this is a bubble that's going to pop so they reported that they had 353,000 jobs in the month of April and then quietly in the middle of the night Midnight Bar breaks it report saying they were way off and the government indirectly slowly corrected themselves after having made the announcement that they had 353,000 jobs which makes the government look wait till we show the numbers here on this one very interesting Americans are raking up Phantom dead multiple job holders primary job full-time what youc numbers record-breaking number Tom will show you another stat came up that we have to talk about this remember during Co when they were saying look American Savings is at the highest it's ever been $2.1 trillion in savings and they're paying off their debt and you're going to see people's credit card debt is going away this is actually a good idea Ubi and we sit on the podcast let's just wait a few years and see what American people do with their money cuz if there's one thing we know is that majority of the population does not know how to save majority of the population they're professionals at spending money but does day will absolutely shock you when we show it to you percentage of US mortgage is considered seriously underwater Rises uhoh shocking stat of the day $2.1 trillion of excess savings has been wiped out of the US economy since August of 2021 every month since then us households have depleted their savings at a pace of $70 billion a month to a $72 billion minus 72 billion in March of 2024 at the same time so a lot of people would say well you know they're taking this money and they're paying off their debt what's wrong with we're depleting it no no Us credit card debt has risen from $330 billion to record $1.1 trillion while the US savings rates has declined from 3 and 1.2% to 3.2% you know what this means this means a fire sale is coming because when people look at that chart by the way look at the amount of savings we had during Co we went from nothing in 2020 look at the beginning of a screaming roller coaster and it's skyrockets and then they started giving data about the fact that we're paying off credit card debt back to minus $72 billion is where we are and obviously the buying out pay lader stuff is not helping out but when somebody runs out of cash and savings guess what comes next sale a fire sale and I'm going to talk about some of the other data that Tom's got a lot of commentary to give on this but Tom what do you think about when you said when you shared this with me that that was blown away by this go ahead I've been seeing this coming and this has been really scary and what it means is as Co stopped you have to look at the emotion of the consumer as Co stopped we could hey you can come back out and play you can travel you can go to restaurants and things like that and people got jobs back at restaurants those weren't new jobs they just went back to old jobs people started spending and they forgot how good it felt to have the credit cards paid down have a little bit of money in the bank courtesy of the government but to them the emotion of the average consumer apparently pbd was this is free money and they spent it and they kept spending it and they kept spending it and now we're in a situation where last year it is a fact and you can go look this up this isn't my opinion this is a fact go look at even regular newspapers USA Today you don't have to go study the Wall Street Journal it was saying that the American Consumer last year saved the economy in 2023 by spending on GDP we bought things we bought plane tickets we bought tickets to Disneyland which I never go to we did all kinds of things like this and we saved the economy last year cuz consumer spending in 2023 was crazy but we were spending our savings racking up credit card debt using in bnpl byy now pay later in the fall and now the American Consumer is Tapped Out not completely tapped out but they're pinched so what comes next how is the American Consumer going to spend its way through the summer of 24 to help the economy the answer is they can't maybe defense spending can but not them Tom this doesn't include their 401K savings this is purely cash checkin account saving account that's the other part of the emotion is the stock market did pretty good last year so most people probably talking to their HR department hey how's our 401K you know the average investment fund oh it's pretty good we had a 22% year so that probably is a deception because you see your 401k hey honey my 401k was up 20% at work isn't that pretty cool and then you look at your IRA hey my IRA was up 25% because it was tied to the S&P and mag 7 last year just average people using average index funds that are most of the time those look pretty good so maybe they see those and they feel pretty good but they're spending the paycheck and they're just living paycheck to paycheck now it's a fact you hit a key word the American Consumer what's the root of consumer consuming I would argue that you should be an American saver or an American investor keep things simple the rule of three Finance is like a traffic light you're either red yellow or green most Americans whether it was during Bush whether it was Obama whether it's Trump whether it's Biden 23ds of Americans are living paycheck to paycheck it doesn't stop so stop focusing on what's going on at the White House start focusing on what's going in your house most Americans are in debt they're living paycheck to paycheck they're trying to save that money but they can't get out of their own way then when you can start saving that money save 10 grand amazing half you're like 10 grand how the hell am I going to get there the other half are like 10 grand I got 300 Grand in the bank but very few people are able to do that once you can get to Green you can become an investor last point it's called personal finance for a reason it's called personal responsibility for a reason it's called self-reliance for a reason cuz it's on you bro you know they say 80% of the people don't care about your problems and 20% of the people are happy you have them save that money it's a great point there and by the way when you think about the basics of money right the basic principles of money watch what happened here so who else is going to be affected by this when you see savings going down my dad I've talked about this many times my dad would say listen a man without savings is not a man there's a part of a man that feels like he lost his manhood when you don't have savings he said always have money nobody knows you have not your wife not your family nobody when we were about to go out of business the insurance company I had a stack I had a money set aside that nobody knew about that's what saved the business I had 13,000 down to the last $133,000 if I didn't have that additional money we are out of business there is no value tment there is no pbd podcast I'm probably selling gym memberships right now somewhere okay I be one hell of a gym membership say don't get me wrong but here's the point savings wise Watch What Happens how many people were begging to work from home a lot of them well when you give people cash cash and they pay off their debt and they're sitting at home and every company's worried about losing their employees you can ask for work from home but now savings is depleted guess what what are you going to say I'll walk out of the closet in the office can I just get a desk or something what's the point here's the point bullying on both sides is not cool it's not bullying when employers bully it's not bullying when employees bully for the first time we experience employees bullying employers during Co in the most dark deceptive dirty way I had a guy that we gave a raise to we hired this guy at let's just give a round number this is not here this is the insurance this is Texas Tom you remember the story we hired this guy and we gave him a salary I won't even say the number so let's just say it's $50,000 okay 2 months later he comes and he says I got an offer for another company you got to bump me up to $80,000 or R El I'm like does this guy joking so like but we need him we can't get anybody at the St during Co so we went up to $70,000 2 months later he comes and says I got another offer for $1 $20,000 if you don't pay me $100,000 I'm leaving I said guys this guy's gone he leaves the other company that he went to he ends up not even working out over there and he had to go to a different place and and eventually people realize dude you're not $120,000 year person you're $55,000 year person and you have to go back because you have to prove results what this is doing right now when you see savings depleting to the numbers that it is there's going to be a lot of desperate decisions being made by the way this leads me to a quick number here we've talked about this before but the level of delinquency on this concept here has to be talked about a Americans are raking up Phantom debt That Wall Street simply can't track this is a Bloomberg story so folks listen up here we go the rise of phantom debt is through popular buy not pay later you keep hearing about bmpl platforms like airm Clara afterpay which aren't reported to Credit Agencies masks a true picture of American households Financial Health people need to be more awake of the rise of bmpl bm's lack of transparency stems from a dispute between providers and credit bureaus with bmpl companies resisting data disclosure argu it could harm customers credit scores despite this the market continues to expand obscuring Economist understanding of consumer spending and debt bm's Allure of installment payments attracts consumers but a Harris poll survey reveals ready concerning Trends 43% are behind on their buying out pay lader payments and 28% are delinquent on other debts due to bmpl spending Insanity Tom thoughts on this well first of all there's a line in here that um capitalist I am bmpl companies resisting data disclosure arguing could harm consumer credit scores it should harm their credit scores if they're already tapped out on their credit cards and bmpl wants to lend them more money and bmpl companies they want to make money they want to loan the money but they're saying well maybe we shouldn't we don't want to disclose the data we want to do a soft credit review because it could harm the credit scores guess what the credit score is like blood pressure or temperature it's a Vital sign Fair eyes FICO all of that was a Vital sign made to test one of the measures of Financial Health and capability for a consumer so when bnpl companies say oh we don't want to do data disclosure that might harm the credit score it should harm the credit score because the consumers borrowing even more money when they already have an an average or poor credit score because of their credit card spending in the first place and I think what we saw here on the Harris poll this chart take a look at this how many of this is the consumer basically admitting they don't have Financial education or discipline spent more than I can afford find it difficult sticking to a monthly budget surprised by how much I owe monthly on bmpl you couldn't take 500 for a TV divide by 5 months and realize that was 100 a month how do you figure that falling behind my other lines of credit gone into debt my spending is out of control look at this like three four five of these are people openly saying they are absolutely incapable or Not educated or out of control to me this is a huge huge issue I love it the fact that you're talking about this and seeing what's going on impacts of buying out pay L users of services reported various ways the products hurts their finances number one 54% spent way more than I can afford of course number two worse off financially 34% find it difficult stick into monthly budget surprised by how much I owe on bmpl hurt my credit score fallen behind on my other lines of credit gone into significant debt my spending is out of control people are going through it but as much as you see a report like this he said something earlier one can say it's not fair it's bm's fault it's Clara's fault it's all these companies fault no one forced you to use it you chose to use it you chose to go buy those gifts during Christmas you couldn't afford to buy nobody forced you to make that decision nobody forced me to buy a car I couldn't afford that I eventually lost nobody forced me to do it I made that decision to get an expedition with $600 car payment when I was making only 30 grand a year I made that choice I got into that $49,000 I had to make some changes I had to change the way I looked at money I had to change the relationship I had with money unfortunately many keep blaming other reasons why this is taking place instead of taking full responsibility for it and it's not easy to do but some of us had to do it well this byy now pay later I'm a big uh alliteration acronym bnpl it's I now pay later it actually is broke now poor later oh poito Latino oh my God but it's on you at the end of the day so there's another term that you should be familiar with I was like okay I'm pretty astute when it comes to personal finance this is a new one and they called it money dysmorphia money dysmorphia this is a new term and it basically means that you have a distorted perception of your finances and it's running rampid with Gen Z 41% of Millennials have this and it says an uptick in gen Z Now what is money dismorphia it's a disconnect between your actual Financial well-being and what you actually perceive that you have according to Tik Tok literally influenced by Tik Tok feeds thanks China for all your wellbeing we've seen the Stats come out there 2/3 of paycheck to paycheck 50% of Americans don't have 400 bucks for an emergency 25% of Americans don't have a th000 bucks in savings only 50% of Americans actually invest so the choice that you have to make is do you want to be a part of the rich get richer crew or the poor get poorer crew I chose when I was broke as get my mind right then you get your money right then the rich get richer so what's the end game for all these problems that you guys are saying people AR saving they're doing the buy out prayer later this is going to lead to something bad I know he talking about the fire sale but overall this is increased poverty the dependency is going to be on the government the economy is going to be messed up housing is going to be messed up this is a bubble that's going to pop am I right you're not wrong because there's another story perfect way to transition into what you're talking about here percentage of US mortgage is considered seriously underwater Rises this is not good right no this is not good so when you're seeing cuz nobody thought it was going to happen now everybody said oh this not going to happen this not going to Happ that's not going to happen seriously underwater mortgages in US increased from 2.6% to 2.7% in q1 of 2024 with Kentucky experiencing a significant rise from 2% to 88.3% followed by West Virginia up to 5.4% and Oklahoma from 5.5 to 6.1 Louisiana Wyoming had the highest shares of seriously underwater mortgages at 11.3% and 8.8% the proportion of equity Rich mortgages declined to 45.8% marking a 2-year low here's what's happening in certain markets Prices rose really really fast like Texas and Florida in other markets houses went up more moderately remember that Spike we all saw right after covid interest rates were jumping up so in the markets where the prices didn't go up too quick guess what happened people went out and bought houses and this happened in the rural and moderate markets first that's why we're seeing these stats in Kentucky Oklahoma West Virginia Louisiana Wyoming those people went out and they got 6 and 3/4 and 7% mortgages okay those are expensive and now those markets have gone down and now those mortgages are underwater but they're underwater at higher interest rates those people may not be able to refy cuz what do you need to refy Adam you need an appraisal and if you can't get the appraisal to counter the value of your mortgage then you're going to be stuck with that 7% mortgage while the value of the home has come down so basically the spike we saw after covid people went out and bought homes not a lot of them cuz remember overall home buying was down but those that did now that the prices are retreating those mortgages are underwater and the amount of equity overall in mortgages that's an equity Rich mortgage oh I only my mortgage is only 50% because I have all this equity in my house that Equity is coming down so we're seeing a moderation in prices and people are about to get pinched and they're not going to be able to refy their way out of expensive mortgage so underwater mortgage means you owe more the mortgage than the house is actually worth translation on paper your down payment is gone oh damn that's not good like let's say you paid 500 for a house and put 100 down and you had a 400 mortgage that means the house is $3.99 the house is worth a dollar less than the mortgage and on paper that 100 you put down bye-bye this is the problem I have with people that are buying houses you think you could just blindly walk into a real estate investment like I just became a millionaire doesn't work that easy you know there's a famous phrase if it was easy everyone would do it here's a little fun fact for you 100% of foreclosures are because people can't afford their mortgage if you can't afford your rent they just kick you out sorry time to go can't afford your mortgage the bank takes over your loan you got to go so the number one thing that Tom pointed out was I spent more than I can afford that also works in buying a home maybe you should have bought a $350,000 home but you bought a half a million doll home cuz you thought that oh I don't want to live in this little crappy house I want to live in a big house or whatever depending on whatever but maybe shut about a million doll house not a $2 million house and then what happens is you buy them more than you can afford you realize listen I thought that I can make a $5,000 mortgage payment every month what they didn't tell you was like yeah you also have taxes you also have insurance you also have HOA so all of a sudden this American dream that you've been told lies within home ownership becomes an American Nightmare I want to say this though and it's very important for you to get this message guys because sometimes you hear a message like this and it's kind of like dude I know I'm in it right now and I feel like and you're making me feel even more like sh but this is what I do want to tell you a part of it for you to be thinking about everybody at this table at one point had nothing going on Sometimes the best part about making the changes to get rid of arrogance there are not a lot of qualities more unattractive than arrogance maybe somebody that's entitled maybe somebody that's a victim maybe somebody that wants to blame everybody but arrogance gets kicked out of you God willing when you hit rock bottom and you lose everything all the fame in the world all the accolades you're out oh my God you're that guy oh my God you're so oh my God look at your car oh my God look at this all of that stuff if you buy into that you're going to go back to where you were before so if you're watching this right now for yourself saying man what do I do with this everything starts off with habits what are your daily habits what you're doing okay what are you spending money on literally go take your credit card and your debit card with you and your wife sit down and go line by line on what money is being spent on and cut them off go on your iPhone do you know on your iPhone you can go manage your subscriptions on your iPhone do you know how many of us have subscriptions that we no longer do anything with that we haven't used for a year 2 years 3 years but you're still paying 10 bucks a month 8 bucks a month it's an app you downloaded you forgot about there's $999 $499 $29.99 you can literally go on your phone to manage all the subscriptions that you're paying for it's not a challenging thing to do one must sit down and go through all the stuff they're spending money with and then the tough part is I'm talking to this one guy who at one point he was a St in his business what he was doing he says man what do I do I said dude if you got to do Uber 2 hours at night from 10 to 1:00 for the next 6 months you got to do it you got Wife and Kids Pat you want me to do Uber nobody put you in this situation you're in the situation yeah you got to get out of it you got to go Uber I was selling shirts when I had nothing when I lost it all with my shirt off cuz the only thing I could advertise was my chest my biceps and my abs that's the only thing I would advertise everything else but I could legally advertise I would buy it in downtown for $2 and I would sell one for5 to 420 and people would buy it that's how I was making my money to get out of it so if you're going through it you're going to have to do certain things that maybe goes against your ego and pride and it's going to really mess you up but nothing is more important than you protecting your family and delivering on your promises and that's what you and I are responsible for doing we chose to be husbands we chose to be fathers we chose to be leaders and a leader sometimes has to make some decisions and suck up as ego is not an easy thing to do for us but we have to do it one of the greatest things I've learned from Pat is the concept of sequencing do this before you do this you know the famous you got to walk before you run run before you Sprint Sprint before you do a marathon everything like that I walk people through these six principles of wealth the rule of three like I said before with this traffic light there's red there's yellow there's green often I find I times that people are investing when they should be paying off debt cuz they've been told oh get a 401k but you have credit card debt of 22% stop investing hey you should be saving not investing right now hey Now's the Time to invest they're doing the sequencing all wrong and it's just a matter of doing the things in the Practical order I said you have an income problem go do something with that increase your market value within your business go learn new skill set so you can bring more value to the company you're working with you got to do something to take everybody's trying to increase their net worth but they're not trying to fix their spending and they're not fixing their income you need to increase your income to be able to do some of these other things