last couple of years consumer debt has
grown at a pace that is unbelievably
quick with credit cards from stores
credit cards from banks so on and so
forth a lot of people dismiss the
buildup in personal debt consumer debt
in the u.s. I mean the numbers are
staggering in terms of how many
Millennials get caught up in this bad
debt cycle borrowing boom strong US
economy fueling a record level of
consumer debt 14 trillion dollars in
death household debt levels over all
including credit cards student loans and
mortgages are at the highest levels
since 2008 Americans are expected to
spend as much as 730 billion dollars
this holiday season and many according
to a recent survey will go into debt
outstanding consumer credit card debt
it's at a record households are taking
on more debt a lot more in fact they now
owe a record amount of it u.s. credit
card debt ending 2018 at a record so why
should you never buy your phone on a
plan there is a saying and a sentence
that rings true in this scenario and in
any other scenario regarding debt it is
that the debtor is slave to the lender
so if you owe money to somebody you are
not working for yourself you're working
for that person to make them their money
back even if it feels like you're
working for yourself when you owe
somebody money you are working for them
and you are paying them back when you
buy your phone on a plan what happens is
that you are now in debt if you buy a
$1,000 phone and you paid the $1 tax
upfront you now owe $1,000 even if
that's split up over 24 months and it's
$38 a month and it's only two more
dollars and last time every single time
you are putting yourself in debt and you
are now the slave to the lender so it
happens is that you buy these phones on
a plan
let's say you just recently bought the
new iPhone 11 Pro and you buy this phone
on a plan and it's only 42 dollars a
month and then next year the iPhone 12
comes out and they have this trading
program where you could trade in your
newest phone and get the latest and
greatest phone and it's twenty forty
five dollars a month plus tax up front
and you do this year over a year over a
year over a year and you never end up
owning any of your phones you're just
borrowing them you're renting them and
every single time you literally get no
value out of the phone so you pay for
twelve months you put half the phones
value and then you trade it in and you
get the next phone or you trade it in
you get a credit towards the next phone
but you never own the phone at no point
have you paid the phone off and this is
inherently the problem don't you find
the price tag for the United 10 out of
reach for the average of Eric well it
it's a value price actually for the
technology that you're getting and as it
turns out you know most people are now
paying for phones over long period of
time and so very few people will pay the
price tag of the phone
also most people actually trade in their
current phone people in 20 20 20 19 20
18 have gotten very comfortable with not
owning anything in their life whether
it's payments on a computer payments on
a camera payments on a phone payments on
a tablet payments on headphones payments
on anything everybody takes these
payments on because they couldn't afford
the product up front and I got a simple
rule for you that I'll tell you at the
end but what happens is you are now
slave to the lender so if you go into
Best Buy to purchase a new MacBook Pro
that you can't afford because you have
four hundred dollars in your account but
you can open up a credit card and pay
them over twelve months about 50 bucks a
month that seems way more enticing but
again you're now slave
it's the lender so every time you go to
work and every time you bust your butt
at like Chipotle and you're working on
the line and you work in these super
long days eight-hour shifts and you're
exhaust at the end of it none of that
money you make is even yours most of it
is going to be paying off lenders and
the reason people are doing this is not
because they're stupid or they're
misinformed it's not like a math problem
people if they sat down and thought
about it they know that it's probably
wrong to make payments on something the
problem is that people are very very
comfortable spending other people's
money and they don't have any money of
their own to spend because they've been
pretty much lied to and deceived for a
very long time
still earning always earning I don't
know where you're pointing not that one
the big one you can't sneak a good
earning opportunity past me
in fact I got a hand modeling gig that
starts right around 1.5% cash back on
everything you buy with freedom
unlimited I get a credit card with no
balance transfer fee we got you and no
annual fees we got to how about a card
where I get cash back on purchases we
got you it's the no games don't mess
around
no earning limit have you do I look like
I'm joking cash back pop heading to San
Francisco
if you earn your business own the card
that says so in a recent study done by
common sense it was revealed that no
millionaires made their money from cash
back rewards and credit cards the credit
card system is set up in a way where
anybody ever can get approved for one
basically all you have to do is exist
and you could have no job a little bit
of a job a full-time job whatever you
can get a credit card you can get
approved for almost anything except for
like a house and probably even a car eg
approved for because these banks know
that lend you this money they know that
you'll pay it off because you have to or
they'll be able to levy your accounts
and this and that in this net and what's
happening is these people that are using
these credit cards to fund a lifestyle
that they can't afford their their lives
are being ruined and maybe you know
somebody or you yourself have spent an
amazing amount of money on credit cards
and you got thirty thousand dollars in
credit card debt twenty thousand ten
thousand you know a crippling that can
be where everything you do you have to
think about I have this big weight on my
shoulder you might not think about it
because if you did think about it you'd
have it paid off but you're probably not
actively thinking about it so when
you're purchasing these phones and
you're purchasing these cars and you're
purchasing these clothes on credit cards
take a second to think do you need it is
it something you actually have to buy
will it add value to your life nine
times out of ten no you know what 99
times out of a hundred the answer is no
there's a massive problem in this
country where we have this booming a
economy but it's entirely built off
credit it's not built on other people
actually owning things it's built on
banks lending people money that is
actually their money in the first place
when you think about the banking system
it's kind of messed up you are giving
your money to a bank to hold because
it's safer that way even though if you
have over $250,000 you're pretty much as
so well and it's safer that way
and they loan that money out to people
who are buying these cars and these
computers and these phones that they
can't even purchase with cash that day
thank you system if that's another video
that is the most corrupt unbelievably
disgusting portion of America banks are
the worst so when you are buying these
things on credit cards and you're buying
this phone and it's like well it's the
latest phone I'm just gonna put it on my
plan and I'll pay it off eventually
you're not thinking about it in the best
way if you thought about things in terms
of the way that businesses do and
successful businesses do everything that
appreciates in value that is loss of
income so when you buy a phone for $1000
and a year later now it's only worth 500
or $400 you've paid all this money and
you actually lost money when you invest
in depreciating assets like a phone or a
tablet or a computer you invest your
money in something that's depreciating
so if at one point it cost a thousand
dollars it doesn't cost that much
anymore
you've now lost that money and I know
that people use their phones to make
money and everything but you could use
an iPhone as e to make money you don't
need the iPhone 11 Pro max to make money
you could use in any phone really you
could use a hundred art phone to make
money so when you look at your phone and
you look at what you're using as a
depreciating asset everything starts to
become more realistic so let's say you
spent a thousand dollars on something
and then after you spent a thousand
dollars they basically took another 600
out of your account that's basically
what's happening not technically but
basically it's depreciate it's a
depreciating asset so when you buy it
for this amount of money and now it's
only worth this much money you've lost
that amount of money you've said
it's gone and it's now has no value so
when you purchase these phones the best
way to buy a phone is to go on ebay type
in last year's model see it that is
about 400 bucks or an iPhone e+ he has
like 300 bucks you buy that one cuz that
phones more than good enough and if the
battery needs replaced take it to Apple
for like 29 bucks or by the iFixit
toolkit for 29 bucks and replace it that
way you'll be able to have a much better
life
you'll save significantly more money and
you won't always be making payment you
imagine if instead of having that 40 or
50 60 dollar payment to t-mobile to
Verizon to Sprint you just had no
payment you just had your $40 bill or
your 45 dollar bill that you owe to them
for using their service wouldn't it be
wonderful wouldn't it be amazing that 50
extra bucks each month that you could
pay off other debt with so the best way
to buy a smartphone is not on plans it's
to by last year's used model on ebay
that's what I think that's what I would
do that's what I tell everybody to do
and that's what I will do in the future
I mean I'm using right now I can afford
a different phone I'm using a busted-up
iPhone se it's totally cracked it's
totally ruined I mean this phone is like
almost unusable but it's the principle
of the thing I don't want to invest in a
depreciating asset so I'm not going to
go out and spend money on something
that's going to be worth half its value
in six seven eight months not many
things drop as in value as quickly as
smart phones to do maybe golf clubs in a
car but when you look at the percentages
a phone a two-year-old phone whether
it's still usable or not it's only worth
like thirty percent of the original
purchase price so I hope you take these
lessons with you I hope this makes you
think about a little bit debt is not a
good thing stop acting like it is this
entire country is literally built on a
deck of cards like one false blow and
it'll crumble because everybody all
these booming businesses none of these
companies that have booming business is
none of their products have been
purchased with cash it's all on credit
it's all on credit so we all these banks
we all these lenders all this money in
the economy might be booming but it's
just it's not a deck of cards and debt
a quickest way to grow but it's also the
laziest and maybe not the laziest but
it's the easiest way and not necessarily
the right way in my opinion the right
way to grow your wealth is being patient
and buying things with cash don't put
down 3.5% on I'm a $250,000 home that
you can barely make the payments on save
up put down 25 30 40 50 60 70 80 % on
your home on a significantly cheaper
home get a 15-year mortgage and that way
you don't owe the bank twice as much
it's only about 50% as much the best way
to do is to buy it with cash but if
people lived by these same rules and
they lived a little bit beneath what
they thought they should live at they
would be much happier because that next
step up it's just a law of diminishing
returns the more money you make the less
happier you are the more money you have
the more money you spend so if you just
take five seconds and think about your
life and think about how much money you
owe other people and how many times
you've bought these phones on credit
basically that maybe you live a little
bit happier of a life because you'll
have less stuff you have less payments
and less stuff is good like having less
things is a positive thing I suggest
everybody buys less stuff because it's
nice having less things when you live
your life based on how many things you
have you'll always be unhappy because
you'll never be able to have enough so
you need a GH 5 and then the gh 5s comes
out then the S 1 H comes out and all
these cameras come out and they're
significantly more expensive and you
just need to have them for why what's
the reason
probably because you're feeling an
insecurity yep honestly so you should
take a look at yourself in the man in
the mirror E and doesn't Michael Jackson
reference how was that pitch moonwalk
but basically what I'll say is don't use
debt buy it with cash pull out cash for
your budget
there are so many rules that I follow I
would say the biggest rule is if you
cannot afford it with cash do not buy it
yet if you want a new MacBook Pro and
you cannot afford it with cash don't buy
it it's a very simple rule if you don't
have that money for it
and you have to open up a credit card
for it or you have to borrow money for
from fent friends and family don't buy
it just don't buy it yet you can be
patient you could wait a year and if you
want it that bad it'll be a lot quicker
because you'll go bust your butt and
you'll go get a second job and you'll
work for it and you'll save money for it
you'll sell the things around the house
or the apartment or your room that you
don't need and you'll live a much better
life because you have less stuff and
you'll actually have things that you
wanted and not just things that you sort
of wanted thank you for watching the
video I'm Chicago Technique lips peace
out
[Music]
you
[Music]
you