The Real Cost of Staying in Debt

Episode Introduction

Steve Rhode: Hey, welcome back to the Get Out of Debt Guy’s show. I’m Steve Rhode. The old maybe wise, I don’t know. We’ll figure it out.

Get Out of Debt Guy. I’ve been around for a long time. Been doing this since 1994 before some of you were even born. So, and with me as always is Damon Day.

Say hello, Damon. He’s the new, fresher, Get Out of Debt Guy who will be around long after I am gone. When you say the wise, or sometimes you say decrepit, I always think of the farmer’s commercial or he’s where what’s the, what’s the thing he goes. Um, uh, we know a thing or two.

Well, that is true. I’ve seen, I’ve seen more of my share of things or two. That’s for sure. Well, Damon’s going to carry it, carry the torch after I’m gone.

So Damon, we’re back this week talking about debt as usual. And I’ve, I’ve got to admit, it’s been a tough day for me because, you know, it’s tough in the debt world. People don’t really know what it’s like to be a consultant like you and like me and research all this stuff. Sometimes it’s, it’s depressing as fuck.

And sometimes I just feel like I’m a septic tank cleaner, you know, just in there all the time. Just, Oh my God. I try my best not to be a Debbie Downer. I mean, it’s not, not, I, I enjoy talking to clients.

I mean, that actually picks me up. That kind of, you know, my batteries. Yeah, that, that’s, that’s the recharge part, but the, just the week after week of this, what’s going on in the economy and how people are just drowning. And I almost feel like we, well, I not feel like we do.

We repeat so much of the same stuff that reoccurring themes on these podcasts, but it’s just like, shit gets worse every week and every week. I feel like I’m like running around going, you got to get out of debt because this is happening and this is happening and this is going to screw you. And so this week we have another week of shit. I did a bunch of research since the last podcast, because I was really curious.

This is a problem that I have been unable to solve since I started helping people in 1994. In fact, the funny thing about it is I had the answer to this problem in 1995. I figured it out way back then, but here’s the problem. How do you get people to wake up and, you know, do something about their financial condition before they get hit in the face?

So the problem is this, what I came up, the conclusion I came up with in 1995 was I might as be, I might as well be trying to host a herpes club. Cause nobody wants to join the herpes club and nobody wants to pay attention to, you know, credit, debt, money, all this other stuff that we talk about. Until they’re in a deep panic and honest to God, all the research I’ve done on this over the years, how, how can I get people to be more aware? How can I get people to want to know more?

There is, there’s just no good answer. Well, my buddy Casey has a saying he’s, he’s fond of, and he goes, everybody has a plan until they get punched in the face. And I’m like, you know, that applies to a lot of areas of life. Like, Oh, my plan is just to keep rolling over at 0% and then bam, they get punched in the face, you know, people are losing their credit lines.

And yeah, no more offers. And they’re like, Oh my God, everything’s going to 28%. What do I do? And now, I know, you know, you mentioned the herpes club, but you said you had an answer to this because I don’t have an answer because most of the people that call me have gotten punched in the face.

I don’t know how to get them to say, Hey, you’re going to get punched in the face next year, let’s talk about it now. Here’s the funny thing is, I told you I was doing a bunch of research. So actually it was yesterday or the day before that I went to a chat GPT and posed the question, I’ve got this great email list to get out of debt.org. And I’m publishing actionable stories that people are going to want to know more about.

And I’m going to publish them. And I’m publishing actionable stories that people can, you know, read current events, take action on now, but I cannot grow the email list. And to summarize what chat GPT came back and said is, why would they want to join? That’s basically what it came back and said.

Well, well, if chat GPT can’t fix it, I don’t know what can, because I just found myself over the last week, our house has basically gotten entirely redecorated. Oh, your wife, my wife’s been walking around the house, taking photos and all of a sudden in our hallway, I have a little, there’s a little, I don’t know if you call it a bench thing, but there’s three old books that got stolen out of my office and they’re stacked with a little fake candle on top of it. And I was like, this was like a couple of days ago and I walked out and it looks cool, but it was like, I was like, huh. And then I see my wife, she’s taking photos of the couch.

Oh, we have a new couch, by the way, that came in yesterday. We got this new couch on Amazon, $17.99, big, huge, U-shaped couch. My wife said all the like furniture stores, these types, these were like $4,000, like crazy, and that couch we had that it’s replaced is like old school. We’ve had it for 10 years.

It’s gone through three moves and I agree. It was about, you know, about getting time. Um, but, but it, the couch literally came in like 15 boxes. Dropped on the driveway, 15 boxes.

Nobody Joins the Herpes Club: Acting Before the Punch

She put it all together and it’s a really nice couch for like $17.99, but she’s kind of, she’s taking pictures of every nook and cranny and then based on, then, then ChatGPT links her to the Amazon links for the pillows and this and that. And we have, uh, essentially, uh, and my wife’s really good at decorating, but she’s using ChatGPT as like a, I don’t know, an advisor, I guess, and we’re getting a whole new ChatGPT makeover. Look at your closet, your wardrobe got a ChatGPT makeover. Yeah.

But she’s doing it very inexpensively for what it looks like. It costs a lot more than it actually did because everything has gotten from, she got these other things. I don’t even remember what they were now, but she was telling me yesterday. They looked really like high end, cool.

Like, wow. Like cool, whatever, you know, for like a, you know, an accent or something in there and she goes, dude, to move, I’m like, sweet, that’s my kind of redecorated. I mean, here’s a, here’s a good ChatGPT moment this week. So, um, you know, I’m building these things or making these red things.

Uh, anyway, so I’ve got a bunch of products that I’m making and learning CAD and 3d printing and all this stuff. Are you ready to announce that yet? I didn’t want to like, let that out. I don’t know if I’m going to announce, announce it, but anyway, as part of that, as part of that, um, I needed to build an electrical component as something that I’ve never done before, uh, circuit boards and transistors and resistors and all sorts of stuff.

I have never done that before. I’ve never owned a soldering iron, none of that stuff. So I went to, actually I use Claude primarily, but I went to Claude and said, look, this is what I want to accomplish. Can you give me a shopping list for all the components I need to do this from Amazon?

And it did generated the shopping list and I ordered all those parts. And then I said, I have never done this before in my life. I don’t know what I’m doing. Can you give me a step-by-step guide?

And it gave me a picture of each part that I ordered and a picture of it and told me exactly which post to connect, which wire to, and it’s, it’s like five pages, but it’s step-by-step and it’s just amazing. Yeah. So it’s crazy. It, AI is coming, man.

Um, yeah. So on that depressing note, I, you know, I really don’t want people to be depressed. I want people, if I had a magic wand wave, I would want our listeners to carry forward the message to other people that, you know, there is hope. There are solutions.

There are answers. Uh, these two guys, primarily Damon, can, can get you through this shit and, you know, you don’t have to give up, but, uh, I, I hate screaming about this stuff every week. Well, not having enough money every month is depressing. You know, going to IHOP, taking your kids to get some breakfast and it’s $120 is depressing, you know, struggling to make all your payments is depressing, but you know, what’s not depressing is having all that debt gone and having cash.

Cash in the bank makes you smile. Debt. Yeah. Well, right now we have a problem where what used to be the American middle class is it can’t, yeah, they can’t hang on.

They’re losing the grip on the edge of the cliff and they’re sliding over slowly. But here’s a problem that’s been going on ever since I’ve been involved and that is, uh, farming in America. I remember way back in the beginning, I had somebody had a client contact me who was a farmer. We are farmers.

See if I did that back into the beginning. Yeah. I thank you. I’ll be here all week.

So way back in, you know, 94, 95, somewhere in there. Um, I had somebody contact me who was a farmer and I said, well, you know, there must be a solution to the farming crisis because farmers were going, you know, broke in the late 1980s and early nineties. They’re just going belly up. So anyway, somehow I got, oh, I know.

Uh, I got connected to like the American pork farmers association or something like that. And I told him I’m looking for somebody to interview about, uh, how to run a successful farm. And they went, oh, we got just the guy for you. This guy’s a rural farmer.

He’s killing it. Ooh, that’s a bad, that’s the bad analogy. Um, anyway, he’s doing great and we really think you should talk to him. So that’s great.

Put me in touch with him. I’m talking to the guy and he’s painting this big rosy picture. And I said, well, I, I think that’s it, Bob. Uh, that’s all my questions.

He goes, okay, Steve, can I ask you something off the, off the record? And I went, okay. He goes, I’m dying here. I can’t make it, I’m drowning.

And, uh, you know, this has been a problem that’s been going on for a long time. And we’ve heard about the plight of the American farmer and it is getting so substantially worse. And this is why I think it’s important for people who are listening right now is because as farmers drown and go under the price of food and everything else is only going to go up because it’s consolidating under just a few companies. Now, here’s the reality today, and this is why people shouldn’t feel bad.

And this is why last time on the last podcast, I used an analogy about a farmer who plants his crop and it doesn’t rain any, he goes bankrupt. Does that make him a moral failure? You know, it just, just means it didn’t rain. It’s just math.

It’s just weather. But the median American farmer right now today, as you’re listening to this, the farmer in the middle of all farmers is negative every year, negative $1,500 a month, they’re, they’re losing money. Every farmer below him, uh, is, is negative and isn’t even breakeven. So half of American farmers are potentially not going to survive.

I mean, they’re struggling, they’re collapsing, and this is why the farmer’s suicide rate is three and a half times the general population. Yeah. And it’s, it’s, it’s, you know, and I said the same thing, right? Cause I haven’t looked at into any of this stuff until you brought it up in the article and what I said was, well, what can anybody do about it?

The American Farmer Crisis

And you’re like, well, you know, the average person listening to this would be like, okay, that really sucks. I feel bad for farmers, unless of course there’s a farmer listening to this. But like you said, it’s, it’s something that’s just, it’s happening, right? And costs are going up because Steve, who’s, who’s, who’s, who’s benefiting from these farmers?

Well, I, so I did a whole bunch of other research on a second story because, because, um, the last thing I wanted to do was say, you know, I’m a victim and this is all against me or some sort of conspiracy theory, that’s, that’s just not my style, but I wanted to follow the money and my, my, my, my, my, my, my, my research came up with seven groups who profit when American farmers go broke and it comes down to the seed and chemical and equipment companies, the institutional land investors, large corporations, and even you mentioned it, Bill Gates, um, who, you know, is buying up all this farmland and there’s a reason why, and then they rent it back to the same farmer who wasn’t making it before. And then of course the banks and credit systems profit significantly from, um, people who are trying to borrow money to stay in the business. You know, if you look at just the seed and chemical companies, for example, there’s really only four of them, four major companies that control 60% of the global commercial seed market and 76% of the global, uh, agrochemical sales. And so they can really just set their own price.

And then when it comes to farm equipment, I mean, have you seen, if you don’t know how much like a new tractor is or a combine or something like that, a combine that you might only use two weeks a year is three quarters of a million dollars. You know, how, how are farmers going to afford that? Because since 2020, uh, farming costs have surged like labor has gone up 47%. Two thirds of farm labor, uh, used to be transient workers, you know, who we’ve been getting rid of and there’s no big long line of American high schoolers that want to go out there and work in farms, fertilizers gone up 37%, it went up a hundred dollars a ton just because tariffs, chemicals are up 25%, seeds are up 18% and farmers are making less.

Now, this is what blows my mind is we all need food. So if these companies, if these seven companies, these are making more and more money each year and farmers are going under, then there, there really has been no like political bailout, uh, of farmers to fundamentally change the way things work. And so, I mean, I’ve seen it now for too many decades. I don’t think there’s going to be a solution.

And I. No, well, the politicians are getting, they’re getting way too much money and pressure from the companies that benefit from this. So there is not going to be a bailout. And, and it’s like, why are we talking about this on this podcast?

Well, the reason is, is just, this is almost like a microcosm of, you know, this is not something that, oh, well, if I turn the corner next month, the food prices are going to start coming down. Like this is, this is the new reality that prices in America are not, they’re not going to get back to where they were. They’re, they’re, they’re going to go, they’ll go up and down, but overall, they’re going to go up, up, up, up. They might come down a little bit, but they’re not going to, you know, you’re not going to see houses, the prices they were in 2011 again, you know, in terms of federal reserve notes, we all call them dollars, right?

In terms of dollars, just because of inflation, you’re not going to get 2011 prices again. Things aren’t going to get better. So it’s like we talked about last week, you know, Shawshank, you got to get busy living or get busy diet. You know, the middle class is going away.

It’s not going to change. You got to get into assets. You got to get your money into something that’s going to at least keep up with the devaluation of the dollar, but you can’t really do that if all of your dollars are going to service debt from yesterday’s goods, right? So you got to step one.

I was actually just on a call with, with, with the lady and we were having a conversation about, you know, should you have a hire of a financial advisor for, you know, investing and things like that. And we were talking about, yeah, it’s important to invest, but you also have a whole bunch of debt right now that you’re, you know, eventually going to be paying 25, 28% on. So while investing is important and you should do it, you’re not yet at a level where you need somebody to be managing your money, you may be investing with some of these apps, Acorns, things like that to get things going, but a vast majority of your focus needs to be getting rid of the debt, however, you need to get rid of that because it’s hard to justify throwing all your resources at investing when on the, the other side of the equation, you’re paying 20%. But it shouldn’t be all or nothing, right?

You can get into an inexpensive money market Dow index fund and start just even 25 bucks a week, just start putting something away, like through Betterment or Acorns or, you know, any other sort of platform, just don’t go all in. Yeah. But the former middle-class listening to this right now is like, I don’t have any money to invest. So the problem with that thinking, and I, and I get it, I know, you know, you, you think you don’t have any money to invest because your bank account is negative every, every single month.

You’re getting deeper and deeper into debt, but that’s, that’s the problem. I mentioned earlier, um, you know, I made a joke about going to IHOP and it was a hundred bucks in your family or whatever. And no, I’m exactly right. Cause you asked me how I know.

Well, I just did a post a few weeks ago about how IHOP is one of the restaurant chains that has raised prices about 40%. Yeah. I mean, it used to be able to get the rooty tooty, fresh and fruity, $2.99. Like what happened to that?

Like I want the $2.99 fresh and fruity, bro. But, but here’s, here’s the problem is, and Steve, this is our favorite word. What’s our favorite word on the podcast? Hyperbolic discounting.

Hyperbolic discounting, because we go to the restaurant, we want to take our kids, it’s Sunday or whatever, and, you know, have, you know, the pancakes or whatever. And it’s 120 bucks and you go, Oh my God, $120. But you know, it didn’t cost $120 cause most of us are putting that on credit cards. And I know this is the old song and you’ve heard it a million times.

And here’s the Dave Ramsey spiel. No, it’s much worse than that. Because you think of it, okay, it’s 120 bucks. I don’t have the cash.

I’ve got credit card debt. That’s a problem I’m going to solve next month or the month after, or whenever you think you’re going to solve it, but you never will, it just rolls over. Until you draw a line in the sand and make a decision to do things different. It’s never going to change.

It’s just going to get worse. That’s why we’re talking about this farmer stuff and food product, because it’s just going to get worse. Everything’s not conspiring in a conspiracy type of way, but everything is sucking more and more money from your limited pool, but you go to IHOP, you put that on a credit card because you have to, because you don’t have enough money in your budget and you know, you’re going to pay some interest, but in your head, you’re just like, well, it’s 120 bucks that sucked. Well, no, it wasn’t because it’s going to go on a credit card that you’re been rolling interest on for years and years and years, because when’s the last time you had no credit card debt, probably longer than you can remember for most of you listening to this.

Who Profits When Farmers Go Broke

And so let’s just say it takes you five years to pay that off. You make a decision, you’re going to Dave Ramsey your way out of this, and you’re going to pay that off in five years. Well, that’s going to cost you not 120. It’s going to cost you about 224, according to chat GPT this morning.

And you’re going to pay about $3.70 a month at 28% interest and pay that off in five years, and it’s going to cost you 224 bucks. Now you start to get into the hyperbolic discounting here, where you go, you thought you paid 120, but you really paid 224, but it’s so much worse than that, because what you never think about is the opportunity cost of if you just for did not go to IHOP that one time, stayed home, made some pancakes, eggs, just that one time, made that one different decision, and instead you took that $3.74 a month, doesn’t seem like a lot, but acorns can find that hiding in your change every month. You took that $3.74, whatever it was, over the same five-year period, now you’d have $300 in your investment account, right? So instead of nothing at the, at the end of five years with nothing, but a meal five years ago, you’d have $300.

And then you think, well, yeah, okay, $300, but wait, there’s more. Again, with the hyperbolic discounting, because now let’s say you’re 40 years old, you made that decision, that one decision, one morning just to go out to eat, fine, what if that $300, you just left it in that money market, you know, left it in that investment, left it in the S&P 500, whatever you have invested in, Vanguard mutual fund, whatever. Do you have the math here in front of you? Okay.

I do. And, and you just left it in there for the next 30 years until you decided to retire. Uh, average returns, 8%, $3,000 for that one meal. And this is where we always talk about hyperbolic discounting, right?

Because that one decision, and every day we make tons of decisions that cost money, tons of decisions. The one decision to go to the restaurant or not go to the restaurant. And of course it was, well, but food costs, you know, money at home too. Yeah, I get it.

You can, you know, argue semantics if you want, but it doesn’t cost $120 to throw some cereal in front of your kids that morning or whatever it’s going to be. But it’s not $120, it’s $3,000. And here’s where hyperbolic discounting comes in, which is, we tend to put emphasis on how things make us feel today, not what’s going to, what this decision is going to do to us or affect us in the future. This meal cost 70 year old you $3,000.

And here’s what I can guarantee you. If that was on the table, if that was on the table, if that was on the table, that was on the menu for the price. And your family happily marched into IHOP and you sat down, you got your water. And you looked at the menu and go, this is going to cost $3,000.

You take your free waters and walk out, you would not spend $3,000, but we do it because we just think 120 and 120 is a lot. We just need. And that’s not even what it actually costs. We just need a, like a mental break.

We need to treat ourselves to going out. Now I just read a story about, um, top chefs saying, where is the best value for money when buying beef? And the places, no, the places were Costco, Sam’s club, Publix grocery store. There were, there was five.

Um, but I was at Sam’s club this morning and we got some really nice ribeye steaks for $14 a pound. You imagine going into, you know, any sort of even mid-level steakhouse and what they charge you now for a ribeye steak? Yeah, it’s crazy. And it’s, and I’m not sitting here saying don’t ever go out, right.

But I’m saying these little decisions are what add up to you eating dog and cat food at 70, because these, they seem insignificant in the moment, but if you just start being present and aware of what’s going on, think about it like this. Let’s, let’s, let’s take it to just, you’ve got $2,000 a month that you’re spending on credit card debt right now. Doesn’t matter what the things were that you purchased. Doesn’t matter.

You can’t change that. It’s about doing better moving forward. You’re spending $2,000 a month just trying to service credit card debt thinking, oh, maybe I’ll get a bonus. Maybe it’ll be different.

Maybe costs are going to go down. They’re not, when are you going to get out of this credit card debt? What are you waiting for? What do you think is going to happen?

That’s all of a sudden going to allow your, without you consciously making a change. What is going to be different next month? What is going to be different next year? That’s going to allow you to actually start making some profit.

Yeah, and how are you going to make up that lost time? I’m paying this $2,000. Yeah. Now, you know what $2,000 would be?

According to chat, GTP, GTP, GPT. If you file the chapter seven bankruptcy or settled the debt or Dave Ramsey, I don’t care how you get out of the debt. Sometimes I do, depending on how bad your strategy is. You can’t budget yourself out in these situations.

Not, not in these times. Not when, not when you got Bill Gates controlling all the farmland. Was it 225,000 acres he owns? $275,000 or something, according to your article.

But there’s only so much you can cut out of your life. And honestly, there’s only so much you want to cut out of your life. You know, Dave Ramsey’s get 18 roommates idea sucks. Like that sucks.

Like, I don’t know about you, but my family would be like, what are we doing, dad? Who’s living in that room? Who’s my new roommate, dad? Yeah.

Oh, we needed the extra $900 a month. So George is going to live with us. But if you got yourself out of that, you made a decision to do things different. Right.

And there’s lots of options, but you have to figure it out. You can’t just, the status quo, just continue. It’s hoping it’s going to, that’s the most expensive option. That’s the most expensive.

Not making a decision is the most expensive because you are making a decision. But if you took that two grand a month and just said, you know what, my debt’s wiped out. I filed a chapter seven or whatever. Now I have $2,000 a month.

You put that in an investment account, a retirement account, and you’re 40 years old. By the time you’re 70, average return, 8%. Steve, you have any guesses? Load.

The $3,000 Pancake: Hyperbolic Discounting

Well, I have the number in front of me. It’s $3 million. $3 million that you’re giving away every month. That’s what it’s costing you not to get out of the debt.

So when you come to me and say, well, my credit, I’m going to go $3 million. Is your credit worth $3 million? And you’re going to go, no, it’s not. Thanks for changing my perspective.

You know, how can I free up my cashflow so I can save it now? Since I’ve known you, like 20 years, I’ve always said the same thing. And I would love to know if you can remember what your reaction was way back then, when I told you the first time I would tell my clients to write the, their 80 year old selves a letter about what kind of cat food they wanted to eat. Yeah.

I mean, I use that all the time now because I’ve told it to you. Um, it, it, it is, but you know, when you’re 70 and you like, just think about that, you can make some different decisions since it’s obviously more than just one, I’m not going to go to IHOP, but you start making some different decisions, some conscious decisions, knowing how much this stuff is actually costing you, knowing the true cost of carrying consumer debt month after month, after month, a lot of this stuff we talk about is out of your control. You probably individually can’t do anything to help the farmer directly. Maybe.

Right. But what you can do is help your family. You can see, I see what’s coming. I see what’s going on.

I see as tight as things are now, they’re probably going to be tighter next year. So what can I do? What decisions can I make? As Steve said at the beginning, before I get hit in the face.

Well, you just said something very important, which was you may think that you don’t have any choices right now, but the reality is you do, you could change your financial situation today in one fell swoop, you could make a fundamental change and move forward, protecting yourself and protecting your future, protecting your family. And yet people don’t do it because they’re held back by the Dave Ramsey’s of the world or the, you know. It’s, it’s always the fear of the credit score. It’s the fear of, I don’t, my security blanket is my credit score.

And look, every situation is different. And I’m not, and I’m not Dave Ramsey esque in a point where I’m like credit doesn’t matter. I, it’s a hell of a lot easier to navigate life with great credit. I, I’m a guy, I’m going to admit that.

Right. But there’s a cost to that is, is having great credit or decent credit worth $3 million? And when you ask people that, is it worth a million? Is it worth a hundred thousand?

Is it worth 50? Eventually you get to a number where you might say, yeah, it’s worth that. Right. So you have to assign a value to that good credit score.

And you have to just be honest with yourself. What am I going to use this credit score for over the next 24 to 36 months? And how much is that worth to me? And if you’re paying more money to, to, to service that debt, then that score is worth to you.

Are you making the right decision? Is protecting the credit score more important than adding $3 million to your retirement portfolio by the time you retire? Well, I know it seems way off in the distance and again, hyperbolic discounting, so that damn pancake sounds more important to me right now than $3 million, you know, but eventually you’ll probably get there unless you die before that, which is not what you’re hoping for, right? So don’t be the guy that’s gets to 70 and goes, well, I wish I would have made some different decisions with my money because now I realize how much all of those things cost.

And again, I’m not saying you have to deprive yourself. That’s Dave Ramsey. Dave Ramsey will tell you to start a corner top ramen. Yeah.

Like I’m not a proponent of that. I’m also, you know, looking at, we only get one go at this life. I want to also enjoy it. But if I live to 70, I also want to enjoy that too, right?

So you got to kind of, in my opinion, you got to kind of walk that fine line, but if you’re carrying debt right now, you need to make a different choice. You’re making the wrong choice. But Damon, I’m able to make the monthly minimum payments. I must be doing okay.

No, you’re doing the exact wrong thing. If you have credit card debt, you can’t afford the lifestyle that you have. That’s it. You’re overspending.

You’re not, you know, there’s lots of reasons you could get in debt, medical debt, whatever. But right now, if you are carrying credit card debt at 28% interest, you know, that’s dumb, you know, it, you don’t need me to tell you that’s not a smart thing. So why are you doing it? The reason you’re doing it is because you don’t know how to get rid of it.

You don’t know what you’re afraid to do it. Guess what? Or no, usually they just don’t know. And because they’re afraid because they don’t know the options.

Right. But here’s the good news. I know all the freaking options. Yeah, you do.

I can help you get out of the debt. You know, I use this analogy on a call. I was just on with a client, you know, you’re going on a hike and you come across this dark cave and it’s scary and you don’t know what the hell’s in there. And that’s why it’s scary.

Cause you don’t know what’s in there, but I come up behind you and be like, Oh, Hey, how’s it going? Click, put a flashlight in there. Oh, there’s nothing in there. It’s only goes back 20 feet.

Nothing in there at all. No big deal. I show you the path. There’s nothing there.

Why You Can’t Budget Your Way Out

Oh, I’m going to go explore it. Now you’re not scared of it anymore because you have a plan. You see, there’s nothing in there. That’s going to hurt you.

You can do it. That’s why people are stuck. That’s why people carry debt because they don’t know a better option than the option that they’re choosing, which is consciously or not, you’re choosing the worst option, carrying debt month to month to month is the worst. Mathematically, it’s choosing a hundred percent.

So you mentioned at the very beginning of this podcast, you know, it’s like, we keep saying the same stuff. How do we get people to pay attention before they get punched in the face? I think we just have to just be as blunt as possible. Like you’re doing it wrong, bro.

You’re doing it wrong. Here’s a flashlight. Let me show you some other options. Well, this is why I took a, I don’t know, was it a year or two off from writing?

Cause I needed a brain break. This just sucks you down. Yeah. But see, I get the yin and the yang with that.

Right. Cause I get, I don’t, you know, I’m not like heavy, deep into the research and what’s happening to the American farmer and all that kind of stuff. That’s not my day to day. Right.

So I, I get, I see all the negative stuff. I see what’s out there. I get it from you. I get it from the articles, but I also get the recharge when I’m able, like the call I just had right before the podcast, it was a great call.

And I went over a lot of the stuff with her and she was just like, Oh my God. And she’s like, so excited. I was saying a couple of things that she hadn’t thought about. And then it was like, she saw the light, like there is a path.

I’ve got options and I can see it. And she got, and she got excited about, about, Oh my God, I can finally put together a plan because she’d just been struggling day after day after day, trying to keep everything afloat. She’s like, I’ve never missed a payment before. And I just hit her right back with it.

The thing that you’re, the thing that you think is your goal is the thing that’s standing in your way. And we need to take a step back and look at this different. And when we take a step back and we shine the light in the cave and we look at it different, it’s like, and I showed her exactly how we can start getting her savings cash in the bank that she hasn’t had for so long. She got excited.

Like, this is so exciting. This is awesome. I’m like, I know. And that’s what gets me going again.

I was able to take what she felt like was like an impossible situation, shine a light in there and go, Oh my gosh, this is so awesome. She just stumbled across our podcast. And I was like a month ago and you know, she had a lot going on. So she just scheduled a consult for today from like last month.

And she’s like, I’m so thankful. I found you, blah, blah, blah. She’s like, I can’t even remember the name of your podcast, but I’m so glad I did. So I told her, I was like, well, that’s the get out of debt guy show.

You know, get out of debt guy podcast, pretty easy to find, but, but that’s what really gets me going is being able to help people kind of take a step back from their preconceived notions and show them different options and lay it out. So they can see, Oh, that is the path. I can see a path there and I can see it’s going to get me to where I want to go. And you know, it, it, it gets rid of those preconceived notions of I’ve never missed a payment.

And I’m not saying when you call me, I’m going to say you have to miss a payment, but sometimes that’s the right answer. It’s, you know, you’re throwing $2,000 a month at this debt, month after month after month, and you’re foregoing $3 million. Why? Well, and people don’t have a good answer to that.

You’ve got to ask. And before I forget, before I forget, that’s, that’s why you got to ask. If you want to get in touch with Damon, you can reach him through his website. Damon day, D-A-M-O-N-D-A-Y.com.

Don’t worry. I’ll wait for you to pull over. So you can write it down. Damon day, D-A-M-O-N-D-A-Y.com.

And Damon, when they go to your website, besides seeing a just beautiful, professionally laid out website, um, put it together with AI, they can schedule, they can reach you. And then, uh, it can lead to scheduling a free call with you. Yeah. And guys, it’s just the more options you understand and know the better.

And the biggest takeaway you’re going to get from that call is I am going to challenge you. I’m going to challenge. And again, I’m not here to tell you do this or do that. I’m going to open your eyes to some paths that you’re maybe aware of, but it’s very muddied, right?

It’s very muddied out there. And I’m tooting my own horn, but these damn debt relief companies do not do what I do. Bankruptcy attorneys don’t do what I do. Debt settlement companies don’t do what I do.

Credit counseling companies definitely don’t do what I do. There ain’t no counseling going on there. You know, Dave Ramsey, financial advisors do not do what I do. I’ve been doing this, what, 25 years now, people don’t do what I do.

I don’t know why, cause what I do makes sense, but they don’t do what I do. And you, you don’t have to take my word for it. You ask yourself, ask yourself the same question. Did anybody else do what Damon just did?

The answer is no. But that’s why the lady I just talked to got super excited when she got off the phone with me. Well, it’s like, because nobody, but it’s like, you know, when I would talk to somebody and say, well, here’s what I want you to do. I’m going to give you some homework.

I want you to call a debt settlement company, a credit counselor, a bankruptcy attorney, and then I want you to come back and let’s have a chat about it and they came back and everybody was trying to sell them their widget. Uh, but what was the plan that was best for them? And nobody out there except for you, uh, really does that. Yeah.

Which is why it’s refreshing. Cause it’s, it’s like, huh? Cause I always tell clients, look, the way we’re going to find the right answer for you, and it’s different for everybody, it could be a Dave Ramsey-esque type of a path. It could be a bankruptcy.

The Flashlight in the Cave

It could be a settlement strategy. It could be lots of different things, right? Have you seen anybody that can budget their way out of situations that we see today? No.

Very rarely, but I was going to say, if you’re very high income still, if you, if you’re high income, yes, you can do it with some sacrifice, but, but here’s what I always tell clients. And it’s not my position or place to say you have to go bankrupt and you have to do this, but what I always tell clients is, look, we’re going to find the option that you dislike the least, because I always say, look, no matter what we do, you’re not going to like it. You’re not going to like it. It’s going to be different.

It’s going to involve sacrifice, whether it’s a credit score sacrifice, a lifestyle sacrifice, there’s the way you’ve been living for whatever reason is going to have to change a little bit, whether that’s your credit scores dropping, you’re going to, you know, George is going to move into your house. I don’t recommend that, but you know, something’s going to change. So you’re going to dislike what we have to do, which is why you haven’t done anything, which is why you’ve stayed the status quo, but the only way to know what is right is to look at everything. And you say, I really hate that.

I hate this a little bit less. I dislike that, but not as much as all this other stuff. Right. But the only way to know that is to look at everything.

So why doesn’t the debt settlement sales, they don’t want to lose the sale. They don’t, they don’t want you to look at something else that might not be what they have. Right. So everybody’s got their own professional bias where they want to just convince you that what they have and what they get paid for is right.

Same with me. I, I’m a professional too. I have bias. Clearly.

If you listen to the podcast, you know, I have bias. I think I’m fucking awesome. I think you are too. Very biased advice.

But here’s, but here’s the difference. I’m getting paid to be a consultant. That’s what I’m actually getting paid for. I’m getting paid to show you all these options.

You’re getting what you’re paying for. These other guys are not getting paid to help you figure this stuff out. They’re getting paid to convince you to do it. Yeah.

I just wrote about a, uh, it’ll be up tomorrow. A debt settlement company that was sending out emails to veterans talking about how, if they didn’t contact this number, that they were going to lose their veterans benefits. And of course that number led to, you know, a sales wing of a debt settlement company that was trying to scare people into buying their, their solution, if you need to fool people and scam people into buying something that they don’t need, that’s not a financial advisor. I think, I think we need to branch out with our, our business model.

I think what we need to do is have like a hotline. We need to set up a hotline. Okay. And the idea of this hotline is going to be, if you get any, anything in the mail at all, any kind of a phone call, anything, anything, anybody that you don’t know, calls you or sends you a letter, you call our hotline.

And when you call our hotline, we’re going to have a recording that just says, yeah, it’s bullshit. And that’s it because it’s bullshit. I mean, when’s the last time, just think about this. When’s the last time you got an unsolicited phone call or a knock at the door or a letter in the mail?

And it was like, so awesome. Like, oh my God, this is like the greatest thing ever. I’ve just been offered this opportunity, this whatever. When?

When is the last time you took advantage of something unsolicited and it worked out like it was supposed to work out? Never, never. Everything’s bullshit. So that’s, that’s my idea.

Just people call, it’s bullshit. Oh, thank you. And if, if you don’t want to call the hotline, uh, you can, you can go to getoutofdebt.org, scroll to the very bottom of any page. You’ll see all the free tools.

And there are a couple there that can help you decode what this thing is that you just got really quickly. One is the scam-o-meter, right? I’ll have you. It’s more eloquent, the scam-o-meter is more eloquent than it’s bullshit, but I can sum it up for you.

It’s bullshit. Um, one of my favorites though is the contract decoder. Because when you get contacted by one of these companies, if you say to them, Hey, this sounds great. I would like to see a copy of the contract that you want me to sign.

They are going to tell you, no, they’re going to hem and haw. They’re not going to want to provide it to you. Because if you feed that into the contract decoder, it’ll show you exactly how you’re getting screwed. Yeah, but these are so complicated.

If you don’t feed it into something like that, it’s very easy, especially when you’re stressed and you don’t know what to do. I just wish I, I have so many conversations with people after they’ve hired certain companies. And we started going through it. We look at it and we go, this doesn’t make sense for you.

Especially if you’re on- Oh yeah, the 87 year old on social security that I had come into my chat, uh, and, you know, say that they were enrolled in this debt settlement company for two years. Yeah, my gosh. I, it’s just, those are the ones that really get me going. Um, if, you know, if I can give you one piece of advice, it’s completely biased, but if you’re considering hiring some debt-relief company, just call me first, I mean, I’ll get to give you some different perspective and then if you want to go hire the settlement company, that’s fine, I mean, whatever, but at least, at least you’ll have a different perspective and to my knowledge, I don’t know if anybody’s ever hired a debt settlement company after talking to me.

Maybe they have, I don’t know. I don’t hear back from everybody after I talked to them once, but, uh, I think it’s very unlikely because I’ll point out some, uh, Captain Obvious type of things that the salesperson doesn’t point out and you’ll go, huh, yeah, that actually makes a lot of sense. Yeah. I’m glad you mentioned that.

Cause, uh, this doesn’t sound like as good of a deal as I thought it was, you know, but again, you might listen, it’s just my opinion. I’m just some guy, right? Everybody’s got an opinion. You know what opinions are like.

Well, neither you nor I want to tell people what to do, but we want to provide them with the information so that they can make a fully educated decision. Yeah, which is, you know, the way to go about it, especially when you’re dealing with a lot of debt. But again, at the end of the day, I think the theme for this podcast is if you are carrying consumer debt and you’ve been carrying it for a while, you are doing life wrong, we need to change it. And there’s no time to change it.

You can’t fix, you can’t fix what is already happened. You can’t fix that, but we can do better moving forward and just continuing to carry this debt because of, well, I feel an obligation or, um, you know, whatever it is, or my credit score is the holy grail or whatever, I will give you a different perspective. I will give you a path out of the problem that you have, out of the stress that you have right now, it’s still your choice, whether or not you want to walk down that path. But I, I at least will shine the light on that path for you and show you there is a better way, multiple better ways than just continuing to carry debt month after month after month, because you’re costing yourself potentially hundreds of thousands, millions of dollars by not taking action.

Well, one of the things I always used to say is, uh, you know, look, you’ve been struggling for the last five years, trying to pay this off. You’re not out of debt. Uh, and you’re still struggling and things are getting tighter. The only thing you’re doing is trying to repair the past.

Wouldn’t it make more sense to repair the future? And of course everyone agrees with that, you know, so let’s do that. But then the old hyperbolic, no, I can’t do that. I can’t do what would people think?

You know, I can’t do that. All right. Yeah. You do you again, you know, you can, you can bounce off, bounce your fears off of me and I’ll push back if it’s warranted and you can take that for what it’s worth, right?

Spotting the Scams — and Wrapping Up

And I, I’m sure I’ve talked to people and told them they’re, what they were thinking is not a good way to go. And they thought I was wrong, but they never called me back because they were like, there’s a big button there. Cause we’ve both had clients like this. You know, I have the client who took my contact information and shoved it in the bottom of her purse.

And then 10 years later, when things got really bad, you know, she pulled it out and contacted me. It’s like you, you know, you’ve told the story about the 10 year old client that contacted you and their situation was the same, but the numbers were much bigger. Yeah. Well, the situation was worse, but their perspective had changed because they’d grown 10 years and realized that path was a very expensive 10 years.

And they realized that what I told them 10 years ago was the right way to go. And then they called me back and we did exactly what I told them we should do 10 years ago. And she was out of debt and I think 18 months or less. It was like 12 to 18 months.

We were completely done. And we’re talking to multiple hundreds of thousands of dollars. Oh, she doesn’t even want to know how much she wasted that she could have invested over that decade. Because it was, it was a couple hundred thousand dollars that we had to deal with, which would have been millions in retirement and because it was the idea of we’re going to settle the debt and she couldn’t get past that idea of missing payments in order to gain some leverage to settle the debt.

Now she wasn’t a client of mine at the time. It was just one phone call we had where I was throwing out some ideas. She wasn’t ready to, you know, to not only not to act on the idea, but just to get when clients hire me, they hire me for information to hire me, to be a consultant, to help them walk through this stuff and once in a while it always kind of makes me not, not laugh, but I’ll send out an engagement letter to somebody that needs to hire me or should hire me and I’ll get a written and I’ll say, Hey, I hadn’t heard back from you like two months, you know, a month later, whatever, I’ll send a text like, Hey, I hope things are going well. I never heard back from you after a call, which is fine.

If they don’t get back to me, I don’t hound you. Trust me. I don’t have time. Um, if you call, if you have a consult with me and I don’t hear back from you, you might get one text just to check in, but yeah, but other than that, you won’t hear from me.

I don’t, I don’t have a followup system. What the hell is that? I don’t, I don’t have time, but sometimes they’ll respond back and they’ll go, yeah, I got the engagement letter. Um, I’m just not sure what I’m going to do.

All right. And I respond and I go, that’s fine. But remember, that’s why you’re supposed to hire me to help you figure out what to do. So people kind of get confused because they’re so used to, um, you know, like getting a sales pitch or something like that, where it’s like, Oh, they’re trying to get me to hire them to settle their debt or whatever.

And they’re like, I’m not sure if I’m going to do that yet. I’m, I’m different. You’re hiring me to help you figure out what to do. And if you, I like it when people say, I can’t make a decision.

Well, you know what? You just did. Not making a decision, but again, that’s one of the reasons you hire me to help you get through that paralysis of analysis so you can get the information you need so you can make that decision. Cause every month you don’t make a decision is another month you lost two grand or whatever you’re spending.

You know, I do have to say, uh, as we wind this up, that my ask Steve chat that I have on the getoutofdebt.org website, when I read those chat transcripts and I realize, you know, how people come out the backside of those chats with actionable information they didn’t have before that, that does make me feel better. It’s just researching all these stories to just, I mean, the episode, the title for this podcast should probably be, you know, farmers are fucked. Yeah. But, but keep in mind how it relates to you.

You know, listening to this stuff, cause this is just one little thing with the farmers, right? And it’s, it’s all, it’s just, it’s, I don’t know. I don’t have a crystal ball, but it’s not just going to all get fixed by some magical policy or anything like that. And prices are going to come back down and it’s going to be 2019 again.

And the current income that you have is going to be enough. You know, that’s what people are missing. They, they’re getting so frustrated because they’re like, yeah, like my income is the same, my lifestyle hasn’t changed, how come my credit card debt is now a hundred thousand dollars? Why is that?

I haven’t, I’m not doing anything more than I was doing five years ago. I’m in fact, I’m doing less, but that’s because the economy is passing you by. You’re still trying to trade time for dollars. You have a job or whatever it is, and you’re not getting enough dollars to cover the increase in expenses or the inflation, if you want to call it that.

You have to have free cashflow so you can get into assets that will keep up with the economy, you’re not going to be able to earn your way ahead. 10% of the population owns 90% of the stock market. If you’re not in the market and you’re not having your money work for you, and you’re just struggling making it month to month and you’re paying interest and you’re limping along and what will my payment be? This is why you’re going to be poor.

Yeah. And, and, and you can’t say I don’t have any money to invest. You do have, if you have a job, you do have money. You’re just giving it to Chase and Bank of America and Citibank and American Express every month.

You’re choosing to give it away. And if you’re choosing to give it away because you don’t know what else to do. Give me a call. I’ll show you some other options so you can take the money that you already have and allow it to start working for you to at least keep you afloat in this economy.

All right, Damon, on that note, I will see you. You know, none of this was scripted. This was all ripped off the top of our heads. Hopefully it came out okay.

It’s good, honest advice. That’s for sure. I woke up and had no idea what we’re going to be talking about, but I think it was good. Right.

I mean, it’s pretty in your face. Like it’s simple, in debt, get out, simple. You don’t know how, call me, done. We could have done this podcast.

Yeah, but it would be a, you know, that wouldn’t even be a bathroom break. Yeah. All right. All righty-o, peace.