Reacting To Ramit Sethi | Tiktok is Misleading You

If you had to describe the way you feel about money in your relationship today, what word or words would you use?

The only word I have right now is stress. That really is what it is. It's stressful.

Like if something was to happen to me right now, we won't have money to survive. So that's. That's how I'm looking at that.

You have insurance?

What kind of insurance?

Term life insurance.

No, that's something that we're talking about.

We don't have insurance. 1. I didn't understand it. He went through a whole process last year of trying to get, I think. Were you trying to get whole life or term life? Term. Both. Okay.

What does in process mean?

I've already filled out the application. I'm supposed to have a medical examination upcoming. So I am in process. My application is out there.

And that's good. I'm glad to hear that. And is this term or whole life?

This is term. We're still pending on whole life.

I'll put an end to that pending right now. Don't do whole life.

Okay, I knew you were going to say that, but there's a. There's a specific reason why.

I mean, help me, because the only. Let me just tell you before you tell me and I. Trust me, I'm open ears, open eyes. I want to hear it. Whole life insurance. You know, these. These quacks out there selling it on TikTok, telling you you can leverage against it, there's cash value, you can borrow against it, blah, blah, blah. And then when anyone even remotely smart asks them a few questions, they all crumble. And they will eventually admit that really, it's only good for rich people.

Well, where should we begin? The couple of quacks that are reacting to remit, you know.

You know, Jay, when I. When I got started this process and I got my first policy, I was definitely one of the rich he's talking about. Now my name is rich, so maybe that's what he's referring to. But my first policy was $4,118 a year in annual premium. And that was a big stretch for me, don't get me wrong. At that time. Turns out that policy is doing pretty good and pretty happy with my system. You know, I got another one after that. It was like 200 bucks a month. And I got another one after that and another one after that, and I was barely making a dollar at that time to get that started. So you definitely don't have to be rich to get into the banking business. But he.

But he Said something where he said, you know these quacks that are about how there's cash value and how you can leverage it or borrow against it, whatever it was that he said. Both of those are absolutely correct. And so I'm curious to hear him finish his thoughts. Obviously, albeit I can think of all the juvenile policies, the thousands of juvenile policies that we have out there, not one of these juveniles are rich. They will be, but you don't have to be rich to do this.

I love how he said that. He's got open ears and open eyes and he. Even his mannerisms, his eyes kind of lit up like, oh yeah, I'm ready to listen, but I already have a pretty defined opinion. Go ahead, I'll end it for you right now. Like, if you're looking to get a whole life, don't worry, I'll end that for you right now. But don't worry, I'm open and I have open eyes. Like, and I don't. That doesn't sound like someone who's very open. It sounds like I'm about to tell you exactly what to do. And I, I clearly, I asked you like four questions about your financial advice. So I obviously know everything there is to know about you and all the discussions that you had. So let me fill you in on what you need to do. But don't worry, I'm open and I've got open ears and open eyes. Like, it's so disingenuous and hypocritical, the statement and the, and the mannerisms in the conversation. It seems like there's a huge gap there to me. Just forget about the life insurance component. But just the way that he's communicating, I think is he's sending a falsehood to the people he's speaking with. Absolutely.

And I'm not sure if this remit fellow is life licensed or not, but you might want to be careful about the advice.

So he mentioned the, of course, the TikTokers. So rather than talking about any other type of professional or doing things in relation to whole life or anything like that, his immediate response is to think about the people on TikTok. So first off, lots of people, anyone can go on TikTok or whatever. And I don't know 100% about the program because I don't really use it. But the premise I think is like basically it's like 60 second to maybe two minute stuff. Sound bites. Like, it's, it's primarily got to start with like 60 second, 30 second sound bites. Yeah. How on earth can you communicate anything of value, especially around lifelong lifetime financial decision making in 30 to 60 seconds or to 2 minutes. If you just rationally think about that as a normal human being.

Yep.

That is so fundamentally ludicrous to believe that you can get any kind of financial advice in 30 seconds or 60 seconds. Like it doesn't make sense. You might get an idea, you might have a reason to go explore further, but you sure as hell can't make a massive financial decision that's going to impact every member of your family in that amount of time. It's crazy.

Well, let's let him finish his thoughts and see what else he has to say.

I still can't figure out how to make it work for me or my rich friends. So please tell me what you discovered. Why is it a good idea for you?

I want to overfund it so that I can pull money out to put it into rental properties to invest. Basically essentially becoming my own bank instead of putting my money into a bank and getting. I don't even know what the interest rate is. Who cares? I'm not looking at the whole life insurance policy as an investment. I'm looking at it as a place to store my capital.

I get it.

And in the event that I do die or something happens to me, they give you what, you know, a 10x return on the actual cash value that you have. If you don't die, you can take out 90% of it.

I just want to stop there because the way that the gentleman is explaining it, I could see how remit is saying, okay, this kind of reinforces my points around how this, you know, may not be a good idea. Because the way that this gentleman is explaining the reasons why he wants to purchase participating whole life insurance, I can see how remit would have some questions to say. Hold on a second. Can you help me understand what you're describing, describing here? Because that's certainly not how we would educate somebody about the tool.

Well, and, and additionally, going back to previously when you said, you know, why you wouldn't get whole life or what have you. Whole life is a category. It's not a generic term. It's something that you can get. But there is lots of different companies and lots of different iterations of life that exist. And if we go back over the years, yeah, there is some whole life that was probably pretty crappy. In fact, there's non participating whole life, my opinion is pretty crappy. It serves a purpose. There's a reason for it. But is it going to help you with a process of Becoming a banker. The answer is no. There's dividend paying, participating, whole life. And then within that, there's multiple iterations, multiple companies, different ways you can build it. There's all kinds of dynamics. Like, it's not as simple as just saying, oh, you go get some whole life. No, right, That's. That's like saying, hey, I'm just going to go to a restaurant. I'm going to eat. Okay, well, where are you going? What kind of food are you going to have? What are you going to order on the menu? Okay, so now let's you go one step further. Okay, well, I'm going to go to an Italian restaurant. Cool. So you've gone from I'm going to go to a restaurant to Italian. Now you go look at the menu. Is the menu have just like one option or does it have like 40 different options of what you can eat? So, like you're dialing in to finally get to the meal that you want to have? It's not as simple as, like, oh, I'm just going to go eat. Like, there's more to it than that. So when people are so generic in how they say things and they lack specificity, it creates unnecessary confusion because we're not being clear. Unfortunately, this gentleman who sounds like he, you know, he was in the process of learning some things, he's got like a bundle of stuff that he's sort of hovering around the direction, but he's misstating things because he's not the experienced person. And he may or may not be learning from an experienced person. Maybe he did find out from someone on TikTok that never read Nelson's book. I think that Vermit's probably going to hand this guy his thoughts pretty quickly and say, why all that doesn't matter.

And put it into an asset or something like that. It is not for everybody that I'll put that out there, and it's even not for me right now because I don't make enough to actually execute the plan. So I, you know, like, I've read about whole life insurance. I've studied it. I heard what, you know, a lot of people say about it. I'm a person that looks at risk. I'm a person that looks at. Okay, what is the pros and cons of these things you look at?

What are you talking about? You lost 26 properties and all this credit card stuff. What do you mean you look at risk? No, you don't.

Yeah, I mean, so I don't know if you, like, I don't know if you believe, but people do grow. I learned from that situation. Like, so I don't. Again, I'm not the same person that I am or was before, where I'm just, oh, let's just jump into this property. Oh, let's partner with this person. Because now I have a family also. That experience taught me I can't just go out there and just start businesses or just do some deal because I have people that depend on me. And that is something.

My father passed away when I was 10.

My mother, at the time my mother was raising. She was pregnant at the time I was 10. My sister was 5. So my. Then when my brother was born, he had a condition. Condition with sickle cell anemia. So growing up was very, very tough. I did not have like a male role model. I pretty much had to raise myself and my brother and sister. So I acted like as if I was their father and I'm 11 or 12, having to like, take care of them when my mom went to work, so to say, my childhood was difficult. You know, it is what it is and I'm working through those things now. But when I got into grad school, I was in a position where I'm like, I don't even know what money is. Like, I don't. I've heard of this thing, like, the school is paying me to go. I have two fellowships to go to school, but I don't know what money is. And then I found Dave Ramsey. That was the first time I seen him. And I also found another guy, Robert Kiyosaki. They have two very different viewpoints on business and money. I went Robert Kiyosaki route.

No kidding.

I could tell his fingerprints are all over you.

I didn't want my family to grow up poor like how I did. I wanted to be able to provide for my family.

Reflecting on the way that the two of you describe your journey with money, it's just two totally different universes, you know, Trin raised in a very simple way. Simple. Don't use credit cards. They're bad. Pay your bills. What's left is yours. Simple. And to a large extent, it worked for your parents. But why it worked was never really made clear to you, which is probably. Do you know why? Why were they able to make a living? It wasn't because they did not use credit cards. What was it? What'd your dad do for a job?

He was in the military and then got out. And honestly, he just worked at a factory.

Yeah. And he has a pension.

Yeah. So it's my mom.

So there you go.

That's. That is probably the key driver of.

Why it all worked.

Okay, Now, I'm guessing neither of you have a pension, all right? And you certainly didn't grow up in the 70s or the 80s where housing costs were way, way lower than they are. So sometimes we take away the wrong lessons from life because nobody really makes it clear to us, like, here's what's actually going on. Instead, they just tell you this little tidbits, some Aesop fable. Don't use credit cards. Okay, While true, even though it's not really true, but even while possibly true, that's not really what's going on here at all. And then, Lucas, I hear you. You know, coming from a pretty tough background, right? You had to take on an adult role really young. And seeing your family struggle, that leaves marks. And then obviously, you have a lot of intellectual horsepower. You get into these very challenging programs. It's like, damn, that's impressive. No doubt. Also, I noticed you're very street smart. I noticed that. And that can be good. Like, my family's also very street smart. We had to be. My parents immigrated here. Four kids. We got to be street smart to figure out how to do stuff.

Okay?

But.

Being street smart can go a little too far, and you can simply become the guy who's constantly chasing another hustle.

This is just another sharp example of the impact of sensationalism, the impact of marketing that goes on on various social media platforms that sensationalizes participating whole life insurance and the utilization of it. And first of all, there's no such thing as overfunding a policy. I'll just address that right now. But I can see that how Remit has developed this perspective is because he's feeling that, and understandably so, that it's being sensationalized. But he has not demonstrated any deep understanding of the tool, or at least he hasn't communicated it up to this.

Point in the video.

But I can see how he's feeling triggered by this sensationalism. It's all over the place out there.

Yeah, that's true. There's a lot of things that I'm picking up on here, and I obviously, I have my own opinion, so I'm going to use them. But number one, this gentleman, you know, the fellow that he's communicating with here, a very well spoken young man, One thing that really came away from me is that he's not a victim. He's taking ownership. He had a type of offering. He. He spoke through how he's Progressed through all those things in a very positive way. He's, he's excited about his future. It sounds like really, really interesting, you know, man. And you know, he indicated that he has a family now and of course when his father passed away in his tent. So if his father passed away is 10, does he not have direct and clear life experience about the impact of not having an insurance policy payout? Probably he knows better than most people because he's experienced losing a family member that probably was the leading income source as he indicated. And they didn't receive. He didn't say, oh, we got a huge life insurance payout. He didn't say that anywhere. No. So it sounds to me like they didn't get that, therefore everything was a struggle. Life insurance, I don't care what type, as long as it was in force at the time, probably would have solved all those problems. Didn't happen. That's an important life experience. His brother had sickle cell anemia at a young age which tells me he's probably wasn't insurable. His brother, now that's an experience that he also has direct contact with, although he may not know that his brother was probably uninsurable. And to this day he's probably, probably, maybe still hasn't been able to get insurance. So that that tells me is if his brother had an issue when he was that young and he himself now has young kids and he could recognize the impact of a health challenge that might appear at random for a young child, wouldn't it be sensible to consider locking in some health insurance on that child so that heaven forbid that something happens in the future, we can guarantee that event. Thinking multi generationally, that's one of the things that came up for me.

Yep.

Now this gentleman is a, is a father and they're talking about his wife is stressed out about money and they're trying to get the sorted. They're obviously seeking help from remit here somehow. I don't really know how that translates yet. I have no idea. Maybe somewhere along the line they're watching TikTok, don't know. He's talking about a rental property portfolio and some of these things and right now they don't have insurance, they're an application but they don't have anything. But they've been looking at it for like a year yet they have a young family. Right. So whether they got term or whole life or universal life or I don't give a crap what kind of insurance, do they have a responsibility to protect their family? Absolutely. So the conversation about the type of insurance is less relevant than the fact you have a young family and you have a bunch of debt and you're not protecting them. Why don't we solve that right now, right. And we deal with the rest of it later. Like, you know, so I feel just so, so strange that the focus here is about whether they should be getting term or getting whole life. They need something, they should be getting something. By the way, you can just do both of those things at the same time. Like you don't need to do one or the other, you can do both and in fact you can put that all together in one structure, be a whole life policy with a term rider. It's very common. I find it just very interesting that the focus here seems to be about choosing which type of insurance is the best period. If we're stack ranking everything, clearly this is the gold star winner for the rest of time and that everyone on planet Earth, if they're going to get insurance, they should only get this one model. If that was true, why on earth would there be multiple kinds of options available? How could we have ever created other options if there's only one that should ever matter? It's so flipping illogical to think that there isn't rationale that you need both of these tools or multiple tools so that there's options for a consumer to choose what the hell they want to do.

It's overcomplicated. Why not take all that time and effort and money, buy a term life insurance policy and then invest in index funds?

Well so speaking objectively, that is an option, right? A person could do that. You could buy a term life insurance policy and then you could take the difference and you could invest it in index funds. That is something that you can do.

Certainly do that. Yeah.

When the gentleman that he was, you know, providing this consultation or hosting this consultation with was trying to describe, hey, this is sort of what my, my longer range idea is. He didn't say my long range idea is to invest in index funds. And so again it's just listening carefully. But by the same token thinking that that is all that a person should do, I think is really narrow minded.

And let me ask you this, does Remit here have a business I'm not familiar with? I'm not familiar with either. But he's got this YouTube channel, it looks like a pretty polished video. So I'm guessing he probably makes some money from that as a business owner, as a business structure, probably generated some of his money that way. I'm guessing he didn't decide, wow, my index funds are doing so good. I'm just going to go take some of the revenue that's being the cash flow from my index funds and I'm going to go start a YouTube channel and just tell people how great they are. Like, I don't think that's how the bouncing ball went. Yeah. Yet here he was talking about how this fellow's wife, her parents did well because they worked really hard and they got a pension and thank God they had a pension. Well, the, the husband is talking about how he doesn't want to live in that model. He wants something more and something greater. He wants to create a life that's beyond that. That's what he's in.

And it's just, it's not listening.

Right. And, and if, if, if the perfect scenario is that what you should do is you should just go and get a good job and get a pension and work hard and put all your money into something that you can never touch and do anything while meanwhile you're spending all your money on other crap for the rest of your life and on your kids and everything. So the money's going out the door and you're just going to let the government or the pension or the company take care of you. First off, Jason, have you ever heard about a pension with a company that went belly up because the company went belly up from poor management? Have you ever heard of that before? That kind of stuff happens.

Yeah.

So I don't understand what advice he's giving here. Is he saying what you should really do is you should think about how your in laws end up having an okay retirement because they worked hard for 45 years and someone else took care of them. Like, is that what he's suggesting? Like, I don't understand. He's how is that the right path? That's not what the guy's telling you he wants to do.

All that he's doing is just regurgitating all the financial noise out there and he's just part of the mainstream. He's communicating this just mainstream. Just look, earn an income, spend less than what you make. Take some money, get some term insurance, take the difference, go and buy index funds, have north of 30 to 40% of your wealth eroded just in management fees alone over the duration of that experience. Then when you need the insurance the most, you're going to cancel it because it's cost prohibitive. So clearly he doesn't understand worry you'll.

Be self insured in a tax fully taxable account.

He just doesn't understand or at least is not communicating his understanding that there are different ways to achieve an objective. And that if he really, truly understood the attributes of dividend paying whole life insurance, that he wouldn't be so triggered by it. I can see again that the sensationalism is really what's gotten to him. And that's understandable because, you know, it's, it's just out there. It's, it's so proliferating there.

What we're watching right now is like, is, is this guy's on his channel. His like reaction to a piece of this interview with these couple. The cut happened and it transferred to just him, like obviously after the fact, he was just pumping up the husband's tires about how he overcame adversity and he's doing all these things. And you, you have a lot of these great skill sets that you've just identified. And he was kind of like a, like a little bit of a pat on the back. Attaboy. And then it cuts to now him react is like, well, you see, the problem is with this fella, he's got get rich quick all over him. So like you just told him he did all these great things. Now it's a totally separate time period. You're recording a brand new video and you're talking about how he's got like, again, there's this disingenuous hypocrisy built into seconds in the frame of this video. I don't understand. Yep.

And why are we talking about leverage anyway? Lucas and Trinh are losing money every single month. You know, when I was a kid, I remember that movie Teenage Mutant Ninja Turtles. And you remember the Foot Clan? It was this group of disaffected teenagers who got recruited into a gang where they basically committed violence as part of this brotherhood. Back then, parents worried about their kids getting into a gang and doing drugs. You know what I worry about today? Someone clicking on Robert Kiyosaki video, which then leads them to Robin Hood or worse, listening to Joe Rogan, which the algorithm then uses to serve Jordan Peterson videos, then Ben Shapiro, and two weeks later you're a white nationalist anti vaxxer.

So clearly he's got some opinions about people and that's, that's his prerogative. But you can also tell he's reading from a teleprompter. He's being teleprompted. And perhaps that's a way that helps him stay on course and all that.

But I think everybody's opinions completely shift in a two week period. That's exactly how we describe. That's 100% how it happens. You go from being something to something else two weeks later after watching one video or reading one book and clicking on it. And you definitely put all your money in Robinhood after one click because that's what a prudent normal person would do so well.

And I'm just curious about how he was convinced that buying term and investing the difference was the right way to go.

I wonder if what he clicked on that led him down that primrose path. I'm also curious like, does he have somewhere behind him in his office there one of those jumped conclusions mats? Because if he does it, we should package one and send it to him.

It is incredibly difficult for simple basic truths to complete with the radicalized nonsense that you hear online. How is someone like me saying, hey, actually, 7% returns on a low cost index fund are pretty good and you can build serious wealth given enough time.

You can build other people's serious wealth in a long range period of time. So it's important that if you're going to show someone one side of the coin, pretty important to flip it over and show them the other side too. And I think that's where, you know, again, remit. He's just mainstream. He's obviously catering to a very specific audience where he can, you know, show up and put his cape on and review their financial circumstances and then throw around a bunch of advice with, again, not showing both sides of the coin because I think there's an absence of understanding. All I can say is remit. It may serve you well to really develop a deeper understanding of what you're talking about.

Well, and everyone's entitled their own opinion and that's great. Of course, I got mine. I do think that if you're watching stuff on the Interwebs and all their different, all the different platforms that are out there, the algorithm is going to serve you up a bunch of stuff. It's going to happen. Yeah. So you can take on the ownership of looking at other things and exposing yourself to different ideas. You don't have to be zoned in on one. But it's also helpful to learn and recognize a path that someone else has gone down. And there's a divergent path there. They've chosen one way and you can choose another way. It doesn't mean you shouldn't learn about what the other way is. So you can understand why you chose your own path. Earlier today we were in a podcast interview with a gentleman, amazing guy, real estate investor, 25 years experience. He told us some real world, real life stories, how he got kicked right square in the nuts over that 25 year investing career. And there was some really, really hard times, but he came through it over the long term and it made him better and it made him stronger. So does it mean that 25 years ago he made some bad decisions? If he would have stopped at year, let's say Penn, when he was back, was up against the wall, everyone might have looked around and said, yeah, we told you, we all told you when you started buying real estate, that was a dumb idea. Because there's people that are out there doing that every day saying that's a dumb idea. Meanwhile, there's people going and being successful at investing real estate. So if it's such a dumb idea, why are there a bunch of people holding their wealth there? Like it can't be a dumb idea. It might be poor execution of an idea. Yes, it might be. You are misinformed about the idea and you had a higher expectation about what it would do. So all of that can absolutely be true, but you can't just be a dumb idea. So that was true. It wouldn't work for anybody. Just like saying, hey, buying term and invested a difference is a dumb idea. Well, I might believe and think that that's a dumb idea, which to a degree I do. But I don't think that if the choice was put all your money into something and have no insurance, just invest all the time and put your money at risk and not have insurance. Well, if I'm choosing between that idea or this one, the one that ensures your family and protects you to some degree, is obviously a better plan, in my opinion. Yeah, so everything is relative. And I don't feel like there's any relativity going together in the little video that we just watched here. And I think that the human being is smarter to see through this kind of crap. And if they're not, they better start beating me. And I think the people that watch our channel, they are.

Yeah.

You know, it just reminds me that there's always something new to learn. You know, there's no such thing as having arrived in knowledge. And so if Remit feels that that is the only way, then it's all downhill from here. Because if you feel like you've arrived in knowledge and you've, you have lost that ability to receive something new and to process it, buying term and investing, the difference isn't good, bad or indifferent, it just is. It's important to understand.

What the outcomes are when you do that both good, bad and otherwise. And no different than deciding whether or not you want to purchase dividend paying whole life insurance and implement a process of becoming your own banker. The infinite banking concept. It's important to understand the attributes of the tool that you're using to implement the process. So there's a difference between what you're buying versus what you're implementing. Something that remit maybe well advantaged to learn. If he has an audience that he's influencing, then influence them by demonstrating there's always something new to learn and not just towing this mainstream line. You think for a second remit that Wall street is your friend or any of your clients friend? Dude give your head a shake.

They haven't proven over the last 60 some odd years to be a trustworthy yeah, give me a break.

A 7% return. What planet are you living on right now? Like we're not talking about what happens after taxation. We're not talking about what happens on the stomach churning roller coaster ride of volatility. We're not talking about wealth being eroded through fees. We're not talking about people getting paid whether the client wins or loses. No, we're not having any of that discussion. We're basically telling someone that they're stupid and that they should just buy term and invest the difference. Because the only way to lose money is to hand control over of it to someone else who this guy believes can do better. Obviously there's an opportunity for him to learn something new, but he's got to be receptive to it. I commend him for wanting to be helpful to people. I really do. I think, you know, being wanting to serve other people and to understand how.

You can help them.

Point out some gaps in what they're doing financially. I absolutely commend him for that. But for heaven's sakes, embrace the fact that there's always something new to learn and then go and learn it. I think it just makes him look stupid to dismiss something so quickly. It may get clicks, but it really makes him look foolish. So if you thought this reaction video was good, be sure to click on.

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