to their broker and their broker would sell them a bond or a stock and then they created these things called mutual funds and then index funds and say why am I paying these brokers money?

DAREN BLONSKI CFP®: I should just be able to buy it myself and I think at first Wall Street was like, oh, time up, you're going to give everybody access to the markets like that means they don't have to pay, pay the past go.

DAREN BLONSKI CFP®: And I think early on, a lot of the financial infrastructure was like, well, we're not doing that because we need to be able to charge commissions to buy stocks and bonds and mutual funds. And then I think Wall Street got smart. And they said, you know what, we can make a lot more money if we just let people who think they know everything play on the table, right?

DAREN BLONSKI CFP®: If you don't need a guide at the casino guy, just come to the casino, spend your money, and the more you play, the more money we get from you, right? Lot of large numbers. So what's happened now is, you know, you got these all these different, you know, my phone, I can trade on my phone in a second, pretty soon I can just speak into the AI say buy this stock, sell this stock.

DAREN BLONSKI CFP®: I'm sure that's coming. And the reality is that just creates more velocity of money. So velocity and slowing velocity is the secret to getting wealthy is bringing in more money before it goes out so you slow the velocity of money.

DAREN BLONSKI CFP®: But what's happening is we've created this whole culture of people who just think they know what they're doing and they have no stinking clue that then the Wall Street world just sits there and prays on them and cleans out their account and the longer you play, the more likely you'll lose and.

DANO WEIR: You never hear those stories. Well, there's that survivorship bias there's that I only crow about my wins and I never tell you about my losses and this is. I mean, we've talked about football already. That's football betting, that's everything. And so what he's talking about here, we've been when we were going through the April crisis.

DANO WEIR: You the repeated message we had on our other show on the markets, check it out here on this channel, which is more market focused market news focus. The repeated message you kept saying was, hey, stick with your allocation. Hey, stick with your allocation.

DANO WEIR: Long term it's gonna make sense. And I kept thinking like, what is a way I can explain stick with your allocation and I think I got it and this is what he's saying here you're driving from Petaluma, California to Disneyland. What a great trip. You're gonna take I-5.

DANO WEIR: You're gonna take I-5. Many, many people watching have done that drive, and we've all seen that car. That's starting in and out of traffic, cutting people off fast, slow, slam, tailgate.

DAREN BLONSKI CFP®: Because for those who don't know, I-5 has two lanes on it, right? So anytime you hit a truck, everyone has to slide over and so everyone slides over fairly organized except for that one or two cars that runs up to the truck, cuts everyone off, runs it and so everyone's hitting the red brakes the whole 600 Miles Disneyland.

DANO WEIR: So, so for that car who's doing that, there's a chance that they're going to get to wherever they're to, to Disneyland if they're going there. Faster But every time they make that move, they're taking a risk. And the risk that they're taking is not just that they're gonna be slower than they were, is that they're gonna crash and completely blow up versus Darren and his family.

DANO WEIR: In my minivan in your used SUV and you stick in the right lane and you cruise and you make a couple moves and you see the moves coming right and it's slower but you're gonna get there you're ensuring you're gonna get there from.

DAREN BLONSKI CFP®: A probability standpoint right you very.

DANO WEIR: Well, still could get hit, right? That, that to me is, is, is what he's saying.

DAREN BLONSKI CFP®: Yeah, it's it's, it's thinking prudently about your allocation and writing it through the market volatility and that's what's going to help you be more successful.

DANO WEIR: This is very common and it's specifically G Wagon. I don't know if Mercedes is paying people to do this or what. But many, many people make reels about their little real estate thing and the end result is a free G Wagon.

SPEAKER 8: Thatch, how can I afford a $200,000 G-wagon? Let me show you model. Here's an example. I bought a fix for $365 recently. s me $7000 to rehab it. I'm all in for $435. He lenders to put 20% down with $87,000. That's my down payment.

SPEAKER 8: You got a pay out there I done for $625. That's a 30% margin. When you get 30% margin, you get your down payment back. My new loan is $435 all in property tax insurance. I pay $30,000. I rent it out for $3500. I make $500 for a house. For these, get you the car.

DAREN BLONSKI CFP®: So I saw this stat the other day that most luxury goods are bought by middle and poor class people. Most Which I thought was rather interesting. And I can promise you if that's your strategy and you're buying a G-wagon. The next recession we hit, you're gonna be getting rid of that G Wagon for half of what you bought it for because it's probably not gonna go well for you.

DANO WEIR: So he took a hard money loan with like $87,000 down and then with the loan rehabbed the house. Then it looks like he got a new loan somehow and then and.

DAREN BLONSKI CFP®: Then I'm gonna have to do that one again because I don't even know what the heck he was saying half the time. All I know is that. He's playing games with money so that he can't so he can afford something he shouldn't be affording in the first place.

DANO WEIR: What is the problem with playing a game like that whether you understand it or not?

DAREN BLONSKI CFP®: It's not sustainable. Like why? Because it only works until it doesn't.

DANO WEIR: When does real estate not work when we hit recessions and people can't afford the rents or something happens to you and you can't afford to make whatever payment, right we've seen it so many times we're in Sonoma, California, it's a small town.

DAREN BLONSKI CFP®: We see it all the time when we see people come through town living big living large.

DAREN BLONSKI CFP®: I can't tell you the number of times we've had people come into our office that the rest of the population would look out and think they're very wealthy and we look at their balance sheet and we look at how money flows in and out and they're just broke at a higher level and they're stressed out because money's just moving in and out but it's because they can't say because they're driving the G wagons because they're trying to keep up with the Jones.

DAREN BLONSKI CFP®: Chris and I actually both drive used cars.

DAREN BLONSKI CFP®: Chris and I could afford a non-used car if we chose to, but the reason we do that from a principle-based standpoint is living below your means and we feel like if you don't live below your means, you can't preach it to other people and it's way more cost effective to own a used car than it is to go out and buy a sweet jig wagon brand new, and that's just the reality and, the people buying those things, I would say 5% of them tops should actually be buying them.

DAREN BLONSKI CFP®: The rest should not be buying those cars.

SPEAKER 9: Bursting money myths part two, apparently you need to have 3 to 6 months' worth of savings for your emergency fund. Yeah, right, with 10% inflation, do you think that's a good idea? Why not just invest that money into an index fund and let it grow over time? And if anything ever were to happen, just use that for emergencies instead. So he's.

DANO WEIR: Saying, he's saying put your emergency fund. Into an index fund, yes or no.

DAREN BLONSKI CFP®: When do you need emergency funds, Dan? Right away, right away.

DAREN BLONSKI CFP®: When people most often need to use emergency funds is when they lose a job. Statistically when you're more likely to lose your job in a recession or in a growth expansion in a recession so statistically you're more likely to need emergency fund and what happens typically in recessions is markets go down.

DAREN BLONSKI CFP®: So if your money is in index funding you're more statistically likely to need it when the market goes down, that's when you're gonna be pointing it out.

DAREN BLONSKI CFP®: And so the issue here is that an emergency fund is set aside so that you have money in the event of losing a job that's what it's for or something happening where you, it's an emergency but if your money's in an index fund, you're more statistically likely to need it when things are rough and things aren't good so it doesn't make any sense.

DAREN BLONSKI CFP®: So we always tell people put emergency funds in boring investments and I don't know if he knows this but money markets are paying more than inflation at the moment.

DAREN BLONSKI CFP®: At the moment.

DANO WEIR: All right, let's do the last one.

DANO WEIR: Writing off my private chef.

SPEAKER 10: I can't write off a private chef, but if I invite somebody over every single night to have business meetings with me and I hire a private chef to cook the meals, I can write off the private chef and the food that went into making the meal.

SPEAKER 10: This is how I'm able to afford having that private chef every single year, every single month, every single day inside of my house making me and my wife meals along with my friends, family members and my business clients who also some of my family members sit on my board of directors.

DAREN BLONSKI CFP®: So this is one of the classic traps, spending money to create a write off. Right, and I see a lot of this from business owners like, oh, I need more write-offs. I got to spend more money and I'll just buy things in my company, but you're still spending money.

DAREN BLONSKI CFP®: Right, so spending money to get a write-off is usually not a good idea. Now, if he really wants a private chef and that's how he's trying to do it, I think the IRS pull issue with how he's doing it if they really audited him. And question whether or not it's a true valid business expense, especially if he's creating a video about it, tell everybody about it.

DAREN BLONSKI CFP®: Yeah, I mean, OK, I'm gonna tell everyone how I might be breaking the rules. I don't know if he is in that case, but if I'm an auditor, I'm gonna say no, I think not every night is for business, not a great idea to advertise on social media.

DANO WEIR: I had a I was trying to find a new CPA a few years ago and I had one recommended to me and He goes, OK, well you work at home and I had a side business and you know, to that I was, I did have a home office. Great. The first thing we're gonna do is put your kids on the payroll. How old, how old are they?

DANO WEIR: I went, I'm sorry, what? Oh yeah, your kids are gonna work for the business they'll be your employees, and he had a full explanation of why you could put your kids on your side businesses and all the deductions and how that would help you. And what I have come to learn about tax deductions and writing things off.

DANO WEIR: You can write off anything until you're audited, until you're audited. That's right. So you can have all these videos and all these things you have to have this whole trilogy in your head, this fantasy narrative of why it all makes sense until you sit with an auditor or until they do whatever it is that they do and they're going to tell you what actually is the case.

DANO WEIR: That's right. And so it then it becomes so when you hear about things like this and if you're wondering, it's incumbent upon you to go. I'm, am I taking a risk right now or am I playing it safe? And that's the decision you have to make.

DAREN BLONSKI CFP®: Yeah, I mean, all too often we see this with business owners they're writing everything off and they make the assumption just because they got away with it that they're gonna get away with it. So just because they got away with it they're gonna get away with it is the assumption there and that is a fallacy.

DANO WEIR: We'll look at the internet today we survived.

DAREN BLONSKI CFP®: We did, we did a little bit of brain damage, but that's OK rot kids kids call it brain rot. Ok, that's right.

DANO WEIR: All right. Thanks for checking out the show. I hope this was helpful. I hope it gives you a perspective on. Little talk back to the internet. It can things can seem a certain way when you're on social media and it can all seem so easy. Oh, they're doing it. I should do it too and hope today can show that working with a professional perhaps can change that opinion in that narrative.

DANO WEIR: This content was produced by Fermaa Advisors LLC, and SEC registered investment advisor, DBA Sonoma Wealth Advisors. The opinions expressed by Fermata Advisors LLC on this show are their own. All statements and opinions expressed are based upon information considered reliable, although it should not be relied upon as such.

DANO WEIR: Any statements or opinions are subject to change without notice. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategy. Investments involve risk and unless otherwise stated are not guaranteed.

DANO WEIR: Information expressed does not take into account your specific situation or objectives and is not intended as recommendations appropriate for any individual. Viewers and listeners are encouraged to seek advice from a qualified tax, legal, or investment adviser to determine whether any information presented may be suitable for their specific situation. Past performance is not indicative of future performance.