Transcription
I am absolutely buzzing because I just deposited my 401k. I deposited my 401k cuz I took it all out so that I could pay off my credit cards. I was drowning in credit card debt because I had lost my job when I was traveling Europe. So, I had to put everything on my credit card. I was paying like $1,300 a month in credit card debt.
This truck was one of the worst financial decisions of my life. At the time I purchased it for around $125,000. I put down around $50,000 and my payment came out to around $13.75 per month. Currently, I still owe around $69,000 on the balance.
Financial literacy in the US has steadily declined over the last 10 years with people failing to answer questions about borrowing and earning money. Questions as simple as what is a loan?
"Did you have a loan on the car?"
"No, ma'am."
"So, you had no loan?"
"No, ma'am."
"The car cost $1,700."
"That was the down payment. The The whole price it was like seven."
"So, there was a loan?"
"They financed it."
"Well, that's a loan."
"Oh, okay."
"You put down a down payment and the rest you took out as a loan. It's financed. You had to pay it back."
"Yes, ma'am."
"The finance company gave you a loan."
"Nobody gave me a loan cuz it was car payments on it. So, only only money that was given was the $1,700."
Now, people in the audience laughed at her, but every year the TIAA Institute does a financial literacy survey and this year Americans answered only 47% of questions correctly on average. A statistically significant decline from the prior year and the lowest result in the survey's 10-year history. And the group that scored the lowest was Gen Z, answering only 38% of questions correctly on average.
Let's break down my monthly payments on my 2026 G80 M3 competition. I have the carbon buckets, the carbon interior package, extended leather, and of course xDrive. So, with that being said, the MSRP on this car was just about 100K flat. I traded in my 2022 Chevy Silverado RST and I got $12,000 in equity, so that went right into the down payment for the M3. I financed it through BMW at a 6.7 APR for 72 months. Now, with that being said, I also do not plan on keeping it financed through BMW. I'm going to refinance it through a credit union with a lower APR. My total monthly payment is $1,500 and if I didn't put anything down, it would probably be roughly around 2200. That's my monthly payment on my G80 M3.
"You know these dealerships love to see young people pull up. We can go straight to the comments. $1,500 for 72 months at 6.7% open the schools back up. $1,500 a month is a mortgage. That's $120,000 for a car which value depreciated to 75,000 as soon as you drive off the lot. Pay for ham see right now." These comments go on and on. People roasting her for her bad financial decision, but that's the thing. A young person not knowing any better financing an overpriced car to flex on TikTok. Now, that's the dream customer. And it's not just car payments. People are so comfortable with debt now, they post it as content.
"I owe Klarna $2,688.90. I have to pay $369 within 7 days, but I'mma pay that off probably tomorrow. Hold on, it get worse. I still owe $1,294.74 for the month of July. Oh my goodness. I don't got money orders. I don't got gift cards. I don't got clothes and see the train. I don't pay for hotel room. I'm not finna ask Keisha for $100 so she can tell my business to any and everybody. If I need to depend on someone, it's going to be these mother apps."
Her justification for using Klarna is so that she doesn't have to borrow money from a friend and tell them her business. Yet, here she is telling all of us her business. This only serves to normalize debt. It's okay, girl. The government is trillions in debt. I owe $200 on my credit card and 1,960 to a firm. It's yours to spend, friend. Just keep a good balance so that it doesn't stress you out. Klarna has done some crazy marketing to make people believe that they're not a credit card company because what do you mean it's yours to spend? It's not your money. You're borrowing it. And of course, people bring up the national debt, which if you don't know, just hit an all-time high of $39 trillion. And I'm not disagreeing that it's hypocritical for the governments to be trillions in debt, but the difference is these corporations will get their money.
"I was supposed to have a court date today. Yeah, um I ignored a debt collector and they sent it to a law firm to sue me. And yeah, I got sued by a debt collector. And I thought the chances of that happening were like slim to none. Like it was only a thousand dollars. Do they really want to like have to go after me for a thousand dollars? Like what is that? No, they did. Yeah. They sent the constable to my house with the papers saying that I need to sort this out."
Just this week I got extra hours, which made me become a full-time working here 32 hours compared to the 12 hours that I was getting. As soon as I accepted the new hours, y'all, I got a notification that I was going to get garnished out of my check. I realized that it is Capital One and they're claiming $6,275.
But despite all of this, the debt keeps growing. Credit card debt now sits at a staggering 1.25 trillion and roughly 13% of those balances were at least 90 days delinquent in the first quarter of 2026, which is sobering when you consider that many people don't even understand how interest works.
"We've paid $9,286.32. We only have $952 of our actual mortgage paid off. 6,000 of that 6,423.23 has gone to interest. And 1,911 dollars has gone to taxes and insurance."
"6,000 to interest?"
"6,000 to interest." People are financing boats, cars, houses not understanding that their loan has interest and that interest is paid back to the bank first. And this tracks out with the survey. Only 40% of people correctly answered a question about an interest rate that compounded annually. And now we're seeing the consequences. Young Americans who bought when house prices were at their peak. When you bought a house in your early 20s, but it ended up being your worst financial decision and now you're 24 and can't leave because the equity is giving negative. So, she's under the impression that after only owning her home for 3 years, it should have substantially increased in value. And that may have happened during the pandemic, but we're actually seeing home prices go down. Going to the comments, we see more of this financial situation she's in. The interest rate on her loan is 7%. The house is now worth $30,000 less than what she paid. And we also learned she bought at the high end of her budget, not realizing her payments would increase $600 within 2 years. Based on this post, I don't think she can afford her mortgage anymore, but she also can't afford to sell the house. And she's not alone. Many people are financing houses not understanding that the mortgage is not fixed. It can and does increase.
"My wife and I bought our house uh end of 2024. So, we've been here for almost a year and a half. Um and this has been our basically our mortgage payment every month, 3741.72. Our our property taxes recently went up. Forgot exactly what it was, but um Yeah, that's her new amount right there. 4536 So, we went up $750 per month. Over $7,000 a year more. But, yeah, this is how people aren't able to stay in their house forever and get lose their houses. Oh, crazy."
The cost of everything keeps increasing and home ownership is no exception. US home insurance rates have increased cumulative 46.8% from 2020 to 2025 and property taxes are up 30% nationally since 2019. So, how is a first-time home buyer supposed to realistically budget when the cost of home ownership jumps 30-40% in a 5-year span? People love to say, "Just budget better." But, budgeting requires knowing what's coming and nobody teaches you what's coming.
"Do you know how to do your taxes?"
"No."
"Do you know how to build credit?"
"Mhm."
"Do you know what a 401k is?"
"Absolutely not."
"Do you know how to mail a check?"
"Not a clue."
"Do you know how to balance a checkbook?"
"Nope."
"Do you know what a mortgage is?"
"No."
"Do you know what the powerhouse of the cell is?"
"The mitochondria."
"What's the Pythagorean theorem?"
"a squared plus b squared equals c squared."
"Do you know what moon phase this is?"
"Waxing crescent."
"Do you know the underlying theme for of Mice and Men?"
"The impossibility of the American dream."
Who benefits from a financially illiterate population? We can look at the comments. They strictly teach us how to work, not live. Teaching us anything but to survive. That comment has almost a million likes. I'd argue that parents should be teaching their kids something also. And I agree with this comment. It shouldn't be school or parents. Kids need both. School gives you the mechanics and parents give you real-life examples. But, what happens if you have parents like this?
"I signed up to be a parent, not a part-time unpaid teacher."
"Do not piss me off. What do you mean you did not sign up to be a part-time unpaid teacher? The day that you signed up to have a child is the day that you signed up to be an unpaid teacher. What do you think parenting is? The problem with kids nowadays and why they're so disrespectful and so uneducated is because of parents like this. In order to keep my sanity, I have to tell myself that this is rage bait because what do you mean a parent isn't a teacher? Kids today can't read, they can't do math, and we wonder why. This is why. These children will grow up to be illiterate adults and become the Big Bank's favorite customers. So, if school doesn't teach you and your parents won't teach you, what's left? Signing your life away to a student loan before your frontal lobe has even developed."
"I owe a mortgage amount of student loans. I borrowed $96,000. I have paid $165,356.46 and I still owe $220,810.73. I have a bachelor's and master's degree. I am a PA and I make good money. I'm not going to lie. Unfortunately, that good money is still not enough to pay this, right?"
Student loan companies have been lobbying, the fancy word for bribing, our politicians, the people who are supposed to be serving our best interests. Instead, they let these companies prey on people at the fresh age of 18. I've paid $250,000. My original loan amount was 302,000. I currently owe 408,000. Wait, my daughter and myself, because I co-signed, have a Mohela loan for $5,000. Do I need to be worried? This comment is the crux of this video. Yes, the school system fails to teach financial literacy, but people are also failing themselves. A single search online reveals multiple class action lawsuits against Mohela. And sadly, this is the mother. If she doesn't know, then the daughter definitely doesn't. There's a lot of concerning data in this survey, but the stat I keep coming back to is comprehending financial risk. It's the weakest area of all. Only 36% of risk-related questions were answered correctly, and more concerning than the number itself, the survey identifies risk as the one area where performance is consistently low across all generations, showing little improvement with age. Meaning, if someone doesn't understand compound interest, it doesn't improve as they age, which means it's a lifetime of corporations taking advantage of them. School should have taught us this, but two things can be true at once. School failed us, and by not learning, we are failing ourselves. The difference is one of those we can actually fix.
Explain in finance words like you have brain damage. Cookie cost $1 yesterday, cookie cost $2 today. Same cookie, money buy less cookie now. Inflation. You say, "Give me money now, I pay back later." APR is the extra money you owe for saying later. Big number bad, small number good. You give company $1, now you own tiny parts of company. Company does good, your tiny part worth more. Company does bad, your tiny part worth less. Your piece is very, very small though. Like a crumb. You want to borrow my toy truck, I say, "Okay, but leave your teddy bear here." So, I know you're going to give me my toy truck back. The teddy is collateral. If you don't give me my truck back, you're not getting your teddy bear back.