Money Expert Reacts to Caleb Hammer's WILDEST Financial Audits

Today we are diving into the deep end of personal finance by looking at one of its most infamous characters, Caleb Hammer. You know the guy, he roasts people spending like it's a sport.

Don't be stupid. They're like, oh, maybe I'm a defensive stupid. That's stupid. That's the stupidest thing I've ever heard. I'm sorry, I'm digging into you, but that's dumb. Is there anything you haven't done that's not stupid?

The question is, does his advice actually work or is it just clickbait?

Let's find out who the has a Ram 2500. Okay.

I agree with you against massive unnecessary trucks that have gargantuan phantom costs. I'm with you, Caleb.

It's a diesel truck. Great. It costs a thousand 275amonth.

That's correct.

You bring in $3,333. This is a.

What the. Who pays over 30% of their gross income for a freaking truck?

This is a third of your income. Third of your income goes to this truck.

I do a lot of driving. I do a lot of driving. Oh, so did I. I did a lot of driving in my four door Honda Accord SE LX V6, my friends. I do a lot of driving. What the.

Every other country has figured out that you don't need a super sized wagon like the truck bed. In all these eras throughout even the start of trucks in this country, not only have they stayed the same, they've actually shrunk and the cabins have gotten better. I've seen it. You're paying way too much more than you need. You're trying to justify saying you need this to do it. No, buddy. What are you making this position?

48,000. What the. He makes 48k a year and he owes 66 on a truck.

What kind of decision is this?

Forget everything I said, Caleb.

You're right.

I'm with you. 12. 12.7. I'm going to. I'm going to have a stroke right here on camera. You know what, don't call the paramedics. I want to die in front of this camera right here. Hearing about a 12.75% interest rate on a diesel truck. Just end my life. What can I say? That's absurd. Let's move on to the next.

You know you can't afford to buy any designer clothes. You know you cannot afford to go to anything but great clips.

Why is he making fun of great clips? I used to go there.

You know, you cannot afford to go out to eat at all. Right. To be very clear, not a single time.

I don't find it's very effective to tell people all the things they can't do with money. There's this thing in psychology called reactance. You tell people what they can't do, they're going to be like. And then they're going to go do the very same thing. So I don't find it's effective to just be like, you can't do this, this, this, this. Everyone just shuts down. They don't want to hear it. That's what a lot of people come on my show expecting me to do. Oh, so bad. You're such a bad person. A lot of people grew up religious especially. They really want me to chastise them. No, I'm not playing that game. I'm gonna play an entirely different game. I go, you like coffee? Great. You wanna spend more, great. I get em excited, I get em interested. But then I have them figure out what they cannot do. Instead of me sitting here on some pedestal telling everyone, oh, you can't do this, can't do that, watch. I bet you she's not gonna react well.

I'm speechless.

I'm speechless. The light just left her eyes exactly as I predicted. 0.3 seconds later.

Do you know you cannot afford that though?

I get my lot.

I feel like it saves me so.

Much time though so I can work on my business.

Oh God. Okay. Wow, Caleb. Do we have the same people coming on our shows? People who buy the most outlandish discretionary purchases and then they use the famous I word. It's an investment. Hey everybody. I stay at Amman resorts. They cost 3,000 plus dollars per night. Why? Their air conditioning is triple filtered and therefore the hair on my arm doesn't stand up and therefore I'm more calm and I can write a better book which actually produces more income for me and therefore it's an investment. Get real. Let me tell you the number of things that are not an investment. A personal trainer is not an investment. That's a luxury. A $2,000 mattress, that's not an investment. In your freaking back, that's a L. Your car is definitely not an investment. Okay. Skin cream, not an investment. Okay. Don't tell me about the $500 skin cream you use. Oh, gives me confidence. Okay, whatever. Not an investment. Basically nothing you think is an investment except index funds and maybe rental property. If you actually ran the numbers.

How many hours a day are you working?

It depends. And now I'm doing more things. Now.

It is where hours a day are you working?

Five. Five hours a day? What? I worked out when I was three years old.

Then you don't have time. That's stupid. That's the stupidest thing I've ever heard. I'm sorry. Okay.

I mean, I wouldn't say that, but I can understand why. Here's the thing. We all may share these reactions, but I do think that if somebody comes on your show, they come out of their way, they travel, there's cameras and lights. It's a whole thing. I think people deserve to be treated with respect, even if they are making bad decisions. And that is why you will hear me often just ask people, why'd you do that? But tell me why? And go deeper and deeper. And I'm actually not getting insulting with them. Even though sometimes I want to lose it in my own head because it doesn't work. It might get you clicks, but I'm not here to get clicks. I'm here to help people. We need to take a second to acknowledge how brave guests are to come on this show, to come on to be courageous enough to talk about what I think is the most taboo topic in America. To share real numbers. That's not easy.

I'm digging into you. But that's dumb. That's dumb.

Calling people dumb, stupid. Why? Is it effective?

No, you need to know that's dumb. That's why I'm being robbed.

Dumb. You need to know that's dumb. Sometimes I think people really get off on making other people feel stupid. That's. I know. I understand that deeply because once in a while I engage with magas. I love it. Showing them. You lack basic logic that a third grader has. I understand the sentiment, but if somebody comes on a show asking for help.

It'S a little different.

Why grind them in the dirt five hours a day?

Oh, poor me. I'm working five hours a day and I can't cook. What do you mean? It saves you time.

You know what? It's interesting. I think every one of us has something in life that we struggle with. It might be our body, it might be personal relationships, it might be our finances, whatever. If you were to take that same approach with something that, for example, Caleb struggles with. Boo hoo. I can't do it. You would watch his reaction become the same as many of his guests. That is because when you break people down, it rarely builds them up. It actually just breaks him down and leaves him in a puddle. Another way to do it is to slow it down. Take lots of time. Ask Them why be gentle, Encourage them sometimes hold them accountable, but build them up. Because the best thing that can happen is somebody leaves my show and they have this glimmer of confidence, oh, my God, I think I can do that. I think I can have five days of working on my money straight. And if you give people that confidence, it is amazing how far they can go. Let's look at the next video my team pulled.

Capitalism is bad.

I don't like it.

Yeah, really easy for someone to say that. Grew up in a really nice house in one of the best school districts in Texas. Who has the rent paid for that is able to go to Europe.

What's with the interrupting? Why we got to interrupt our guests?

And on a whim with their sister, who's able to do girl math, who's able to be fun employed. Yeah, it's easy to say that the system's bad we when you're doing that because you've never had to work for it. You never got to actually see what happens when you put in the work and get benefits and actually have a little bit of responsibility.

I don't think anyone's listening to this. It's just blah, blah, blah, blah, screaming, yelling, blah. It's playing a character. There's a lot of characters on YouTube. They come into their own. They realize if I do this thing, I get more clicks. And what we see is that people become radicalized by the algorithm. Have you all heard of the person who started eating and then they ate and ate more? The more they ate, the more their video views grew? It's not a joke, it's horrifying. It's a black mirror type of thing where you see someone say something, the algorithm rewards them and they just double, triple, quadruple down. I see this a lot in the self development world. People share vulnerability. I'm all for it, you know, something I'm struggling with. But they share one piece of vulnerability, and then they get like a thousand people going, oh, my God, you got this. And they go, wait a second. Vulnerability equals views. And then the next week they're sharing vulnerability. My house is so messy. It's such a struggle. Wait a second, I got more views. And suddenly you see their entire channel has been transformed into vulnerability porn. Talking about all the problems going on in their life. I want to encourage anyone who's on social media. You have to fight against algorithmic radicalization. You have to fight against seeing what people reward you for and then only doing that thing. Otherwise you will end up a caricature.

Of who you really are, do anything. You've grew up in privilege, beyond privilege, beyond privilege, beyond privilege. It's only the people who speak like you that grew up in a world where you've never had to do in a single thing in your life. So I don't want to hear about that. What a joke.

I'm sorry.

I just wish everybody had, like, I.

Wish a lot of things.

I kind of want to hear what she has to say. I want to hear what somebody who grew up wealthy and then doesn't like capitalism has to say. I want to explore her belief. I want to pull on that piece of yarn and understand what is your world belief. Let's get to the nucleus and let's find out if it's intellectually coherent. A lot of times, if you have the privilege of speaking to someone with a alternative viewpoint and you pull on that, you get to see some really interesting stuff. For example, if somebody has been subsidized their entire life, for example, by parents or a spouse or somebody, they often develop views on money that have never been subjected to reality. This is common in relationships with money too. One of the four money types in my book is called a dreamer. A dreamer always believes that success is just one deal away, one gig away. These are the people who often get involved in multi level marketing. Well, guess what? It's often their spouses who are managing the money so they don't have to deal with any of reality. But if their spouse left within two months, reality would intrude and they would get a job. So this is actually a really interesting conversation. I would love to hear more from her, but it's hard to hear that if you're just yelling at them. I speak to couples every week on my podcast and I know that it can be frustrating to see people that seem to make the same mistake over and over. My personal philosophy is, instead of berating them and shrieking at them, I'm much more interested in understanding why. Why are they making these financial decisions? What's the money psychology behind it? And once we understand the psychology, we can actually take effective steps to change it.

Seriously, one of the craziest spending I've ever seen in my life. No, I am not kidding. The student loans, what are they? Are they federal?

Federal for sure.

You started making those payments? No, why? I started this month.

I deferred. Money is one of those topics that is so sensitive that if you come to ask for help, you already feel really small. It's this technical topic. I don't understand how loans work. What's an interest rate? And if that person validates you and listens to you and expresses the feeling, you know what? There are a lot of people in situations like this. We can work through it together. Oh, my God, that feels so good. But if you get told you're wrong, you're stupid, you're dumb, that's a quick way for people to never want to engage with money again. Let's move on.

What are you making right now?

About 3,000 to $4,000 a month in Uber. But I'm actually losing money on Uber. And you are the one who is.

Like, everyone's doing Uber.

Roll the clip. If you're an honest man, roll the clip.

I know Uber Eats drivers who I've personally met and talked to who are raking in like $80,000 a year.

Can we just talk about Uber for a second? Uber, classic example of not accounting for phantom costs. So when Uber drivers were getting paid a certain amount of money, they almost never take into account things like depreciation on their car, maintenance, all other costs that are involved. Of course, Uber and other rideshare services engineer their app to look like you are making tons of money. It's they engineered to look like a casino. But just like any other major purchase such as a house, a car, etc. People fail to factor in phantom costs. You might make $100, but when you factor in all other costs, you actually could in some cases be losing money.

And that is not the amount of depreciation in gas. They are taking in their cars and repairs and insurance and impairs. You have to pay more in insurance. When you do that too, it becomes a whole thing. $80,000 is also a thing.

Everyone does it. You're so confident that people are making tons of money on Uber Eats. I've already drived on Lyft and I know it's not working. It is a good app that tricks people into thinking that they're turning a problem. What I just say, hey, this guy's good. I like this guy. Mr. Bandana, we're talking phantom costs here. Insurance, increased maintenance, there's so many gas, there's so many costs you have to factor in. Of course, considering most people don't even believe there are phantom costs with a freaking $800,000 house, how are you going to convince the average Uber or Lyft driver that there are substantial phantom costs you need to factor in when driving? No, they're like, what are you talking about? The app said, I made 300 bucks. I made 300 bucks. But when you look at it on an accounting basis, it's not a profit.

About a year and a half ago, when we filmed getting out of the pandemic, Uber Eats was actually making really good money. And today you're right. It's not as good as it was during those pandemic days.

It's not. That was a good conversation. I like the back and forth. You know what? I think every host of a show loves a knowledgeable guest who comes on and gives them something new that they never thought of. I welcome it. Somebody wants to share something with me. I never thought of it like that. I never considered this. One cost, please. I think that's an amazing conversation. Well done, both sides. All right, let's see what's next.

How have you had enough time to be as stupid as this pile of debt suggests?

That's quite a hook. Okay.

63% interest alone.

How can that be? Isn't that illegal? 63%. Okay.

I didn't know that that was the interest rate until I sent you all the documents.

That's actually very common. There's so many people who send over documents to us and they actually don't even know their income. 50% of our guests do not know their household income. Most people, when they send over documents, never realize how much debt they have. They don't know their interest rates. This is really common. So I have a lot of compassion for people because it's not just one or two or five people. It's almost everybody who doesn't know the basic fundamentals of their personal finances. I'll leave.

You had it two years.

And is this a Jeep Cherokee? I'm just going to go out on a limb and guess really paid anything off.

What could this possibly before? This is insane.

You're going to love it. I went out and bought a brand new 2022 Kia. A Kia what? That's a good car. What are you talking about? How do you get a 63%? I'm turning into Caleb Hammer on this video. Oh, my God.

No, you. Why? At 18?

Yeah.

From where you walk into, like, a sketchy place with a bunch of mobsters and be like, yo, I need to pay for my registry registration. What? Sun Loan, dude, you're bringing in 6,500 bucks in the middle of nowhere. You can pay this off today.

I have a lot of things to pay for.

Yeah, and most of that is going out to eat.

Food is important.

You don't need to be going out to eat every second of your life.

I'm still shocked that this was ikea. Look what is happening right now, like, quite a reasonable purchase, but then it's 63% from some shady loan company. What a lot of you take for granted how much you actually know about money. Like, you go, oh, a loan has an interest rate. I think you need to understand that if you talk to the average person, they don't know what an interest rate is. Oh, I'm investing early because of compound interest. What's investing and what's compound interest? And actually, if we're being more realistic, they're not asking those questions. They don't care. So we need to understand where people are so that we can meet them there. You have to remember, people who come on this show actually care about money. People who come on my show actually care about money. But there are a lot of people, I'm talking tens of millions of people who do not know the basic fundamentals of money, nor do they want to learn. If you actually saw the literacy rate in America, you would be shocked. And you have to have a little bit of compassion here because imagine you're trying to navigate this highly complex world with a 4th or 6th grade reading level. How are you supposed to fill out your insurance documents? What is a deductible? And forget about compound interest and asset allocation. We have to have some compassion for folks. Now, let's also be real. If you bought a $80,000 vehicle and then you're over here complaining about inflation at the grocery store for the price of pickles, get a life. We need to be realistic. You made decisions, you will pay the consequences for those decisions. So we can acknowledge both. We can acknowledge the need for personal responsibility for your pickles, and we can acknowledge the need for systemic reform for things like housing and insurance. All right, let's see what's next.

And you're pretty much financially right now. But guys, this is all consumer. Well, except for the little medical debt. So taking away the medical debt, this is all consumer bull crap debt. And we're at $120,000, $120,000 of consumer death. Bull. High interest rate, for the most part. Death. This is the worst I have ever seen, ever seen in terms of consumer debt.

One thing I noticed is not a lot of questions from Caleb. A lot of decrees, a lot of telling people why they're dumb and wrong, and very, very few questions. What does this tell you? I think it suggests two different philosophies on life. I want to understand what's going on. I think if you chip away at the layers, you might Be able to find a truth that sometimes the guests themselves don't even know. And once you get there, then you can make an effective change. Or another approach is simply to berate people and tell them they're wrong and shout a lot and get a lot of views. Two different perspectives you choose would be.

Honestly relatively ashamed of that number.

To be very clear in this clip, they hardly ever talk. Are they even here? Are they just avatars or a freaking hologram? Is there a guest here that maybe we should ask some questions of? I guess it is called the Caleb Hammer Show. Okay, what's next?

Okay, so you own a home.

I do own a home.

Okay, what was the purchase price of this home?

270.

When did you get it?

Right. We bought it in 2019. So we moved in March 2020.

We bought it.

Yeah, we.

So you're on a triple mortgage.

Technically, it's two. Like, both of us legally on paper should have the house.

50. 50.

Don't do this, people. Don't buy a house if you're unmarried with your partner. And definitely don't buy a house with your high school buddy. Okay. The one who got arrested for weed in 1984. Don't do it. There are reasons to have legal protections for having a house. And I know those of you watching who are about to write me an angry comment, I disagree with you. I know you didn't go to a lawyer and come up with a contract beforehand. Y' all went to Chili's, and on the back of a napkin, you wrote Dan and John. How? And you drew a picture of a house, literally, with the triangle and, you know, the window panes, and you put Dan and John. And then you both signed it. Like, what the f? It has little blooming onion chili oil stuck on your contract, which is really a napkin. What are you guys doing? Don't do this.

What's your plan here?

We are going to refinance. And during the refinancing process.

Now, where rates are not.

Now we're going to talk about it. Because we looked at it three months ago, and they were like, the interest rate right now is, like, awful. And they're like, call us in three to six months. Like, cool.

It could be a long time. You're okay with stomaching this risk for a year, two years, three years, four years? Who knows? We don't even know if it ever will be those low interest rates again.

That's true. But then again, I could always just move out of Austin and go somewhere else.

Yeah, but you'll still be on the mortgage.

Oh, wow. So it's not just my millions of community members who don't understand one thing about housing. It's everyone. That's reassuring. Not for you, but at least for me. Let's look at the next video my team pulled.

It doesn't matter what you feel. Why the do your feelings matter in that situation? Sorry, Getting heated. You know I get heated. Okay. Yeah, it's okay.

Okay. I will admit that once in a while. I've lost my temper on my own show too. I. I don't feel good later. Especially when I look at it in the edit. I'm like, oh, God. But seems to happen regularly, especially with you.

I, Because I'm very. Go with my intuition.

Like, that's what feels right.

That's. But your intuition in this situation.

But going with your intuition. Can I just talk about your intuition? First of all, most of you have horrible intuition. Do you understand that? Intuition is something that needs to be trained. Please don't talk to me about, oh, woman's intuition. No. And there's no man's intuition either. You need to train your intuition. How do you think you learn if someone's dangerous? You don't just wake up and figure that out. You learn, learn. You train yourself. You iterate. You think, if I went hiking in the Grand Canyon, first of all, I'm not going hiking. Okay? I don't have any hiking gear, but let's just pretend I take my beautiful cashmere sweater from Italy and I go hiking in the Grand Canyon. I have a coffee mug. I would take this mug and I'd be like, let's go. As I'm walking down the Grand Canyon, there would be some other hikers, like, oh, like, oh, which hike are you gonna choose? How long is it gonna take you? And I'm like, I don't know, like, three days. And they'll be looking at me. I'm wearing this. I have this with some water in it. And then I just keep walking on. I'm like, see ya. Do you understand how my intuition would not save my life? My carcass would be found three days later, not even at the bottom of the Grand Canyon. I never even made it there. Okay, please stop using your intuition as an example with money. Money is a technical skill. There are things to learn about the language of money. You need to learn how compound interest works, how opportunity cost works, how investing works. And what is the difference between investing and saving? It's not hard, but it is a technical skill that you have to learn. You don't intuit your way to riding a bike. You don't intuit your way to swimming. Why would you intuit anything around money? Pick up a book. There's two of them right here on screen. Pick up either of them from the public library, please. Learn this stuff.

It matters because the reality is, like, there. It's literally Googleable. What?

Like, yeah, I guess as we can see from these guests, they're like, google it. Huh? Like, how many people do you know who can't parallel park? They never thought, let me go on YouTube and type how do I parallel park? Never occurred to him. Nope. Just something I'm bad at and I'll be bad at forever. I definitely do want, like, a perspective change.

I do want to, like, therapy. Therapy.

I like that Caleb encourages therapy. I don't like that he was kind of suggesting it in a mocking, sing songy way. But I do think it's good to destigmatize mental health help. I think we all need help, whether it be with a personal trainer, whether it be with a therapist or a trusted friend. There's so many different ways we can get help in our lives. Let's move on to the next.

Oh, my. Shut the up. You are pissing me off. You could get seven and a half dozen eggs. Seven and a half dozen eggs. I'm doing, like, trump hands right now. That's how pissed you're making me. Fantastic eggs. The most fabulous eggs. You could have had so many eggs. And you could have the meals. The scrambled eggs you could have had in just your example. Because eggs is what you care to bring up when I push back on doordash Because I wanted eggs, right? Huh?

Cause yeah, all I want is eggs.

It was your f. Cking example.

Your statement was, for the amount of money that I spent that day on doordash, I could have bought four meals.

Yeah, seven and a half dozen eggs could stretch further than four meals.

That's not good for your. It is funny when you try to give an example and someone cannot adapt the example and generalize it so they're just, like, stuck in the weeds on the example. And I'm like, what am I doing with my life here? Like, how did I end up in this place? Sometimes I'm like, how? How did the earth conspire to put me in this very place at this very time? I understand the frustration. Are you on blood pressure medicine?

I probably should be after this conversation. Okay. Okay. Rotisserie chicken. Boom. There's a meal. $5.

Never seen a rotisserie chicken for $5 in 18. That's actually pretty funny. If you want to with someone, you should do this. That's really funny. You know what? I respect that guess. Good job. That was a new response. I never saw it like that. Let's move on to the next thousand.

Bucks, an emergency fund, which, believe it or not, Dave Ramsey is not even close to enough money. And many people have come on the show and they did the $1,000 emergency fund, and then they ended up in a worse situation than they were before because it's not enough money to cover anything in this world. It's not one month emergency fund or cover your highest deductible.

I don't mind if you want to pick on Dave Ramsey for several things, such as bringing a gun to a meeting, not believing in Covid, forcing people to go through an interview process where their spouse is interviewed, and any number of other things that are covered in various lawsuits. But I digress. Let's talk about finances. Dave Ramsey suggests that you can get a 12% return from good mutual funds. Interesting that he does not mention which of those mutual funds they actually are. By the way, you cannot get a consistent 12% return from any mutual funds, good or bad. He also suggests that you can withdraw 8% in retirement. And a lot of people actually agree with that. Clueless people. These are the people who treat complex investing math like Crayola crayons. They go, ramit, if you get 12% every year, then you can withdraw 8%. 12 minus 8 is 4. What's the problem? I go, do you understand how complicated this actually is? Of course you don't. You eat crayons for dessert. Here's the truth. First of all, you're not consistently getting 12%, you freaks. Second of all, do you understand that some years your investments will go down? Some years you will get negative 4%? So what if you withdraw 8% when you have negative 4%, how do you think that affects you 3 years, 4 years, 20 years from now? Have you ever heard of something called the sequence of return risk? No, you haven't, because you just say 12 minus 8 is 4 and 4 is positive. And that's good for me. What are we talking about in a freaking emergency fund?

Stop putting little bits of extra towards the debt. That's not a method that works for anyone because you're just going to see, like, the feeling of no progress.

All right, listen, I actually don't mind that there are two different approaches for paying off debt. One of them, the avalanche, won the snowball. I don't mind that some people choose one, some people choose the other. I just want you to choose one. Okay? Mathematically, I would choose the one towards paying off the high interest rate debt first. But not everyone is mathematically inclined. Some people want to feel good and get a good result faster. Fine. Make a plan. Execute the plan. It might cost you a little bit of money here and there, but at least you've got a plan. All right, let's see what's next. I hardly spend on myself. Let me stop you right there. Anyone who says I hardly spend on myself is already lying. I know that there's only two exceptions. One, moms who instead of spending money on themselves, will then take all that money and spend it on unnecessary discretionary items for their kids. And number two, old Asian dads, Asian Indian. And you ask them like, what do you spend? They go, spend. What do you mean? I had this shirt from Costco since 1996. What are you talking about? Spend money.

Chipotle.

I need to eat Chipotle. It's affordable.

No, that's stupid as $25. That doesn't make any sense. Make a sandwich. Are you kidding me? Get some beans, get some beans, get some beans, get beans.

I like that. She's like, beans. Like, if I were a guest on this show just to with Caleb, I'd be like, oh, wow, I didn't realize that it would be cheaper. Can you actually break that down? What's the recipe? Recipe I should make? And I would actually see if he knows how to cook, which I'm willing to bet he does not. And then I would pull out a freaking pan. I would be like, oh, okay, can you show me right now? Suddenly the show would turn into me filming Caleb and seeing how he cooks. And then I would critique it. I'd be like, caleb, that's horrible. Who taught you how to cook? Caleb be so thrown off his game. It would make the most viral clip of all time.

Cook the steak. Meal prep, meal prep. Beans. Could have said something else besides beans. I was just thinking of a chipotle bowl. Damn.

How did she suddenly take the power dynamic in this clip? This is amazing. And I think it's important for you to ask. Whenever you're watching some self development show, ask yourself, what is the philosophy of the host? Is it something that I agree with? All right. I hope this video taught you to think more critically about the money advice that you hear on the Internet. Don't forget to hit that subscribe button and turn on notifications so you never miss any of my new videos. Now check out this video popping up on screen to see more.