Transcription
This episode will make you question everything you thought you knew about wealth because it's not just about how much you make. It's about where you live. Uh, there are five states in America that are literally designed to keep you broke. Your zip code is either working for you or it's working against you. People are making over $90,000 and still going into debt just to survive. Anthony O'Neal is sounding the alarm. The system isn't broken. It's working exactly how it was designed to keep your pockets empty and your dreams on pause. Where we live matters more than how much we actually make. If you're successful in California, they're taking more than 13 cents of every dollar you make just in state income tax. You need to watch this because financial freedom might mean packing your bags. We've been lied to about the American dream.
Family, I just read an article uh actually this morning after I worked out uh that's going viral right now. Um, and it had me thinking. I mean, it really had me had me thinking. Uh, there's a study um that looked at all 50 states within the United States of America to find out where Americans are actually thriving and surviving when it comes to saving money and getting a head start when it comes to building wealth. And I was like, "This is interesting." And as I was reading it, I was just I I got fired up. And and if I'm being real with you, the results are going to shock some of you. Uh, there are five states in America that are literally designed to keep you broke. And if you're living in one of these states, I need you to hear this. I'm about to make some people a little uncomfortable today. And and I know some of you all are going to be in the chat section in YouTube saying, "Anthony, no, no, no, no, no." But I care more about your financial peace, your financial health, and your financial future than your feelings at this present moment when it comes to this particular state.
And what I love about this is with me being a professor at Virginia Union University, uh, one of the things throughout my course in the consumer economics and financial literacy course, I'm telling these young people, I'm like, "Hey, you're getting a degree. Your biggest wealth building tool is margin. Right?" So again, I've said this several times on the show. If your income is here, right? And if your um expenses are here, in between is your margin. I need to get an iPad in here so I can start drawing this stuff out so y'all can really see it. Um, and I tell young people when you graduate college, don't go to the most popular state. Don't even look for the state that offers the highest income because if your income is high and your expenses are high, you don't have margin. So you may need to look at what is the best state that gives me the best potential to have the most margin. So this means you may make less income. But if the cost of living is extremely cheaper, then that means you can have more margin. When you have more margin, you can do more saving, more investing, more whatever you want to do with your finances to get you to the point to where you can eventually move to the state that you want.
So, listen, I don't want you to get mad at me today. I'm just going to be telling you what the data says. And family, listen to me. This isn't just some random open opinion piece. These are researchers who looked at the seven key factors. Income levels, cost of living, taxes, housing costs, and the debt ratio, and all the stuff that actually matters when you're trying to build wealth. And here's what this study found that blew my mind. Y'all think making good money means you can build wealth anywhere. That's absolutely wrong. Let me tell you what they discovered about Hawaii. The average family in Hawaii has a household income of $91,000 a year. That sounds good, right? We're $9,000 away from $100,000. But according to the research, they still can't even save money. Aka, they're living paycheck to paycheck. Why? Because the state is designed to keep you broke, aka it is expensive to live there. And before you say, Anthony, that's just Hawaii. Nah, family. This study identified four other states doing the exact same thing to your money. And the researchers looked at everything and the results don't lie.
So here's the thing. We've been lied to about the American dream. We We've been absolutely lied to about the American dream. They told us, "Work hard, make good money, and you'll be fine. Work hard, make good money, go to school, join the student loan debt, buy you a home, and you'll be fine." But nobody told us that where you worked hard matters. That where you lived matters just as much as how hard you work. Oo, we I've been teaching financial history for years and I keep seeing the same pattern. Good people working good jobs, making decent money, but they can't get ahead. And when I look at where they live and how they live, boom, there is the problem. Why are you living in California making $55,000 a year? Because this study just confirmed that what I've been seeing in my community, in our community, your zip code is either working for you or it's working against you. And if it's working against you, we need to have a serious conversation about your financial future.
Family, I told myself, I'm not going to scream at y'all this year. But this data has me really flipping out because I'm like, "Wait, wait, wait, wait, wait, wait, wait. My people are out here grinding. My in the black community, they're out here grinding. They're getting up every single day and busting their rear ends, trying to be a good steward of what God has given them. But some of them these states are picking y'all's pockets. Let's be honest, most people are stressed and stuck in the paycheck to paycheck cycle because they were never taught how money actually works. That is exactly why I built this channel. Every week, my team and I are breaking down how to master your money. How to get out of debt, save, invest, and build wealth without borrowing a dime. No fluff, no hype, just real money talk that actually helps you win financially. You see, because money impacts every aspect of our lives, our peace, our relationships, and even our future. If you don't take control of it, it will control you. And if you're tired of just surviving and you're ready to build wealth God's way, you're in the right place. Over 900,000 people have already subscribed to our YouTube channel with over millions of download on our Apple and Spotify podcast. Now, when we hit a million on YouTube, we're giving away $30,000 to help you get out of debt and to start building legacy. So, listen, don't just watch. Hit that subscribe family. Join this community. Let's build real wealth. Let's build real financial freedom together. It's your boy. Hit that subscribe. Let's get back to the show.
And so I want to give you the five wealth killing states that if you're struggling financially and if you're living in one of these states, I hate to say it, it's probably time for you to move. Period. Period. Because according to this research, here are the five worst states for building wealth. State number five or um, this state came in fifth worst. And when you see these numbers, you'll understand why. The study found that in this particular state has a 9.9% income tax rate. Let me put that in perspective for you. That means if you make $100,000, they are going to be taking out almost $10,000 just in state income tax before you even get to federal tax. But it gets worse. The research showed that over half of renters in this state, watch this, 50% plus, are spending more than 30% of their take-home pay in housing. This is what we call house poor family. And 35% of homeowners are in the same boat. So, let me do the math. Let me do the math. All right. So, now we're at $90,000. Times that by 35%, you're spending $31,500 a year. A year just to live. Now, this state does have one thing going for it. I'm going be honest with you. No state sales tax, but that one benefit gets wiped out simply by everything else they're taking from you. It makes absolutely no sense.
Now, state number four. Let's go to state number four. Now, this one surprised me when I read it because I lived here. I lived here when I was younger. It's Florida. The state everybody's moving to because of what? No state income tax. But the study ranked it fourth worst for saving money. How is that even possible? Here's what the data shows. 56.8% of renters in this state, Florida, are house poor. That's more than half. And the cost of living is higher than most people even realize. So yeah, they're not taking income tax, but they're getting you everywhere else. Listen, listen, listen. I I I've lived in two state, no state income taxes, Florida and Tennessee. And it sounds good on paper, but if you can't afford to live, what's the point? The research has found that Florida overall cost structure still makes it hard for people to save money and to build wealth. You're dag on right. Which leads me to number three. I'm not blown away by this one. The third worst state to live in. Massachusetts. See, Massachusetts came in third worst. And this one is going to hurt some feelings because the study showed Massachusetts has the second highest cost of living in the entire United States of America, even with a median household income of $93,550. Pause. I'm going to pause right there because when I start using these words and start quoting these stats, I want y'all to understand the difference between the word average household and median household. Average is if there's 10 families making all this stuff, they put all their stuff in that and then they divide that by 10. That's the average. When it says median, it means that 50% of the people are below $93,550 and 50% of the people are above $93,550. So the median number is $93,550 for the families, which is the second highest in America. But people are still struggling to save. Anthony, how is that possible? If if the family is making almost $100,000 a year, how was why? Let me tell you why. Because a study showed that because nearly half of all renters and close to 36% of all homeowners in Massachusetts are house poor. So you're making 94,000, 6,000 away from six figures and still can't get ahead because everything costs so much. Family, this is what it means. This is exactly what it means when I say income doesn't equal wealth. You can make six figures and still be living paycheck to paycheck because a lot of us are fighting our location every single day.
The second worst state to live in. I think all of you all would know it. If you if you want to guess it, guess it. I grew up in this state and I left the state because I just knew I can't I can't win here financially. My family still lives there and it's California. California, the land of dreams and broken bank accounts. According to research, California ranks second worst for saving money. And when you see these numbers, you're going to understand why. You see, California has the highest top marginal income tax rate in the nation, 13.3%. I want to break this down for you so you can understand this. If you're successful in California, they're taking more than 13 cents of every dollar you make just in state income tax. Then they hit you with a 7.25 25% sales tax on top of everything that you buy. But here's the kicker. Hold up. The study found that 53% of renters and 41% of all homeowners in California are also house poor. Even with the median, don't forget what I told you about median. The median household income is right around $85,300. People can't save and invest money because the state is designed to take the majority of it. I have family, I have friends in California making $150,000 a year in a household and they're still living paycheck to paycheck. While some of the issues that we face when it comes to our finance is a personal finance problem, I think a lot of it if you're living in one of these states, it is it is a location problem.
And the worst state to live in, I said in the very beginning, is Hawaii. The worst state in America for building wealth, according to this study, is Hawaii. Now, don't get it twisted, man. I I believe Hawaii and California are two of the most beautiful states ever. I know Hawaii is paradise, but paradise is expensive. Hawaii has the highest the highest cost of living in the entire country. The second highest individual income tax rate. And get this, despite having a median household of $91,000, Hawaii residents have the highest household debt to income ratio in America. That means people are making over $90,000 and still going into debt just to survive. And the study showed that over 56% of renters and 38% of homeowners are house poor. I want to say this upfront. When you're making $90,000 in your house and you still can't save any money, you still are living paycheck to paycheck. That's not solely a you problem. That is a system problem. That is a state problem. That is a cost of living problem. Because here's what the financial gurus who are social media influencers only won't tell you. Where you live matters more than how much you make. I'm going say that one more time. Where we live matters more than how much we actually make. And this study just proved it with hard data.
You see, God gave you a brain. He gave you a brain to be a good steward of the money that he trusts you with. And part of stewardship is making smart decisions. Smart decisions about where you plant your family. I've seen people making $50,000 in North Dakota building more wealth than people making $100,000 in California. Why? Because they're not fighting their location, they're working with the location. And can I be honest with you? Some of you all are getting defensive right now watching this. You're thinking, Anthony, I can't just up and move. And I get it. I'm not saying that because I understand moving is hard. I've moved five times my entire life. Moving is expensive. Moving means leaving family, leaving friends, leaving church, leaving your community, leaving your comfort zone. But here's what I also need you to understand. If you stay somewhere that's designed to keep you broke, you're not just hurting yourself. You're you're also hurting your children. You're also hurting your grandchildren. You're also hurting your community. You're also hurting your local church cuz you ain't tithing. You're breaking the cycle of generational wealth before it even starts. Listen. Listen. This isn't about being disloyal to your state. This is this this is about being loyal to your family's financial future. Oh man, watch this. This is not even being this is not even about being disloyal to your family. I know some of y'all saying, "Man, if I leave, man, my mama, my daddy, my grandmama, so you going to stay living paycheck to paycheck? You're going to stay having no margin because of your family?"
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One of my assignments that I gave to my students at Virginia Union was to they had to come back and write a two-page paper. The first page paper was what do you want to do? They had to give me three careers that they will start doing research on um when it comes to their degree. So, the career has to be aligned with their degree. Uh, because I don't believe that you just get a degree for a sheet of paper to show that you did something consistently for three to four years. F that. No, no, no. I want you to get a degree that you can use. If you paid all this money for it, use the degree. And so, I have all my students, hey, all right, man. I want you to write out what are the three careers that aligns with your degree. Okay. Once you give me those three careers, the next step is give me the average salary for those careers. Okay, cool. Great. Then the next is I want you to find the best state to start your career in. And when I give this to them, man, they all come back with the best state that has the highest paid income. They bring the presentation and at the end of it, I shock them all. I'm like, "Okay, cool. Let's talk about margin." Then I teach them about margin. Then after I teach them about margin, okay, listen, this is the key thing you're looking for. Now I give them another assignment. Now, I want you to go back, do the exact same paper, but I need you to come back and give me the five best states that will position you to have the most margin.
And I did the research for you all. If you're looking to get back on your feet, if you're looking for a fresh start, especially in the day and time of working virtually, I'm going to give you the top five states that you should consider moving to to give you some breathing room to help you build margin. Number five is Nebraska. Nebraska came in the fifth best, and here's why. The median household income is $78,000. And that money goes further than almost anywhere else because the sales tax is only 5.5%. And the property tax rate is so reasonable at 1.4%. But here's the key. Only 42% of renters and 26.4% of homeowners are house poor. So this means over half of individuals are not house poor. So let's go deeper. This means that most people can actually afford where they live and have money left over to save and invest.
Here's number four, South Dakota. South Dakota ranked fourth best. And this is where it gets interesting. The median household income in South Dakota is $67,000. Lower than some of those wealth killing states that we talked about. Well, here's the thing, right? South Dakota has no state income tax. That means you keep more of what you earn. And the study found that only 24.6% of all homeowners are house poor. I mean, 75% of people again can actually afford to live there. Your money can't actually I'm sorry, not can't, but your money can actually work for you instead of just covering basic expenses.
Number three, Iowa. Iowa came in third, and the numbers tell the story. Median household income of $76,000 with a reasonable 3.8% top income tax rate and 6% sales tax. But here's what really matters in Iowa. Iowa had one of the lowest household debt to income ratios in the entire country. So this means in Iowa, a lot of people are not going into debt just to live. They're living within their means and building wealth.
Number two, Wyoming. Wyoming ranked second best and this state is a wealth builder's dream. The cost of living is low. The median income there is $73,000 and they have some of the lowest property tax rates in the country. But the best part about Wyoming is that they had the lowest percentage of renters burdened by housing costs. Your housing money can go toward building equity instead of for just surviving.
And number one, North Dakota. North Dakota. Here's why. Median household income is $78,000. One of the lowest costs in America when it comes to tax rates, right? The study found particularly in Iowa, I mean, I'm sorry, in North Dakota, that less than 40% of renters and less than 23% of homeowners are house poor. This is pretty much letting us know that people have money left over after covering their bills. Family, do y'all see the difference? In the wealth killing states, most people are house poor. In the wealth building states most people are not. It's that simple.
So, I want to give you some practical action steps as we end today's show. All right, Anthony, you you gave me the top five places not to live. I might be in one of them. Anthony, you also gave me the best five to live, but all those states, we can see why those are some boring states. Those are some boring states. Nothing out there. Bunch of rural area. If I'm a black man, probably a bunch bunch of white people, which is nothing wrong with that. Like I probably It's probably not, you know, a state that got a lot of things going on for itself. So, of course, it's going to be cheap to live there. But what's most important to get the margin to get yourself out of a healthy place financially to get your income up so that you can eventually move to the state that you desire because if you're stuck in a wealth killing state, here's the very first thing that you need to do.
First, you need to maximize your savings rate. The study mentioned uh that the national average interest rate for savings account is only at 0.38%. And that is 100% garbage. You need to get your money into a high yield savings account that is paying like 4% or more. There is a long list of um uh um high yield savings account that are offering. My favorite is SoFi, but what I'm going to do is I found a list of like four of the top ones. We're going to put that inside of today's show notes. All you have to do is go to anthonyoneal.com/savings. Again, that is anthonyoneal.com/savings. And I want you to move your money. If you're getting anything less than 4% or anything less than 3.5, I need you to move your money out of that and put it into this. No matter what state that you're really in, we need to start maximizing and and making sure that that money is making more money. All right? So, go to anthonyoneal.com/savings. We're going to have that inside of today's show notes. But your money needs to work harder since your state is working against you.
Second, I need you to attack your taxes like your life depends on it. Max out your 401k. Max out your IRA. Max out your HSA. Every deduction you can find, you got to max it out. If your state is going to take your money away, at least reduce what they can take. Why are you giving your money to the state when you could be giving your money to your future when you could be investing that and and building your wealth up?
Third, stop being house poor just to impress people. The study showed it did show that housing costs are the biggest wealth killer in these expensive states. So, I need you to downsize. I know I know Anthony downsize. No, what? Man, listen. My sister and brother in in love with my uh four nephew, my three nephews and one niece, family of six, they downsized. They went from a four bedroomedroom to a twobedroom on a ranch. If y'all follow Belief in Fatherhood, I bet um and Glenn Henry um they downsize. They downsize one to get closer as a family, but then two to create more margin for some of their dreams that they desired. They wanted to buy an RV and travel the world with their kids and expose them to different things because Yvette is super educated. She's the smartest out of all of out of all of us, right? And she homeschool. So, she wanted to expose their kids to some things and and do different things. And so, they wanted to downsize to create more margin. And it's hard to do that in California. So, they downsize a family of six into two bedrooms. Husband and wife had one bedroom and a kids four kids had one bedroom. You got to do whatever it takes to get your housing costs under 30% of your income. You got to do whatever it takes to to to go further. Um um um when when you want to shoot an an arrow, you don't just shoot the arrow like this. You got to bring that arrow back. You got to let it sit there and gather all the tension up and then you release it and it goes forward. So sometimes stepping back positions us to shoot forward even faster. But a lot of us know we care more about the image. We care more about being being comfortable. No, nothing happens inside of your comfort zone. Nothing happens. We have to be willing to be uncomfortable. We have to. This season for me is uncomfortable. I'm working my butt off. I'm writing a brand new book. I'm I'm I'm building a company and shifting the company. I'm in school, finishing my my my I finished my MBA in the month of September. Shameless plug. Your boy is super educated now. And then I start my doctorate in October. That's right. Your boy getting a doctor doctorate degree uh in finance and investing. We're going to have a show about that later. We can celebrate that later. So, not only am I in school, like I am uncomfortable, but I understand because I'm doing all this, I had to scale back on my business, downsize my team, but I understand I got to come back so that way I can shoot even further.
And the fourth is you got to start planning your exit strategy. I'm not saying you have to move tomorrow, but start researching jobs in wealth building states. Listen, the five states that I gave you today were just the best five. Do your own research like how I have my students do. Do your research. The my students are freshman and sophomores in college. You got three three years, three to four years to figure this out. Start doing the research now while you're saving, while you're investing, while you're downsizing. Start coming up with the plan. Okay. All right, man. Texas. Texas, I think, is a great state. It didn't make the top five list, but I think Texas is a great state. Maybe not Dallas, maybe not specifically Houston, but if you can get on the outskirts and if you can work from home, if you have your own business, if you can work virtually, man, start building skills that are portable. Start preparing for the possibility that moving might be your family's best financial decision. Because if you can move, you got to do the homework. And please, and this is what I told my students at at VU, don't just look at the salary. You have to look at the cost of living within that particular state. And then second, you also got to factor in taxes at that particular state at every level. Your state income tax, your sales tax, your property tax, because all it adds up. And if I'm being honest with you, I move to the DMV area without considering that information cuz DMV is expensive. It is expensive. And if I would have stepped back before leaving Tennessee, I would have left Tennessee. I had to get up out of Tennessee. I ain't going to lie about that. Um, but I don't know if DMV would have been it. If I would have looked at the stuff I'm teaching you now five years ago, I probably would have ended up in Texas. I probably would have ended up in North Carolina, South Carolina because as I was doing some studying, I was like, man, I kind of slipped up on this one. AO, the study looked at all of these factors and so and so should we. Don't be surprised that within the next 3 to four years, Anthony O'Neal is gone. And honestly, I ain't going to lie to you, I am going to be gone. I'm finishing up my degree. Um, I should be graduating with my doctorate in May of 2027. My goal is to be married for sure by then. And me and my wife, we're moving to a wealth building state that will give us more margin to invest into our future, to invest into our kids. Move my whole team. Like, yo, listen, this is where I'm going. Like, I would suggest y'all go here, too. Because I want to be thinking generational wealth. I want to be thinking about my kids and how I want them to set them up to thrive. I want I want to build something to where we can build something that lasts.
Listen, as I end this show, and I'm doing better. We're almost at 35 minutes. I can't stress this enough. Make saving and investing a non-negotiable monthly expense. Pretty soon I'm going to lay out the escape plan, which is my version uh my my money practical steps and I call it the escape plan. I told you as I'm growing, as I'm evolving, as I'm maturing, man, and as I'm back in school, and as I'm studying a whole lot, um, the reason why I call our community in the black is because the majority of us are in the red. And I want to help us get in the black. And the only way to get in the black is we have to escape the red. We have to escape some mindsets. We got to escape some of the systems that we've been taught. We have to escape even some of the thinkings that we've been thinking. That's why I call it the escape plan because we all want to escape living paycheck to paycheck. So, we have some major things coming that is going to really help us and and I believe it's going to transform our community. I can't wait to teach it. I I I genuinely cannot wait to teach this because we have to escape not saving and investing and start saving and investing. We have to escape not having a budget because we're scared to see our actual numbers to now it's like, yo, I got a budget and I live off of a budget. That's the only way you can cut the fat. That's the absolute only way because when I budget, I know where my money is going. I know what I'm going to do. And watch this. I'm already budgeting for the next 3 to 5 years because I know I want to move. So, I'm already setting money aside to build my dream home with my wife down the road. Dear future wifey, come on, Littarius. Right. I'm strategizing about what I want. I'm studying looking at the states. But what you all have to do is you got to start eliminating your debt. All of us, because your credit card debt is killing your wealth, y'all. The interest is killing your wealth. And and one of the main reasons why some of you all can't move as quick is because you don't have the margin to set aside to save for investing and to save for the move because you're paying out so much money in debt. So listen, look for ways to increase your income. Look for ways to get out to get get out of your consumer debt. Start saving.
Let me say this before I end this episode. Some of you are sitting there and you're making excuses right now. Anthony, I can't move because of my family. Anthony, I lived here my whole life. Anthony, this is all that I know. Anthony, my job is here. And I get it. I understand the emotional attachment. But here's what I need you to understand. God wants you to be a good steward of what he's given you. If you're living somewhere that's designed to keep you broke, unfortunately, that's not good stewardship. Sometimes being faithful means making the hard decision to move your family to where they can thrive financially. Abraham left his homeland when God called him to something better. Maybe God is calling you to something, too. And the reason why you're not experiencing better is because you're more loyal to people than you are loyal to what God is trying to give you. And for those who absolutely just cannot move, I'm not judging you. Life is complicated. I get it. But you cannot use your location as an excuse to give up on building wealth. You just have to work harder and you got to work smarter. The study showed us the truth and we're going to honestly put that study inside of today's show notes. So I want y'all to see it for yourself. I know it's not just Anthony and just giving his opinion. We're going to start doing that. Like when I start doing some studying and I'm quoting studies, I'm going to make sure that I put this study inside of the show notes so that way you all can see it and read it for yourself. All right.
Now, I got a question for you. What are you going to do with this truth? Comment below if you're watching this on YouTube. If you're listening to this on the podcast, hey, get over to my YouTube channel or shoot me an email, anthonyoneal.com, and let me know what you thought about today's show. And let me know if you're living in one of those states that I mentioned today, worse states, bad states. Let me know y'all's thoughts and opinions about those particular states. Um, and we'll have a we we'll continue to have this conversation. Listen, in the black community, we getting there. This is your boy Anthony O'Neal. I love you. God bless you. I'll see you in the next show. Peace.
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