Financial Advisers React to TikTok Money Advice

On this week’s episode we are joined by Dean Anderson from Kernel Wealth and we’re going to be looking at some of the financial advice on TikTok and giving our thoughts. This episode is best enjoyed on YouTube, so click the video above to get the full experience.

I see a stock going up and i buy it and i just watch it until it stops going up and then i sell it do not pay off your student loans debt and here’s why i don’t know what to say it’s not real it’s fake funny money it’s always better to be using somebody else’s money this is such dangerous advice the remaining 450k i’m gonna put that into the anchor protocol welcome

To checks and balances i’m michael vincent this is james blair this week we’ve got dean anderson from kernel on the podcast i’m going to be looking at some thin talk tik tok advice and giving our thoughts great so we’re joined by dean debut on the podcast how are you feeling excited ready to go okay we’re going to start with something really fun we’ve got about

Five different tick tocks that we’re going to run through so let’s play the first one max out your 401k could be the dumbest advice that i’ve ever heard for anyone that wants to take financial control of their future why but chris it’s free money you do max contribution and the company matches you it’s awesome like are you kidding me first of all i give you

My money and i’m never gonna see it for decades like why would i give that to you even if you’re matching it it’s not real it’s fake funny money i can’t use it i can’t invest it i can’t do anything with it and it’s on the roller coaster of the stock market which means that i’m going to be averaging three four percent on my money now by the way just so you know

When inflation is three percent which is what your the the value of your dollar is losing every year and you’re gaining four percent four minus three means that you’re netting one percent let that compound over you know the next thirty years and you’re going to be happy with it turning into a pile of nothing poof poof genius so for those who aren’t sure 401k is

Essentially like a um kiwisaver in the us um mike the testosterone coming out of that video yeah i mean you know he he appeals to a pretty uh pretty niche segment of the of his market you know it’s i’m i’m picking joe rogan listener bits a lot on the ufc maybe on testosterone um you know but i guess uh the the advice itself is three of us what’s the alternative

We’re not entirely sure it’s just don’t give it to someone else to manage and i think that you know if you are really good at managing your money and you are making smart decisions with it and you don’t like free money being put on top of it yeah okay maybe maybe you can rationalize it but i think that you know with the with the talks that we’ve given james to

Different uh uh you know people who have kiwisaver the amount of people who just want to get at the kiwisaver maybe not having access to it is a bit of a good thing but the worst thing about it he’s not got any alternative he’s basically said don’t invest in shares no matter whether it was in a 401k his whole point was the shoe market only does three percent so

Yeah but it goes up and down did you yeah it’s a roller coaster yeah it’s a roller coaster yeah why would you even invest in that i mean for those who are interested in the actual truth when it comes to kiwisaver you’re putting in maybe three percent of your salary your employer is putting in three percent so essentially if you don’t do it you’re missing out on

Three percent then the government’s putting in 500 a year plus i mean i see how much people have for retirement outside of kiwisaver i tell you what they’re not picking um uh the hot stock they’re not investing into crypto making lots of money they’re not flipping houses the average person the problem with this is it’s very bespoke around where else can you make

A huge return right and let’s call out that the stock market over the past century has not delivered three percent it’s more like seven eight nine percent in fact the new zealand share market has done about 14 per annum for the last decade so uh a load of bollocks yeah also let’s go you know four percent yeah minus inflation you’ve also got a minus fees off that

As well plus a couple of other costs so you know even that but doesn’t really stack up correctly um but again i think your average joe who doesn’t have a kiwisaver and is heading for retirement isn’t picking between a lamborghini and a ferrari so maybe having some funds that are outside of your access is a good thing exactly let’s play the next video so how do

We make money from home for starters this is not a sponsored video we just get this question all the time and honestly the answer is really simple so basically i just trade stocks on an app called robinhood which i left a link in our bio if you want to check it out it’s free to download free to sign up they actually give you a free stock so they’re paying you to

Sign up but again not sponsored and i know trading sounds intimidating here’s my strategy in a nutshell i see a stock going up and i buy it and i just watch it until it stops going up and then i sell it and i do that over and over and it pays for our whole lifestyle um if you’re wondering how much you can make doing this in this month i turned about 400 into 14

000. and in this month i turned less than a thousand into 20 000. and honestly my favorite part about this isn’t even the amount of money you can make but just the fact that we don’t have to go to a nine-to-five job yeah we can focus on things that we actually enjoy doing so if you have friends that like want to make money from home you can tag them or send them

A link or if you make money this way share it in the comments so other people know like there’s more people doing this now so is there a referral code here that you know how how are they actually making the money on this there’s no sponsor there’s no sponsorship in this um what are we doing here like what i i didn’t know it was that simple exactly why didn’t

We simplify it further if only somehow someone had come up with that idea before maybe maybe automated it maybe made an algorithm that did that for you it would be free money it’s infinite money why don’t we just pack up and do that what yeah why is he following he doesn’t even need to log in just let it run i i can’t tell if he’s being serious or not i’ve been

Told by multiple people he is being serious but the idea of buy low sell high it’s it’s edited he’s not making that sort of money you do not make money trading people fail at this all the time they lose everything it is ridiculous yeah i guess the um one of the fundamental ways that you can see through this sort of advice is one if he was that good at it why is

He telling everyone and two if he’s really that good at it why isn’t he at goldman sachs doing it no but again but why would you ever do it for anybody else why promote it if you’re making so much money why do you need to run a youtube or a tick tock channel yeah the only way he’s actually making money is through selling social media’s posts and referral codes

Maybe a course as well yeah yeah yeah yeah that’s always the best course yeah exactly yes now i would call out one thing that most people probably don’t realize in new zealand is if you are a trader and you’re trading stocks to try and make money you have to pay capital gains tax most people don’t know their new zealander is capital gains tax if you are buying and

Selling stocks to trade you have to pay capital gains tax on i’d also say it’s probably not a problem for most of them because that would imply they’re making a profit yeah what is the stat off i think it was that she is either someone has instead or someone does about the amount of day traders who actually make money being somewhere around three or four percent

Oh it’s like one yeah yeah and but the interesting thing on the text piece is that uh you kind of think oh i’ll get away with it and ird is never going to come for me probably true but actually what’s changed is apps like robin hood or centralized platforms the ird doesn’t go to you they go to those platforms and go give us all the data and then what do you get

A letter in the mail saying here’s your tax bill yeah they did it in new zealand with crypto so ird went to one of the crypto exchanges got all the data all of them had to pay capital gains tax it’s on the blockchain you can’t find me yeah great okay let’s play the next video do not pay off your student loans debt and here’s why why give all that money back to

The government when you can hold on to that money invest in real estate or some other asset that can double triple your money for example take the 40 to 50 gs that you have and go buy a fixer upper like this at a 30 discount then after you fix it up you go to the bank and do what’s called cash out refi so you can pull the 40 to 50 gs that you have invested in the

Property back out and go do it again so you basically turn that 40 to 50 gs into a couple hundred k and you never lost the 40 to 50 gs and you have the asset that pays you every single month boom guaranteed money i mean yeah i gotta understand this one first of all don’t pay off your student loan uh take the 40 or 50 g’s that you have i’m sorry where did the

40 or 50 g’s come from all it is is 40 50 g’s are dead like yeah yeah i’m just still not sure where that money sorry that money comes from like yeah i don’t i don’t know i think that’s um yeah you got to see through that to start with is just because you have a student loan doesn’t mean you have that debt sitting uh that cash sitting in your pocket like that’s

Ridiculous yeah the second thing is he’s walking out of a lot of bushes there’s a lot of hedges there’s a lot of walking and all those shots just what is going on take action gotta do it now yeah that’s that’s a really interesting um sort of point you raise there’s actually that’s a quite a well-known editing technique um a lot of different cutscenes uh kind of

Implies urgency to a situation you see it moves quite a bit uh when the action’s heating up you know it’s no coincidence that he’s done that he’s going to get you to take action now if if you don’t do this right now you’re going to lose all the money and to your point 30 discounted houses uh yeah i guess yeah i mean i’m not like up to date on exactly what’s

Happening with the us housing market but in new zealand i can’t remember the last time i saw a fixer-upper um or maybe something you could subdivide at a 30 discount like i mean the assumption here is where’s the money for the reno come from as well like i said another part of money that’s sitting around also his servicing is less because he’s got a student loan

Yeah again like i’m not sure how these work in in the states but this simply doesn’t work in new zealand one if you’ve got that debt sitting there it’s automatically taken out of your paycheck so you can’t just even if you have 40 or 50 grand you know one you can only buy probably the one fact and good piece of advice in here though is that you do not need to pay

Off your student loan faster than what happens automatically out of your salary because at least in new zealand it is interest-free so money man has a point one good point he does to a degree i’m gonna chuck in a technicality um your payback period on a student loan is generally uh whittled down to like five years or something sort of like a personal loan so what

Will happen is sometimes we actually do give people the advice to pay off their student loan because you know that 400 500 600 a month that you’re using on your student loan actually equates to 100 200 3 000 of mortgage again a pretty specific scenario definitely not what mr mulney is talking about exactly cool next one the most common question i got on my last

Viral video there are four reasons why you don’t want to use a debit card number one it doesn’t protect you from fraud number two you don’t build any credit when you’re using a debit card number three the benefits with a credit card are going to be far more significant than anything a debit card can provide and number four it ties up your cash it’s always better to

Be using somebody else’s money however there is one caveat to this if you are not disciplined with spending then you don’t want to get a credit card however if you’re a savvy investor and you want to create wealth or you own a business a credit card is something you should be using and not debit this is such dangerous advice the the reason for this is it’s just

Like a general statement that if you are super savvy and if you’re doing really good things you’re better off using somebody else’s money you’ll pay off your credit card every month the problem is not everybody pays off their credit card each month and they end up spending more than they’re expecting fix fees yeah nice charging 100 200 300 a year so i think in in

General i agree with what she’s saying like she’s not making any wrong points but i think really the the dangerous piece here is by going if you’re a savvy investor this is what you do to james’s point not everyone is a savvy investor but when i’m told that this is what savvy people do i might just go do it but i might be absolutely terrible at managing cash you

Know giving financial advice or regulated financial advice is never a sexy thing right we’re never going to be able to compete with an iron butterfly spread on a stock market so it was something like that right but you know it’s about giving advice that is you know uh works for you is personalized and isn’t you know well it’s tailored to your level of risk and

How good you are at managing money the other point maybe on there as well mike with the credit cards especially with the states is talking about um building some credit like a credit score in new zealand how does that work yeah it’s really not the same so in the states the uk if you have debt and you’re paying it back you have a credit card that sort of thing

You build up a positive credit score in new zealand yeah don’t get me wrong you can get a positive credit score on paper but really all we’re measuring is neutral or negative does it influence lending or loans to credit scores the positive doesn’t but the neutral or negative does right and just by having these credit cards it’s more chance you’re going to miss a

Payment you know that sort of thing that’s what’s going to impact you uh getting a one thing i did want to question is she mentions that debit cards don’t aren’t any more secure yeah that doesn’t make any sense surely credit card is just as risky yeah from a security point of view yeah physically but you do have uh insurance uh on a credit card that you don’t get

On a debit card like travel insurance travel insurance uh you can get uh you don’t have insurance if somebody fortunately uses your credit card i think the banks they went for debit as well they it’s an interesting one okay let’s play the next video about to buy a million dollar home for half the price the thing is you can only do this if you know how to utilize

Cryptocurrency so this is the house that i’m gonna buy and it costs about 1.4 million so i’ll have to pay around seven grand a month but for this entire house the total that i need to pay is 740k it’s because of crypto for the down payment i’ll have to pay about 20 which is 290k with the remaining 450k i’m gonna put that into the anchor protocol once i deposit the

450k it’ll yield me 19 per year that’s 88 grand a year now divide that by 12 months and that’s going to make me 7.3 k a month just enough to cover the monthly cost of this mansion after it’s paid off i’ll have a 1.4 million dollar home plus be making 7.3k a month doing nothing if you want to learn more about crypto check out my bio i don’t know where to start i

Don’t know what to say i like the thing i will say about this is i’ve looked at the comments and the good thing is i don’t think he’s fooling anybody thank goodness um but yeah the bloke sitting on us in his mom’s basement talking about crypto advice how is he how is he buying a house for half the price i don’t know i guess like one of the probably one of the

Uh the important things to think about here um especially in the crypto space when people are offering advice on this is you know if it seems too good to be true you know generally it is a 20 return on just you know what effectively is a bank deposit um is is yeah is is pretty gnarly um and i think actually the anchor protocol that um this guy is talking about uh

Has actually recently been under investigation because the company that runs that uh was accused of insider trading and actually getting their own funds and investing in it to sort of bump up the numbers uh hey shilling a scam is still in a scam right and and the other thing i’m missing the numbers here tax yeah yeah yeah yeah and and just come back to the real

Simple math if somebody is selling you anything that is going to make you a guaranteed 20 return it just does not exist sure maybe for a few months at some point that blows up the math is pretty simple if you put a few hundred thousand dollars into something and it was paying you 20 a year you compound that for 20 years you’re the richest person in the world like

The math just does not work yeah um and and again right like uh when you’re looking at these sorts of things and people are promising this absolutely the math doesn’t work just keep in mind what they are preying on is fomo fear of you missing out and looking like the person who was like oh no i’m too risk-averse i don’t want to do it why didn’t i jump in all of

My friends are making huge returns someone is always left holding the bag you don’t want it to be you alrighty so that is five different tick-tock videos what do we call it mike talk dean thank you very much for joining us did you learn anything i’ve learned a lot about how to make the money okay so this is just a reminder that get rich get rich quick schemes

They sound nice but unfortunately they just don’t work and mike made a really good point before around kind of there’s no free lunches thank you very much for joining us please do not listen to any of that tick tock advice instead of listening to that tick tock advice i want you to subscribe to checks and balances give us a review give us a like we’ll catch you next week cheers

Transcribed from video
Financial Advisers React to TikTok Money Advice By Cheques and Balances