33-Year-Old Straight Up Isn’t Paying His Taxes
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This is Michael. I'm 33 years old. I'm based out of Richmond, Virginia, and this is Financial Audit. What do you do for a living in Richmond?

I am a door-to-door salesman for a solar company. Solar company. You're the second person we've actually had on the show doing that. That's interesting. I watched. I think I watched that one. Is it super sunny in Virginia? It's actually, Virginia is one of the best markets in the country for solar. Well, I'm sure a salesman would say that. Yeah, yeah, yeah. Well, I mean, the incentives are very good. Is it all commission? Yeah. Okay.

Is there any base? Nope. 100%. 100% commission. So I think I see on here, we got a spreadsheet.

Yep. And it's labeled money. But I see 2023 income. Mm-hmm. It looks like, I mean, this is for the first four months of the year. 2,163 came in in January. Yeah. So that's your full income. And then February, only 630. Yep. And then 3,220. Good. It's going up in 3,125. So kind of leveling out. Right. Is that it? Is that actually the income? Yeah.

Like total, bringing in? Well, this is... So I actually started working for this company in February. Oh. So this was... If you know sales, you get your pipeline rolling. Yeah. So that was where I was living off basically the rest of my savings. And then...

It just started ticking up every single week, every single month. This past month in May, I made about 9,000. Oh, very good. 9,000 in May. Yes. Okay. Now, do you see that trend continuing, leveling, falling? Optimistically, obviously, you want it to grow, but realistically, where are we looking at? I would say realistically, we could probably... If I'm being like...

Totally honest and realistic. I'm probably, if I was to settle out, it would probably be somewhere around $7,000 to $10,000. Okay. But, you know, optimistically, we can go a lot higher than that. Yeah, I mean, sure, optimistically. But I also want to be realistic where you think we're going to be just over six figures. Yep. Which would be awesome. How much do you get if you make a sale of just, you know, a standard piece?

solar sale for roofs. What are you bringing home from that sale? $400 per sale. How are that many people buying? Okay. So I get paid if they see the presentation. Oh, okay. So you get paid if they see the presentation. 175. And then if it sells, I get an extra 225. So I'm looking at 400 per sale, but probably, you know,

If I get eight to ten people to do that, I have about $1,000 a week. No offense to these people, but who in the world first answers their door to salesmen and two, actually lets them do a presentation? It happens all the time. Why? Who are they? Are they like, well, I don't want to like... Who are the people that are buying or who are the people that are selling? Okay, I'm buying. I'm envisioning...

Very old people who just want to have a conversation. No, no. Actually, older folks are generally a little bit tougher. Yeah. So solar, they don't really care. They don't have any need for it. But who's talking to salesmen at a door that comes up? A lot of people are. Okay. I talk to about 20 to 30 people a day.

Probably. I should be doing more. I should be doing more. Okay. Well, how many hours is that? So this is, this is the thing. So when I started out, I was probably doing about four to six hours a day. But this past month, which is really what generated like a lot of, a lot of money for me, I started working 10 hour days.

That's a lot of walking. Yeah. Yeah, probably like six, five, six miles a day, something like that. Very good. Okay. Well, good. I'm glad that income started to go up. Tell me about your financial situation and then give yourself a score as you're out of time. Overall, I mean, it's definitely improved in the last month or two months, but I would probably say it's about...

A one, maybe two. Okay. What were you doing before February? So I did... I worked... This is my second year doing door-to-door sales. I worked for another solar company last year. I made pretty good money. Yeah. Decent. About 45K. Nothing crazy, right? Okay, yeah. But that was my first year doing it. And then I...

Last year was a little chaotic for me. So I went, I also... I want to take a brief moment to thank today's sponsor, Opal. Let's talk about a game changer in the world of webcams. It's the Opal camera. And while this has been a bit of a secret among tech executives...

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And then I sold roofs in Florida for three months. Did you go all over the place? Yeah. Okay. So right now I'm kind of recovering and settling and focusing on one. So no significant other, no kids, what I'm guessing. Okay. I was going to say, because going all around. Exactly. Yeah. You can't even do that. Okay. That's interesting. Why did you start that online marketing company? Because there's definitely none of those to compete with. Well, so I thought I had like,

When I was knocking doors last year for a different solar company, I was only doing it for like four hours a day. So I was like, okay, well, I'm making pretty good money enough to live. I should fill the rest of my time and day with another business. So I decided I'm going to do that. And then it just didn't end up working because I focused way too much on one thing and not the other.

If you're going to focus on something, you should focus on hitting that subscribe button because we are like ridiculously close to 500,000 subscribers. Thank you to everyone who has so far. Sorry, go ahead. Continue. It's all right. I think I was about done there. Oh, okay. Yeah. Okay. So why... What was like... When did we get into debt? When did you get into debt? And we're about to go through that debt, but why and when? Um...

I mean, I've been in debt since I was probably 18 years old. But, you know, coming out of debt and then getting back in debt, probably I would say the reason, not an excuse, but the reason that I'm in debt is because I never really made a lot of money. And I would probably spend too much, live above my means. So that would, I'd start to pick up just random debt here and there and then pay it off and

I mean, this last, I would say this last couple months, just because the situation kind of got to the point where I'm going to completely run out of money. A couple months ago? Yeah. In December, January, I was thinking like, I have, I have, I'm going to run out. Like, so I just was like, okay, well, so how do I solve this? Like, how do I fix this? And it was like, you have to get out of debt, all, all of it. And you have to just start making money.

A ton of money. So, um, it just kind of, I hit my breaking point. I'm like, all right, I'm done with this. I'm not doing this again. So that's when I, that was about the time that I reached out to you. Cause your, your channel was, was starting to come up around that time.

Well, I mean, you know, a little bit. Oh, gotcha. That makes sense. All right. So let's break down this debt. Let's see where things stand today. And we'll go from there in terms of putting your picture together and stuff like that. So I'm special financing company LLC. Very creative name for them.

What is this? You owe $4,000. Yeah, so that was the personal loan I took out to start the business. Oh, you took out a loan to start the business that failed. Yep. So, okay, you had absolutely no money going into this business when you started it? Mm-hmm. How much money did you put into this thing? Probably about $1,000. About $1,000, and then I'm just paying this off. And that lasted for about... No, no, no, no. How much money, including what you borrowed, did you put into it?

Like, what did it cost to get up and running? Like, what did you do? Because, I mean, there's a balance of $4,000 here, so it wasn't $1,000. So it was that you're subsidizing your living. Basically, you get access to a platform, right? And then you can start your business from there. With who? What platform? What? It's like a...

I don't want to say that. Are you talking about like Squarespace type thing? No, it wasn't Squarespace. I think it was called... They're a business of which you start a business under them type thing? It's not Squarespace. It's not Squarespace. No, no, no. But like it's a business and you start like a sub-business under them or something? Yeah. Yeah. Something like that. Yeah. So I know, right? Kind of like maybe multi-level...

Hopefully not, but maybe. Did you have control over what the business was or was it like, hey, sign up in your own marketing agency? Basically, yeah. Yes. So you joined a pyramid scheme. Probably, probably, yes. And you took out a personal loan in order to do that. Okay. But again, back to my question, $1,000? I mean, or what was the total that you did to get into this thing? I don't even remember now. It was last July. Okay.

I thought you were going to say it was like five years ago, so I forgot. This was last July. It hasn't even been a full year yet, and you don't remember the thousands of dollars? Honestly, I don't remember it. Well, the interest or finance charge that they have for this, I mean, of the $320 minimum monthly payment, $240 goes to principal, $80 goes to...

The finance charge. Mm-hmm. So, yeah. It's not a killer, but it's not good. I mean, it's... It's definitely not good. It's a $300 minimum payment per month. Yeah. Which, when you're making nothing, isn't that... It's down to about... Yeah. It's down to about $3,000 now. Okay. So, just since... Okay. So, when did that fail? When did you just call it? So, probably about two months. I was like, dude, I'm done with this. Because I just had to...

I had to focus. It was a dumb decision. So we took out thousands of dollars. Yeah. Yeah. It's not good. And we gave up in two months. And, I mean, it wasn't a business we'd get into in general. So you owe taxes. Yeah. Now, this makes sense knowing your occupation before. So, interesting. I don't know if this was for last year, but last year, did you only declare $14,351 of income? Gross. Last year? Yeah.

I think it was about $33,000 that I declared income for. Oh, it just grossed income? Yeah. Oh, okay. Yeah, because I can't click around on here. It's just a screenshot, so I don't know what. Yeah. But have you paid the taxes? No, I haven't. Why? You made $9,000.

last month. Why did you not cut a check for $1,342? IRS is not someone we f*** with. Yep. Okay, it was accepted, so you filed it. But why? Why have you not cut a check for this? Because I owed my roommate about $1,000. I owed my parents $2,000. So they come first for the IRS. And then the IRS... I don't know about that, to be honest. I've got to keep my house in order. I know, but... The IRS, man. I hear you. It's coming up soon. Yeah, when's it coming up? What's the date?

Well, no. So I filed the extension I have until September 30th to pay that. But it makes... Okay. Yes. First of all, why did you owe your parents money? Why did you owe your roommate money? Because I only made, what, like... Yeah. That's why. Okay, so that's what the error is. I paid my roommate back. I have to pay my parents back. Oh, jeez. What is this? So that's... I recognize that. That's student loans. Oh, yeah. All day, isn't it? Oh, yeah. That's the bane of my existence right there.

Oh, did you get a degree? Yeah. What was your degree in? Biology. From? Old Dominion University. And you're not even using it? Nope. Yeah. Sounds about right. So $50,000, it's probably going to range from 3% to 5%, I'm assuming, typically, for federal student loans. I think it's, yeah, it's capped at $6,000.

3% to 6%? Yeah. 4% to 6%? I think it's about 4%, 4.5%. You know, there's a bunch of loans in there, of course. And you can't see what the interest rates are because it's under firm. However, at the end of August, beginning of August, at some point in August, you're going to start paying these. And you're going to have a minimum payment of probably $500, $550. Call 550. That's going to suck. And it's probably, yeah, it's going to range from 4% to 6% interest depending on loan. I think the due date on that is October, but, you know.

Things are changing. Wait until the Supreme Court. Yeah, right. I'm not hopeful that that's going to get forgiven, of course. It wouldn't be. So, okay, I'm looking at a thing of your debts at the time. The parents, they're paid off though, right? $2,000? Parents are not paid off. The roommates paid off. $9,000 is a lot of money. Where did it all go, dude? Where did it all go? You couldn't cut a check for $2,000 to pay off the parents fully. What's owed to the parents? $2,000.

Still? Yes. What was it? It was just expenses to get me rolling. But it wasn't more than $2,000. No. I thought you said you paid them back. It's just why you did not pay the IRS. No, I paid my roommate back. Okay. So is that Travis? Yes. Okay. So that's gone. Marked it off our list. IRS still exists. Verizon, you owe $1,350.

Yeah. 21-2? Yeah. But is that your contract for the finance phone or is that like back pay? Yes. Oh, thank you. Yes. Okay. There's no back payer collections with that. I financed an iPad and an iPhone. Special financing? Is that what's due today or is it actually $3,000? That's $3,000. Okay. So an additional $450 has been knocked off. Mm-hmm. Credit card? I don't have a whole way to decide. Yeah, you do. Yeah. I do. And then student loans. Yeah.

Yep. The budget is in here, so we're going to save that for later. So here's the credit card. This is what confuses me, and this confuses me every single time, and you've probably seen me bring it up in episodes, and I really don't get it. Yeah. Okay, you already know what I'm going to say, so I'm not going to freak out about it, but why? Why in the possible world...

Are we still spending money on a credit card of which we are losing $100 of interest, of which we are trying to pay off, of which we still owe our family, the IRS, and all these other things? If we have all these other things, why are we spending money on a credit card? I do not understand when we're losing interest. Not doing it anymore. I've cut them out.

Good lad. When did you change that? Because it's not like this wasn't recent. That was just last month. I know. So what made you change? What was it? Well, I started making more money. And I'm like, okay, well, this needs to go. I already knew I wanted to pay off all the credit cards. All the credit card debt.

So that's when I just like I'm done with this. I don't need it anymore. Balance of $6,662.78, $164 minimum monthly payment. Interest rate of 18%. And you've lost, at the time of this statement, $400 in interest this year, which means that at this point you've probably lost like $500, $550, something like that. So lovely. Yep. And it's an 18% interest rate.

And you went, what is this, DSW Broad Street Plaza that you spent $68 at? Oh, discount shoes or something. I bought shoes. Glad we're going into depth for that. I'm sure you have shoes, right? I do now. You did not before then? You did not have shoes? You didn't have a single pair of shoes? Yeah. I'm not, no.

Now, I'm checking account. We started with $1,000 and ended with basically $1,000. An extra $100 is in there. We put $3,600 into savings, but we took out $2,600, leaving us with $1,000 in there. What's the point of putting money in savings if we're just taking it out? I think at the time of this, I was trying to save as much as I could, and then things just...

you know, I had to take them out. I had to take it out and put it back into checking. I think I just transferred it over to the checking account. So I did, uh, Dave Ramsey's little $1,000. Oh, is that what it is? Yep. I don't know if that's going to be enough for you, but we'll see. Okay. Also throughout here, we see things that typically I'd like be okay. Cause it's 7-Eleven or Walmart or like Wawa and all this other stuff. But no, because they're dollar, $2, $3 purchases. I know you're not just putting their dollar, $2, $3 into gas. No.

So what do we have in here? We have taquitos and we have an Apple bill and taquitos and taquitos and taquitos and taquitos and taquitos and Chipotle and taquitos and taquitos and taquitos. Why are you stopping and spending all this money, which adds up by the way, at these other places when we owe our parents in the IRS debt, why are we doing that? And yes, you spent a $26, 50 cents at Dave Ramsey. What did you buy? Did I? Oh, how do you not know?

Oh, that was... He wouldn't be happy with that. No, he wouldn't. No, that was tax... I think it was tax advice.

She already had TurboTax. You paid for his version of TurboTax. So you paid for two TurboTax? I don't even remember that, honestly. I don't even remember that. Well, we also have Verizon, so you're paying that thing, the finance thing, and your phone bill. Of which, by the way, I mean, if we're trying to get out of debt, don't do that. Use, like, Mint Mobile or something. That's better. You can sign up for that in my description because I partner with them because people who are trying to get out of debt or save money should use Achieve for Service.

Yeah. That's on the list. It's on the list. Okay. And taquitos and taquitos and taquitos and taquitos and taquitos and Starbucks and Chick-fil-A and taquitos and taquitos and Chipotle and some H-E-A-A-X-S ticket. Oh, ticket insurance. You bought ticket insurance for something. Oh, I went to a concert. Yeah. Ticket insurance I don't find ever really be worth it, to be honest. And then Chipotle and Axis.com.

I have no idea what that is. Dude, buddy, you can't be doing that. It's $150 gone. You can't not be knowing. No, I know. I'm hoping it's utilities, but there's nothing to indicate that it is. No, it's not that. Okay. And then taquitos. And taquitos. And Starbucks. And taquitos. And taquitos.

ATM withdrawal of $100, so we have no idea where that went. And taquitos and taquitos and Apple Bill and Chipotle. ATM fee and another ATM withdrawal of which we don't know where that went. And taquitos and taquitos and taquitos and taquitos and Chick-fil-A and gas station taquitos and gas station taquitos and taquitos and taquitos and Chick-fil-A and taquitos and winter...

Pogue Market whatever it's a taquitos essentially because it's like $2 and sports bar in Chipotle in Mexican restaurant of which you drop $25 at in Publix which is taquitos in this instance and taquitos and taquitos and taquitos best buy $742 what? it's a month ago you better know what the f*** this is $742

I'm trying to remember. How do you not know what you walked into Best Buy and spent three quarters of a thousand dollars on? What was that? What was that? Basically 10% of what you made. I'm trying to remember it. I can't remember. I can't remember. What did you need to buy? Was it a phone? No. Was it a computer? No. TV? No.

Bird fees for the scooters and Chick-fil-A and spending $42 on bird rides, sending money out via Venmo and Takedos and Steam games. Okay, so Steam games, did you get like a computer part or monitors or something? No. Or keyboards? No. And Jersey mics. So great. We're spending all that on just absolute crap when we have the IRS to pay off. The IRS. Plus we're losing $100 in interest from the credit card. Yeah. Yeah.

What is possibly behind this? Come on, give me something. It's just convenience store stuff. Twice a day. When I work a lot. I start work at 10 a.m. and go out. I wasn't packing lunch.

So it was just like buy Chipotle and Chick-fil-A and whatever, right? Even those fast food places were relatively less frequent. It's the gas station taquitos over and over again. Energy drinks. Dude, okay. If you want that absolute trash in your body, what you do is you go to the grocery market, grocery store, and you buy massive packs at what compared to this is a discounted rate. Right, yeah. And you put

in your trunk because you work out of your car and walking around. I actually did that. Good. I'm glad you watched me start to do that because this is a disaster. You can't be doing that. It doesn't make sense. You spend about $200 doing all that crap. Really? Yeah, because you go twice a day and it's a little cheap couple dollars. $200. And then you go in and you add an extra $100 on it. So $300. And then a hotel we spent $200 at.

We can't be doing that when we're trying to pay off debt in Macy's, $129. Everything's adding up, dude. Yeah. It's just like inexcusable. It's too much spending. Yeah. And it's all bulls**t, too. None of it's necessary. It's a packet sandwich. It's have a cooler with drinks. Yep. It doesn't make sense. I do that now. Yep. Good. Are you still doing this at all? Probably a little, but it's cut out. I mean, I don't... It's significantly decreased.

I would say. Yeah, yeah. There's definitely not twice a day. It's definitely not twice a day. Are we down to once a day now? Maybe once every two days. Something like that. You don't need to. Everything needs to be going to debt. It doesn't make sense, dude. Yeah. It doesn't make sense. Everything's stupid. Now, this... Okay, let's... So your portion of rent is $750. Yep.

Then utilities, 200 variable. And same with gas. Ooh, gas, 400. Oh, yeah. That's wild. Phone, 250. iPad, there's an iPad attached to it? Yes. Okay. Car insurance, 70. And groceries, 300. Good, I'm glad you stick to that number. Okay, so you're following that. And the financing stuff, 320. Yeah, that's killer. Yeah, that sucks.

Gold's Gym 30. I'm good with that. Audible 16. I'm okay with that music. You can listen to some commercials right now. We don't need to be doing that. $3 for YouTube. Are you like, yeah, there's a channel I subscribe to. Oh, I'm sorry. I love them. And thank you to everyone who does. But yeah, I mean, three bucks still. We're just, we're trying to squeeze everything out of it. We can't. Right. So that's gone. Music is gone. Hulu is absolutely gone. That's not even a question. What the fuck? I canceled that. Your credit card payment's not in here.

I usually, so what I do is May budget, right? So I screenshot this in the middle of the month. So what I'll do is I'll take all of this, I'll paste it over here, and then I will add whatever I need to onto that. So it's just kind of my way of doing it. So once it comes out of the bank account, then I cross it off this list.

I do that at the start of every month. Health insurance, you don't have it. Pet insurance, you don't have it. They're on here and you say upcoming. You need health insurance. Health insurance is crazy. It's $300, something like that a month. Yeah, but it will save you hundreds of thousands of dollars if something goes wrong. If you get hit by a car going fording in a neighborhood. Yeah, I mean, then I have...

I don't know. I've looked into it, of course. $300 a month is just a lot of money. It's a lot right now, but I would rather you be safe. Safety comes first, and safety also includes going to the gym, making sure you're fit. You know me, but it's a part of that. That's why therapy is applicable in these type of situations for everyone, really, but for the vast majority. Okay, so the credit card...

So we're going to, well, student loans are about to repay, so I'm going to add $550 to this budget and $164.13 to,

to the budget of which is the credit cards. Meaning, in order to survive, it's $3,965.13 is required for you to survive on a monthly basis with Hulu cut, with YouTube cut, and with your music subscription cut. Actually, I did not minus 15 for Hulu, so we're at $3,950.13 in order to survive.

It's a lot of money. And guess what? Of your incomes that have come in, none of your months hit that except for the one month where you did well. And with sales, I did sales before this. Well, then I was product manager and then I did sales.

Or I did sales first. Whatever. Either way, I understand sales. There's going to be up and down months. There's going to be months people just don't want to buy solar because it's like, ah, it's cold this month. Why would I buy solar? It doesn't make sense. They're in the stupid mindset of just stupidity, you know, because they just can't picture it. You're going to have good months and you're going to have bad months. Right. Because that's just how sales works. Yeah. Summertime. And not to mention at your other sales job, you only brought in $40,000 a year. Yeah.

I get paid better here. Yeah, I'm glad this is going better, but does that mean I have confidence in the $9,000 a month? I'll be honest, I don't know. Yeah, I mean, that's fair. It's only been one month, so I can see from your perspective. It's like if I went and just went crazy based off my best month on YouTube. Or like I started making income on YouTube, and then I just based my entire life off of that. You've got to see what the ebb and flows are, because everything ebb and flows constantly. So like what I said in the beginning, I have pretty...

pretty good confidence that I will, uh, that I'll be making at least 7,000 or seven to $10,000 throughout the summer. So, uh, and it's just because like I've gotten, I've gotten better at what I do. Uh, my skills have developed and then I'm working hard. I'm working 10 hours a day. So I think in the summer you're going to do well, I think seven to 10 seems reasonable in the summer. I think winter, uh,

Yeah, that's different. You'll see a psychological shock. Absolutely. But what we have to do in that situation... Hopefully this is all fixed by December. I mean, it will be. The debt... I see what you're saying. Yeah. But what we need to do in that situation... I mean, with everything marked up, the debt is...

Barely. Well, the student loans makes up a big part, but the special finance and the credit cards, in terms of minimum monthly payments, that's not what's driving the vast majority of this. So it's just everything combined because there's so many things that stack up, stack up, stack up. You need to give yourself an extra, you should give yourself an extra $100 for like toilet paper and toothpaste and crap, crap, crap. So I'm going to add an extra $100 for that, meaning you're at $4,050 because you need to be able to do that. So add that into the budget because you need that stuff.

deodorant's important. All that good stuff. Shampoo? Yep. Highly recommend. So, yeah, we're about $4,000 in terms of what you need to survive. Okay. Okay. I mean, the minimum... Wait, one second. I'm confirming the math. I think I added...

Extra $1,000 on it. That might be because... Yeah, I think... Okay, no, you're at $3,000. Sorry about that. Yeah, because it's what, $2,365? So with the student loans and then the total paper, you're at $3,050. I added an extra number on there. Okay. It's a little high, yeah. Okay, but either way, what I was trying to get to in general with the down months and where you need to survive, let's say $3,000 or whatever, probably like $2,000.

after the minimum monthly payments for debts are gone, something like that, something like that. I don't know, $2,200. Yeah, probably. You need to make sure we have enough money that your overall budget is at that point...

Saved up as well. Yes. So money needs to be set aside now to subsidize the lower months. Yes. I'm not talking about an emergency fund. I'm talking about you're going to count that towards your income, the money that you set aside at some point because you have to. Okay. So let's say it drops like... Oh, and again, we made...

Say $4,000, which is better than any month you've done except for this one month. So $4,000, let's say that's what it drops to. Let's say you need $5,000 to hit your 50, 30, 20 after the debts are gone comfortably. Then you need to set enough money aside that you can withdraw from a special savings account whatever is extra that's necessary to hit that. Yes. Okay? Yeah. So...

Yeah. Say you make $4,000, but you need $5,000, so you need an extra $1,000 on a monthly basis. Right. And we're setting that aside in our good months. And that's... Yeah, so... And that's... That obviously goes in the 50-30-20 rule, right? That should... Eventually, once the debt's gone, with this, I don't know how to... I...

I'm just going to be conservative. I listed these in terms of priority. So I'm just going to go down the list. Yeah, IRS before the FAM. Okay. All right. Well... That's how you listed it? Yeah. Yeah, I think I did. Yeah. But yeah, student loans are last because they're not asking for it anyway. Not yet, but they will be here in a second. Of course. So honestly, what I would do...

What do you have in savings? $1,000. $1,000? Okay. This next month, I'd put an extra $2,000 in there because you need $3,000 to survive. So if something happens, you're covered for a month. Okay. So you can figure it out. Yeah, yeah. So right now, I think I have about $4,000 in my checking account. $4,000? Yeah, so there's about $4,000. I'm talking emergency savings on the side. I'm talking emergency savings on the side, not just left in our checking account because we always want a few thousand in our checking account. That doesn't even count. Right. So I'm talking in the savings, we save up to $3,000. So do that this month. Then probably...

Probably also cut the IRS check and they're done this month. And that's assuming that your income is fantastic. That's assuming that your income is fantastic. Then the next month we pay off their parents and we pay off...

Probably a portion of the special financing. Yeah. I, I actually told them to send me a payoff balance cause I really would like to get, I know I don't, I don't like probably have it immediately, but like I want, I want that gone cause it's $320 a month and it's a huge, it's a huge burden on me. So, um, yeah, I'm, I'm,

I plan on cutting these smaller debts out very quickly. And then month number three, you're probably paying off the rest of the special financing, then hopefully half the credit card. And then month number four, paying off the other half of the credit card. I think Verizon usually... I don't know. I would need to look at your contract. A lot of that stuff is baked in from the front. So it's like if you pay it off...

Probably paying whatever their extra stuff is anyway. Yeah. So we're probably just doing it until it's done. Look at your contract. See what it is. I know that's how it was when I did it. You're saying you can't pay it off early? No, no, no, no, no. So when I was getting... I haven't financed a phone in forever, so I do have some ignorance on this. But when I did a long time ago, it's like whatever their financing fee and everything that's baked into it, it's like, okay, if you go pay it off early, you're still paying whatever that finance fee is. They're just breaking that down on a monthly payment. Really? Yeah. But...

I don't know. I could be wrong. It also could depend on company again. So you need to look at your contract for that because I haven't financed a phone in a very long time. Well, I'm planning on switching carriers anyway. Verizon's service... I'd love to do that. So you think about you have the contract and then just save up what's necessary to just get a phone in cash, even if it's a little phone for a little bit. Yeah, that's fine. But if the contract is what I think it is, then minimum monthly payments are paid off or just do that other thing if you switch. Now, at this point...

We're five months in. We have student loans. We have $3,000 saved up. Student loans is what's left. And the phone thing we're figuring out depending on the situation. So what I would do for the student loans, and this is where you and me and your boy Dave disagree, which I love Dave, by the way, but either way, where we disagree just on math because I think math is the most important thing because you need to take advantage of compound interest now. You're in your mid-30s. We have nothing saved for retirement? No.

Oh, yeah. That's what scares me. So we need to start taking advantage. Time is your best friend. He often says, well, your income after you pay off your debt is your best friend. Right. What's even more important than that is time. Come on, growth. Right, right. So what we're doing for the student loans, whatever is sitting at 4%, we're doing minimum monthly payments until they're paid off. Okay. But anything above that, especially approaching that 5%, 6%, that you are just going crazy and you're paying it off. Okay. You're paying it off, especially the ones close to 6%. So...

What I would do for those is the avalanche method. Yeah, yeah, yeah. I would do highest interest rates first all the way down until you only have the ones that are left at like around 4%. Okay. Slightly over is fine. And then those are minimum monthly payments until those are paid off. Once you're at that point where only those 4%-ish interest rate loans for the student loans are sitting there, then the phone thing is whatever. That's where... Say $2,200 is necessary to survive. Well...

Yeah, I mean, that makes sense. Let's save up 12 to 15,000 hours for an emergency fund. Right, right. As quick as you can. Six months of expenses. So, yeah. And if you're... Okay, this is where it gets complicated because we're doing so much on hypothetical income. Hypothetical. You're not salary. I mean, I want you to grind and you can probably do well this summer, but we probably also need to be setting aside a thousand dollars a month.

For... Adding 1,000 hours a month. I can do that. Throughout the next six months. Let's say six months good, six months bad. You know? Hopefully it's not like that. I don't know. But either way, haven't had the track record. Yeah, I mean, that's fair enough. But like, it's... I'm getting good and I work hard. No, I believe that. I believe that. I'm going to make a pretty good amount of money. I'm fairly confident about that. Okay. Confidence is good. I can understand how you...

I just have to be realistic about it and be conservative about it because being anything other than that would be bad. I can appreciate that, yeah. Being a little conservative with everything, so that helps. So that's why I was talking about some of these debts being paid off a little slower than what it would look like if you put all your $9,000 towards it because you're probably putting an extra $1,000 aside on a monthly basis for the slow months. Also, are you setting about 30% aside for taxes? Yeah. Yeah.

Are you? No, but I will. Well, you start doing that. Yeah. I understand that. Yeah. I'm throwing everything I have at that. So, and, you know, I know you probably think I'm spending it on energy drinks, but yeah. Well, I mean, highlighter doesn't lie, but either way.

Yeah, you need to start doing that immediately. Yes. Did you do that for the 9,000 passed that you made? No. So you need to make up for that this next check. So 60% of the next check is set aside, which sucks because you're not going to make any progress on debt at that point. That's fine. But for a month because you don't want it to turn into future debt and the IRS is not someone to f*** with. Of course, yeah.

We're doing that, so that takes away from it. We're also taking away $1,000 to save for the future. So, you know, we're really starting to dwindle away this nice paycheck, even if it's $9,000 every single time. And that's why I'm calculating it's going to take a little longer than you probably think to pay this off because we're going to be smart about it and not get ourselves into a stupid situation where we're first to get more debt anyway. Of, let's say, half the student loans, no, subsidize them, subsidize.

Student loans. Of the $50,000, let's say $30,000 are the ones that we want to pay off. If you're able to put $3,000, $4,000, let's say $4,000 because I'm just going to be optimistic with you. $4,000 you can put towards it on a monthly basis. That's still going to take seven and a half months. So we're at a full year before we start saving. No, we're at a year and a quarter maybe before we start saving our emergency fund. Then you want to do the emergency fund. That's probably going to take an extra quarter. So a year and a half. Okay.

Okay. In the incredible situation of you're just doing great, great, great. Right. Of which we only have one month. So you're doing great, great, great and it's a year and a half. If you're not, maybe it's like a three-year process. But either way, you can do it. Yeah. Because you have the control to grind in the sales position and you can go find a better sales position if you ever need to. If this one starts to not be working out. Right. So...

I think it's going to take a year and a half to three years. You've obviously shown that you're starting to cut back on things, so I'm not super concerned with that aspect. Usually I have to dig in, make sure people know they have to cut back on everything. Your main concern is the income situation. So if it's good, a year and a half. If it struggles, three years, four years maybe. But what you need to do when you have the fully funded or emergency fund and you're still doing the minimum monthly payments on student loans that are 4% or less –

You're far behind. Yeah. 50-30-20. Sure, 50% can go to needs. 30% is going to investing. 20% is going to wants. Awesome. It might be 35%. I'm okay with that. Start doing some compound growth math, just using a compound calculator, and do 8% for the market. Okay. And figure out what you need to hit a number that you're comfortable with, and then take 3% off for... 3% to 4% off for inflation as well to see what it would be like in today's money. See, this is...

One of the reasons I want to reach out to you, because like, I don't know, like, do I go with an IRA? Do I go with a Roth? You might. Well, if the income's as good as you think it might be, you might have to do a backdoor Roth anyway. But yes, yes, you'll want to do that for sure. Okay. And then you can just do a brokerage. If you set up like an...

Are you a contractor? Yes. Yes. 1099. I mean, you can take advantage of some self-employment options. Oh, I'm trying to figure it out because you're a contractor for a company. If you form your own... Well, we can loop back to that when that happens, which you're for sure doing...

At least a backdoor Roth IRA, and then if your income's not as good, hey, just, you know, Roth IRA. Okay. And then whether or not you have, like, a self-employed, like, 401k thing set up or, like, you're, you know, you're an LLC, connected to your LLC. Right. In a way, like, similar to what I do. Then...

If you don't have that, then just brokerage. Okay. Brokerage. Okay. And I won't tell you what to invest in. I'll just say for myself, I do low cost index funds. Okay. Target retirement funds, which are good as well, which starts off more aggressive and then weans to more conservative as it gets closer to that retirement date. Those are fine too for myself. Gotcha. Nice. So, yeah. And also, so one of the big things I wanted to ask you was, so I was in, I was in the military for, for five years. I was in the army and,

So I have a VA loan. Yeah. For home. Right. Right. Yeah. So I was thinking at the end, I didn't know because the student loan payments are going to start up. That's a lot of student loans to pay off too. Right. Yeah. But you can write off the interest that you pay, right? On your taxes. Depends on your income. Yeah.

Right. Yes, yes. I think your income is going to be to a point where you can't write off the interest on your student loans. Okay, I did not know that. That's good to know, yeah. I wasn't able to write off the income for my student loans once I got my sales position because I did pretty well in sales. Okay. So should I be... Because I wanted to buy...

If I fix all of this, I want to be able to get a house. I want you to get a house too. Our main concern is obviously getting another desk. And then I need you to do 30% towards investing because you can have a house all day. But if you don't have any money to supplement what you need to survive outside of that eventually, then there's no point. So we're definitely saving up for retirement, 30%. Now what you could do is try to get your...

to like 40%, cut your wants to 10%, then you can save up a total of 20% in a separate savings to, you know, well, if you VA home, well, it's hard. I would still, I'd still want you to put money. My fear is, my fear is,

Getting a home, nothing down, everything. Take advantage of the good situation, fine for fine. Minimum monthly payments. Yeah, exactly. Is what starts to make me nervous, especially with a... Because it'll raise your payment up and then you're getting a smaller or worse house. And your income is very fluctuating depending on things. So when you do, make sure you're either...

Take advantage of that loan on a house that you can afford or you're also putting money down on a house you can afford at a more expensive cost. But either way, you're just going to have to figure that out as that comes. What should I be looking at for a mortgage payment? I don't know, dude. Because first of all, it's going to...

You're probably not going to do it for like two, three years in the best case scenario. Okay. So we need to see what income is at that point, what the job situation looks like, you know, what does solar look like at that point? Are you still even in that same position? If you are, is it going as well as you think it is?

So it just, it's, there's so many variables at that point. Okay. So many variables. Don't be afraid of a starter home. One of my friends is afraid of a starter home here. Don't be afraid of a starter home. 20 years out of date is okay. 30 years out of date is okay. Do some small fix ups. That's okay for a first time. You don't need to get into a perfect home. Right. I was saying that, but I know a lot of people are crushed when they can't get their dream home as their first home.

Yeah, I'm not worried about that. My first home was incredibly out of date. Really? And that's okay. Yeah. I mean, even this place is still out of date. Yeah. So, yeah. Cool. That's where the home purchase comes in. I wouldn't think about it right now. Okay. We're getting to the point where you can start setting money aside, but you're not even 50, 30, 20 right now anyway. You're just trying to pay off the debts. Yep. And the student loan's not great. Credit card, very bad. I will say this. Okay.

I think there's a hopeful thing here that we're all feeling. I think people in the audience are as well. I don't want to be the Debbie Downer. With where the debt is at the almost $7,000 of credit cards, owing parents, owing the IRS, not setting money aside yet in taxes, and where the student loans are as well, and the special finance...

If this income is not what was last month and it comes down to $5,000, $4,000, we start getting into a tricky situation where this starts to get paid off. And that's where I'm a little nervous. So prove us wrong. Absolutely grind your ass off and go crazy. Make $10,000, $15,000 a month. Do it. I have nothing else to do. But...

I am nervous of that because sales can happen flow. Well, I am too, but it's, you know, it's not worth thinking about, you know, getting. Sure. Yeah. I mean, you won't, you won't, you don't want to be in your own head, but yeah. Um, also just, I mean, but from just sitting on the side of the table, just saying, okay, everything's going to be perfect.

I don't know. So just keep in mind, do side hustles if you have to. But there is certainly a path out of this and a path towards you being a homeowner in your late 30s, early 40s, and being a millionaire by the time you retire. But things need to continue well in order to do that. And that's your biggest variable right now. Yeah. So what would you say is the number one thing? Is it stop...

obviously stops spending so much, but is like... Yeah, well, you can't spend so much. I mean, that's something you just have to take control of, but the biggest variable right now is the income. What's it going to be? Yeah, right, right. So you can sell your ass off, but if people just start, for some reason, like, subsidies go away from solar for whatever reason, like...

I don't know. I think you're... It could happen, but it's not going to anytime soon. Maybe. I don't know. We could have someone come in in the state administrations and federal administrations who just want to move away from solar. Sure. Like, for whatever reason. I don't know why it might be. I don't want to get political, but anything can happen in the political level that is beyond our control. And if that happens...

People are less inclined to do so because it still impacts their wallet. The wallet is going to be what wins at the end of the day. If they can get comparable rates to just whatever the local energy companies are, then financing or doing a massive purchase of solar, something of which you have to eventually replace, something of which is a pain in the ass when you have to get your roof done.

you know, there's a lot of variables. I'm not saying that's going to happen. Just that's, that's the biggest variable. You asked what the biggest variable is. That's what it is. Okay. Yeah. So income better, you can control it. The better you will be able to control the whole situation. Yep. Yep. Well, I mean that I plan on making when I, when I started the year, when I started out this year, I was, my plan was like, okay, well I'm going to make a hundred thousand dollars this year. The first a hundred K. Um, so yeah,

and it, you know, it took a slow start. I knew it was going to be slow, but I wanted to focus on one thing and get good at one thing and not be so spread out. Right. With like a random business over here and doing roofing over here. I wanted to just focus on one thing and get really good at it so that I could start generating, um, the most amount of money I could. So, um, and it's, it's,

It's getting better and better every week, every month. Any final thoughts? I think that's everything. We talked about the house, and then we talked about retirements. That was a big question I had. What should I do about an LLC? LLC.

Like, should I form an LLC? It's an easy way to manage your business expenses if you have an AMSR, some of the stuff you can write off. It's used as a pass-through, essentially. But I think what's best in those situations is, especially now you are your own business more than ever before, get a dedicated tax person. Okay. And they're going to help you with that. Yeah. Cool. That's what's going to be best. Yeah.

Sounds good. Sounds good. For Michael, again, I don't want to be a broken record, but it just all depends on the income and then the discipline around his spending when it comes to that income that's coming in. For his hammer financial score for right now, his spending, especially according to all the income we've seen except for that one month, it's pretty good.

We'll be right back.

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