112 - Why You’ll Overpay for Stocks but Not a House (And What That Says About You)

Most people say they'd never overpay for a house—but then turn around and invest in overvalued stocks like it's no big deal. Why?

In this episode, we unpack the psychology behind financial inconsistency—and what it says about your ability to build wealth. We cover emotional triggers, risk perception, identity signaling, and why people make strategic decisions in one area of life… but default to compulsion in another.

You’ll learn:

• Why people treat overpaying in stocks as “risk-taking” and in homes as “reckless”
• How your financial decisions reveal deeper patterns around autonomy, security, and identity
• The hidden cost of inconsistency in your investing and life planning
• What it takes to move from self-reliance to true financial freedom

This isn’t just about stocks vs real estate—it’s about getting your inner game right so your money actually works.

🎯 Don’t make big decisions from unconscious patterns. Let’s break them.

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**DISCLAIMER**
Ticker metrics change as markets and companies change, so always do your own research. The content in this podcast is based on personal experience and is for educational purposes, not financial advice. See full disclaimer here.

Episode music was created using Loudly.

Transcript

Welcome to roaming returns a podcast about generating a passive income with dividend stocks so you can secure your finances and liberate your life. 

We came across something that made us stop and go… WTF? People are terrified to overpay for a house, but throwing money into an overvalued stock market like it’s totally fine. 

In this episode, we unpack that paradox—not just economically, but psychologically. Because this isn’t just about finance. It’s about unconscious patterns running your decisions. And if you don’t get control of those, you’ll never hit real financial independence. Let’s get into it.

Yeah. All right. So nothing crazy happened in the markets more than it normally already is.
So we didn't have to hijack the episode again. Yeah, it was pretty, a pretty, pretty uneventful week, which was nice. I mean, it was a shortened week with the holiday, but it is what it is.
So like what we had originally planned to discuss a couple of weeks ago, we're going to bring up today, which is houses versus stocks, why people invest in one, but not the other. And let's start with some statistics, shall we? Statistics are always fun for you. If I look away from the thing, it's because I like, I have to do this outside.
My family showed up. I don't have a room to record in. So I actually have to, I'm sitting in a chair out in the middle of nowhere.
That's why he's a little glitchy. It might be. Yes.
Just apologize in advance. 76% of Americans believe it is a bad time to buy a house currently in the current housing market. And that is largely due to factors such as housing prices rising over 40% since the pandemic.
Although I was reading today and I like, this is a complete sidebar, but it made me laugh and no one else understood what I was laughing about. It was a health crisis of 2020. That's what they're referring to it because they can't say COVID because COVID like get you dinged.
So they said a health crisis of 2020. Hilarious. So anyway, that's the factor of the housing prices have risen 40% since the pandemic and interest rates have increased from about 2.25% up to about 6% since the health crisis.
Yeah. But that's still this lower than you'd be able to get a mortgage at. Well, if you think historically, that's a really like low historically more interest rate, but like people don't think historically that people think like the last 12 years when interest rates were historically like non-existent.
So that's a huge, like, that's a huge disconnect between people and like historical data. But I'm not saying that I'm saying like, when you actually go to apply for a mortgage, even though it's at 6% for the current interest rates, you're going to only be able to qualify for seven, eight, cause they have to have their margins spread to make money off of you. Of course.
I'll make a money is the whole name of everything. And then the Fannie Mae actually has a home purchase sentiment index. And according to that index, 74% of the consumers they surveyed say it's a bad time to buy a house right now.
Then you get in, you get into a other, just a basic broad numbers. 87% of Americans worry about the cost of housing. Hold on.
I got it. They sure as heck aren't acting like it. 87% of Americans worry about the cost of cost of housing.
63% of Americans report they cannot afford to purchase a home and 83% of 83% of us adults who want to own a home, but don't cite affordability related reasons as the reason that's holding them back from purchasing. Then we got another one, another one here, according to the Cleaver real estate survey, which is another survey that comes out monthly at 50, over 58% of recent home buyers report that they overpaid for their home. Even worse, according to the Salem news survey, over 93% of recent home buyers regret their decision.
So like where you're seeing like the, like the people know for whatever reason, people know that it's a bad time to buy a house. It's basically what all this data is pointing to. Like people know that the market is overvalued and undersaturated with new homes or existing homes to buy.
And you can see that in the numbers. Newsweek said, according to Newsweek in May of 2025, home sales decreased 6% compared to 2024. Whereas May 2025 showed over 2 million homes for sale nationally, but then less than 500,000 homes being purchased.
So only like 25% of the available inventory is being purchased. That was actually the worst ratio since the pandemic that happened in May of 2025. And then if you dig into the data some more, February, March, April, May, all show significantly lower homes bought versus the same months in 2024.
Buyers aren't buying, and that's because of the affordability issues that we mentioned above. So then you swing that over to the stock market side. Data from 2025 shows that the individual investors have more money in the market than at any other time in the market's history.
That's according to the World Economic Forum. That's even with the historically high price to earnings ratio for the market. So there's more people investing now than ever before, even though the market is just as overvalued.
If maybe not, it might actually be more so overvalued than the housing market. The 90-year medium price to earnings ratio is 17.96, and the current price to earnings ratio sits at 27.56, according to JP Morgan. So the market is significantly overvalued, but people actually don't have the same reservations they do when it comes to houses.
They're just dumping money into the market. So that paradox is one of the things that bothered me when I first got out to New Mexico. I was like, well, why? That doesn't even make logical sense why you understand overvaluation in a house, but you don't understand overvaluation.
Or maybe you do, but you just don't care when it comes to stocks. I find that interesting because you said that statistic back a little bit ago that 93% of homebuyers regret their decision. It doesn't seem like a lot of the stock people regret their decision because I think they're getting hyped up in the FOMO because it's a collective thing versus a singularity thing.
Very interesting. So why is that? So then my brain automatically goes to why. And well, the first thing that popped up when I said why do people buy stocks but not houses is emotional attachment and tangibility.
When it comes to houses, buying a home is often a personal and emotional decision tied to whether right or wrong feelings of safety, security, and establishing roots. Overpaying then can become a source of immediate regret or a potential obstacle to achieving long-term financial stability. Whereas when it comes to stocks, stocks can also trigger emotional responses like fear and greed, but they lack the same tangible connection as a home.
Because you actually own the house, you can touch the house. Very rarely can you touch your stocks. You may very well own them, but you can't touch them.
So because that sensation where you can't actually hold your stocks, the overpaying may feel less impactful due to those things. Yeah, it doesn't really feel real, which is interesting because it's that same concept, but it's working in reverse for you. People say that they hold their houses longer because of the real tangible component.
So it's interesting how- But we know that from our previous podcast. That's not correct. Longer, I mean, I guess, well, I don't know.
I didn't actually look that up, but previously we went over home buying and the average American only holds their house for 12 years. I don't know how long the average American holds stocks, but I would assume it would be- Less frequently. I would think they're changing the sentiment based on the consensus of most people, whereas homes are a lot more cumbersome to liquidate and sell and buy, and then you have to figure out somewhere else to live.
It's not like you're like, because that's actually our issue right now. We're in the middle of living in this, and it's so hard while you're working on it, while you're in it. Same thing.
You need somewhere else to go before you can sell. So what Carmela just said literally ties into the second point whenever I was trying to answer this paradox, why it keeps happening. And the second is liquidity and volatility.
With homes, real estate is significantly less liquid. Transactions take weeks or even months to complete. And this illiquidity can make overpaying feel riskier, as it's harder to actually exit the investment quickly if you mess up.
Whereas stocks, they're highly liquid, meaning they can be bought and sold quickly and easily. This gives inventors a sense of control and the ability to react quickly to market fluctuations, or if they just overpaid for something, made a mistake, they can just sell it for a loss, and it's not a big deal. I think what I gathered from reading on this topic, people don't think stocks are real.
And money lost and money gained in stocks, it's not real like it is when you buy a house. For whatever reason, money, it's the same tool, but it's completely differently viewed when it's stock-related money as opposed to real estate. I find that so fascinating, because my perspective is completely the opposite.
To me, when you buy a house, you have money locked up in it, and you really don't have any concept of what your value is, because you don't actually have a brokerage account with an actual line item that says value of account in numbers in an actual bank account type situation. Whereas stocks to me is the exact opposite. But I will say, the other thing too with stocks, they got rid of the whole fact that you need trading fees.
There's no trading fees anymore. So I can see how on the surface stocks would actually look easier to get out of a bad investment. They got rid of the trade fees, and then they got over that whole... Remember back when we first started investing, say we bought something, and then we sold it the same day, that was a big problem.
That's not really as enforced as it used to be. And you don't actually have to hold your money for two days to wait for it to clear. You can sell a stock today, and then pick up another stock today without having to wait for that money to actually clear.
Well, that's why I said on the surface they actually look like they're not costing you anything. But in all actuality, they're costing you more because of the liquidity component. Because people will jump in and out of stocks, and most people buy high, sell low.
So you're like micro-bleeding bad investment after bad investment after bad investment, or bad trade after bad trade. Whereas a home... To me it's harder to wait holding a stock than it is holding a home, because of the pain in the ass that it is to buy and sell a house. Because you have to hire the real estate agents, you have to pay the transfer costs, you have to do the closing costs and all that stuff.
You don't have that problem with stocks. But I could see how they could potentially look less costly on the surface, but stocks probably actually cost you more money than the home thing. Yeah, the liquidity is a huge difference between real estate and stock.
So yeah, liquidity. But I think the home sale thing would depend- That's a huge stock. ... on the market conditions or the cost value when you go to actually try to move them.
That's a tricky one. Depends how you look at it. But I could see why people would- Liquidity is probably one of the bigger reasons, but there are some psychological biases that we've actually dug up previously that actually are just as big contributing factors as to why.
The first being anchoring bias. If you recall when we discussed anchoring bias, that's when you're a person fixated on a number. Say I bought gas for $3 last week, so it's $2.89 now, so it's a really good deal, so I'm going to buy more gas.
Well, that actually applies to homes and stocks as well, because investors might fixate on past stock prices or valuations when making decisions, which will lead them to overpay because they might just be anchored on a, say, NVIDIA at $145, even though that's overvalued. They might just fixate. Well, NVIDIA at $145 is a good price, so that anchoring bias might actually lead them to overpay for stocks repeatedly because they have the wrong data, so they have the wrong anchor point.
Whereas with homes, you actually have a- For good or bad, you actually have a better anchor point because of the comps and the Zillows and the red fins and everything. You can literally just click on there and be like, well, your house is worth $300,000, so you wouldn't want to pay more than $300,000, and if you're selling, you wouldn't want to sell for less than $300,000 based on just that anchor bias of that number that you could find readily available on the internet anymore. Whereas they don't really have that for stocks.
I'm trying to think. A couple places have it, but you have to pay premium subscription fees for it, and people aren't really doing that, so they're going into it blind just by whether it's hearsay with their friends or the experts that they follow on social media or get emails from, and they say, well, NVIDIA at $145 is a good price, so they have this price of $145 stuck in their head, anchored in their head, which could be wrong because they don't actually have the proper data. That's why I think it's easier to actually have an anchor point with houses just because it's so readily available.
You can type in pretty much any address and get a number for a house. Yeah, Zillow is so easy. So easy.
Did you see when I sent you the new Zestimate for freaking the dozer house? That is really high compared to what I thought it would be. I think that's low, actually. 316 or whatever it was? Yeah, I think it should be worth more.
I think it should be closer to four. Wow. Dang, I bought that for 152, guys.
Because of the land. I don't think they're encompassing the land value into that number as much as they should be. So that's the first bias, and I think that is a huge, I think that is the biggest bias.
That is almost up there with liquidity when it comes to why this occurs. The second bias would be overconfidence, the overconfidence bias, basically the cocky bias, I know everything or I know everything about this, I need to know. People might actually overestimate their ability to predict market movements and believe they can identify undervalued stocks, potentially leading them to pay more than what is warranted, which that happens a lot.
That happens with me every now and then all over. I know medical properties inside and out, and I know that if it's below $5, it's a deal, but even I didn't look at the current earnings report. I'm not saying this happens now, but it used to.
But I didn't look at the current earnings report and see, hey, their free cash flow and their debt and everything grew, the stock's not worth $5 a share anymore, it's worth like $4. So I actually, because I'm overconfident, because I looked at it previously and thought I knew what I was talking about, and I didn't keep up to date with stuff, my number was off because I was being arrogant. I could also see people thinking they know a company from their own consumer consumption standpoint.
So they're projecting their own enthusiasm onto it. And then if you add the mentality into that component where other people have that same sentiment, yes, that drives prices. But sometimes when you peek under the hood, like we always talk about looking at the actual metrics, things can look rosy on the surface until you actually look at the numbers lying underneath.
Stocks won't keep going up if their foundation is screwed up. They will. Yeah, and the overconfidence thing actually applies to houses as well, but it actually manifests in a completely different way.
The overconfidence bias here actually is probably saving people. They just don't know it. So this is actually a time when a bias can actually be positive.
Home buyers and sellers think that the prices are going to go down. So the sellers are like, oh, crap, the prices are going to go down. So I'm going to put my house in the market.
Whereas home buyers are like, well, the prices are going to come down. They've gone up for like 15 years, their prices have to come down. So I'm not going to buy until they come down.
And interest rates have been elevated for like two years. And I know interest rates are going to come down. So I'm not going to buy a house until interest rates come down.
So this is like a perfect example of how a bias can actually be unintentionally a positive thing, because that's a bad frame of mind. You shouldn't be thinking like that. You know everything about the home market and interest rates because you don't.
Especially with the situation that's happening. All the manipulation that's going on, the numbers are all over the place. And crap, what happens if they actually just raise interest rates again? But I think the most important bias that manifests itself when it to buying a house versus buying stocks is the herd mentality.
Obviously, we've discussed it before with stocks like FOMO, everyone's buying like say NVIDIA or Palantir. So I must get into it no matter what the cost is. So you're probably like, I would say, probability wise, 90% you're going to overpay for like Palantir or NVIDIA because the herd mentality has reached it.
By the time the herd's buying the stock, it's overvalued. The same thing actually applies to housing. And this took me a hot minute to comprehend this.
Because there's so many people on social media saying, oh my God, houses are so expensive. You want to follow the herd and be like, well, houses are expensive, so I'm not going to buy a house right now. Or interest rates are too high, so I'm not going to get a loan because interest rates are too high.
And that herd mentality is actually, again, unintentionally benefiting you because you're following people on social media or your friends are talking about it. So that's another psychological bias that has a huge impact on the stock market and then the real estate market. Well, the thing I find potentially interesting about the herd behavior, like if everybody now, you said 93% of sentiment or whatever the heck that statistic was, 73, 83, I can't remember, think that the actual market is overvalued or the housing market is overvalued.
Isn't herd mentality usually the opposite of what it actually is? So wouldn't that actually signify that now is the best time to buy a house if everybody else thinks it's overvalued? That's for stock market, not real estate. Okay. Because if you combine all these biases up plus with the liquidity, you can determine that the housing market's overvalued.
The housing market is overvalued. And that is every data point that we've brought up with the inflation things and every data point that we've brought up with other economic factors where you see the price of rent and mortgages has gone up 60% the last 10 years. Every metric is saying, hey, this is overvalued.
The herd mentality in this case is actually good because everybody's saying you shouldn't buy a house right now, it's too expensive. And you listen to other people because that's, I guess, what normal humans do. I don't know.
I'm not normal. I don't watch- They outsource their own research. A lot of people do because they think it takes too much effort or time or whatever to research stuff.
That's bad in a lot of instances, but sometimes it's good. Like I said, again, unintentionally good because everybody else is saying, hey, this is bad. But at the same time, when it comes to cars and clothes and shit like that, they say, oh, these fancy cars are the best you see people buying cars or these fancy clothes are the best you see people buying fancy clothes.
This is just one of those times when people are saying, hey, the housing market is overvalued and it benefits you to actually listen to it. So I think that's why between the overconfidence and the herd mentality, it's a huge benefit to help people avoid overpaying for a house. So it's working in the favor right now, but at the same time, a broken clock is right twice a day.
It is. And there's going to come a point whenever the herd says that buying a house is still overvalued, but it's actually a good time to buy a house. So there's going to come a point when this flips from being a positive to a negative.
And they won't know about it until after- I just don't know. After people are already buying all the lower end stuff and then the prices will actually go up and then they'll get in higher because if they're following the herd, they're waiting. The confirmation, right? They're waiting for the consensus.
Well, I think another thing that we didn't like, but the data didn't actually address. And I think this is a huge component of why the housing market is overvalued is because you have investors and institutional investors and people that have lots of money are buying all the cheap houses. So like all that's really left is super expensive houses because everybody else has already picked up the ones that are a good deal.
So like all that's left in the housing market is stuff that's overvalued. That's a contributing factor. That's why the rents have gone up so much because it used to be like, if you owned a house, you just buy a second one, it'd be a rental property, but you can't do that anymore because the institutional people are buying up all the ones that you can use as a rental property.
And when they buy it, they're not going to be tenant friendly. Like, oh yeah, I know your rent was like $1,100 last month, so we'll just bump it up to $1,200. They buy it and they use cold data with it.
Or the market says this house should be rented at like $1,800 for this particular neighborhood and they don't care. And so it benefits you to be like an institutional investor when it comes to real estate because you just look at the data of the, like if you're not familiar with it, what they call comps are like, if you went to sell your house, they'd be like, oh, there are other houses with your square footage that were similar to yours in the neighborhood sold for this much. So that's how much your house should be worth around there.
Well, they have something similar when it comes to rent. It's a rental comp and the rental comp says the same thing. All the houses around you that have similar square footage are renting for this much.
So your rent should be this much. And the first thing institutional investors will do is they'll bump the rent up to that anchor point. They're using anchoring bias to make money off of.
And that's exactly what's happening with these tariffs, where the foreign companies are having to deal with the tariff boosts and they're passing it down to the customers. So the people who are local see that if they can get a higher price point, if they just raise it up to just below that thing. So they're increasing their prices to match similar because of the greed factor.
So again, it's an anchoring bias that's taking effect. Anchoring bias is fascinating bias. Like I don't think we gave it the props the last time we talked about it, but it is fascinating.
It pervades a lot of things. And sometimes you even do it to yourself. If you watch a commercial or you watch something long enough or a price of something, eventually, even if you initially think it's too expensive, if you see that price point long enough, you realize that that's actually the price point.
And even if it comes down just a little bit below that, you're like, oh, it's on sale, even if it's still technically overvalued. So the amount of exposure can create an anchoring bias to like it is very human psychology. Psyche is so fascinating, so fascinating.
Like we screw ourselves a lot of times because we're so so adaptable and like we recalibrate constantly. And the last area that we'll discuss when it comes to like why this paradox phenomena is actually occurring is differing perspectives. This is just a broad characterization.
Like when you're buying a house, you actually prioritize factors beyond like financial return. Like I don't think most people buy a house saying in 20 years, I'm going to make 30 percent on this house. That's not why you buy a house.
You actually want like location and lifestyle fit school districts, shit like that. So that's what makes them more appealing for you to buy them in the first place is because of things that don't even really reflect with price, whereas stocks are all about making money. That's all about financial metrics.
So that is just a huge different perspective on the two different things that are completely different. So like when I when I went over this, I was like, so why are people unwilling to overpay for houses? One of the reasons they're not like they're like, no, is because houses or prices are so high, they're not willing to pay that price for a school district that is not that good or that the only house they can afford under their current financial thing is a place that doesn't have like a grocery store or a gym or anything like that nearby. So they're unwilling to to pay a premium price for the lack of services, basically, whereas with stocks.

It's all about making money. So if people think they can buy something that's overvalued and Goes back to the overconfidence. I I know that NVIDIA NVIDIA is overvalued, but I think I can make money off it type shit That's a just it's a different perspective completely when it comes to stocks versus home So that's it's interesting all the stuff I didn't even think of like I never thought any of this shit when I came to like buying a house or stocks I was like what so like this is all like they'll open my eyes and I was looking into this It's fascinating and I just threw it in the GPT Do you want me to just play around with that a little bit just for a different perspective or shits and giggles? Yes, okay, and I don't know if you might have heard us.
It might have been a YouTube reel or something I don't even know where we posted it, but I've been tinkering around with building GPT's Especially from the monetary concept and I'm gonna screen share like this question specifically into two of the ones that I've built out to see the differing thing and if it lines up with what Tim said or Gives us a whole different perspective because it's pretty fascinating All right, so throwing it into one of my GPT's that I built specifically for Synthesizing information this thing's this is the one that thinks like me which is fun core question Why do people overpay for stocks with less? Resistance, but become highly sensitive to overpaying for a house, especially in today's market psychological framing investment versus liability Stocks are mentally filed as investments future oriented intangible expected to grow intangible I think is the keyword we talked about with what Tim just covered recently Homes are seen as expenses or debt burdens, even though they may appreciate the psychological weight of a mortgage is heavier I would 1000% agree with that because I consider this freaking atrocity that we're in right now as a freaking burden holding costs below Most people actually don't think of it as a liability till they think about it So they actually buy it but that might explain why it's 93% of people have buyers remorse when it comes to buying a house What do you think about you're like? Oh shit. I probably shouldn't done that People justify overpaying with FOMO It'll go up but fear overpaying for a house because it's more of a permanent mistake That is true and that goes into what we were talking about with like it takes longer to sell it Hard to reverse it you have all the extra costs that go into getting acquisition Market norms and cultural signal signaling stock markets. It's normal to chase growth Even if valuations are high overpaying is seen as strategic risk-taking That is an interesting sentiment that we did.
I don't think we talked about and what you just talked about Housing markets. There's still a lingering belief that you should get a good deal paying too much feels like being duped or trapped interesting we discussed that with the herd mentality and the Overconfidence, but yeah, and culturally home purchase equals adulting milestone. So there's more pressure to do it, right? I would actually say that that's true because people are like you should buy a house.
You should buy a house That's not really the herd mentality that's more of a familial. Yeah, I think it's like cultural like milestone stepping through life lifestyle Obligations, but like one of the funniest things is so many of my friends when they've talked about buying a house Every single one of them preemptively said I got a really good deal, didn't I and we analyzed it and we were like That deal sucked, but all of them I was like, wow, wow, and I even overpaid for the condo I think but we didn't get screwed on those or how so Third option or the third reason liquidity and optionality stocks are liquid Easy to exit if things go wrong homes are illiquid You're locked in harder to reserve reverse the decision overpaying for stocks feels reversible. Whereas for homes it feels permanent and risky That is something we definitely highlighted when we talked about the thing number four Information asymmetry and comparison anchors.
I guess that's part of the anchoring bias Stock price is a public visible metric, but people accept that it's detached from fundamentals market sets the price fascinating Whereas home prices are tied to comps neighborhood and negotiation you can see you're overpaying relative to social norms Anchoring is stronger in housing which equals greater sensitivity. That's actually a really interesting perspective based on the anchoring bias that you talked about I'm smart My god, oh the now wealth narratives check this one out stocks Equal speculative wealth. I'm playing the game homes legacy wealth This is where I build security overpaying for stocks fits the speculative story overpaying for houses violates the security story That's really really interesting Yeah, and that's part like when I was I didn't go into full-fledged detail about the perception But yeah, that's a perspective, but that's a perspective.
Yeah Current market dynamics specifically for 2024 to 2025 stock market optimism is fueled by AI hype monetary policy loosening Etc housing market is squeezed high rates low supply inflated prices from pandemic demand fear of buying at peak emotional backdrop Stocks equals riding the wave whereas homes equal. Am I the sucker at the top? This is like rationalization flawed Overpaying feels strategic in stocks But reckless in housing because of how each is framed in terms of identity reversibility and risk containment That's insane. That is Going to full-fledged detail about everything.
But yeah, this is all yeah, and then I have the one I built for the human needs I threw it in here just to see what the hell the the situation was all about and here Stocks are abstract intangible and tied to identity signals like intelligence foresight and status Overpaying feels like a calculated risk or an empowered choice, especially when narratives like I'm betting on innovation are active It triggers autonomy. I get to decide how my growth how to grow my wealth It also feeds recognition if this pays off. I look smart if I if I lose I was bold Stockbuying is often a performance of freedom plus foresight even when irrational overpaying still feels like agency whereas for houses They're viewing it through the anchored risk and threat to safety.
So a house is a grounded Physical commitment. It's not just a financial asset. It's a life anchor Overpaying here feels like risking your root system.
It touches security. What if the market crashes? What if I'm trapped? It's also hits your order your like sense of clarity. Is this a rational decision? I can explain house buying invokes survival systems Overpaying threatens the sense of safety not just money.
Why the sensitivity difference now Stocks feel like reclaiming autonomy in a chaotic system. I can still choose my bets Housing feels like risking too much security in an unpredictable landscape. I might get locked into a collapsing structure So even a rational behavior around stocks can feel empowering while overpaying for a home feels Exposing like betting your foundation instead of your flair.
That's fascinating actually So that's what Carmbot says that's what Carmbot says so my two Carmbots that I built Timbot says what I just said. I am Timbot Yet There's a lot of crossover by what we went over and like what the AI says So like it's just interesting that the AI pulled pretty much the same data. It just tweaked it to Perspective shifting and getting it in a different viewpoint The only thing that really matters is the viewpoints that like cause a resonance within yourself for you to like check your own biases and stuff and like actually Intentionally think and make decisions instead of doing stuff out of pattern and like compulsivity.
That's the key here So why was this a topic? Why does this matter? Like this is I mean, this is well No, but what it did though is it actually created something that there's not a lot of data for on the interweb Which is financial inconsistency If you because if you have this type of inconsistency Inconsistency when it comes to finances when it comes to investing versus home buying Then I'm betting much like 50 to 60 percent of Americans according to lending tree You probably live paycheck to paycheck financial health polls in 2024 found 70% of Americans are financially unhealthy So inconsistent thought processes such as overpaying for stocks, but not for a house falls into this unhealthy financial behavior Make no mistake be willing to overpay for stocks because of whatever and Being unwilling to overpay for a house because of whatever is unhealthy Financial thought yeah, because it's inconsistent. That means your principles or that your justification and thought process isn't dialed in yet You're using rationalization to external metrics, which makes no sense Which means what it like so if you tweak it down if you tweak it down to the psychological level this conundrum Paradox whatever you want to call it It shows the psychology of most Americans where we don't mind overpaying for some things But refuse to overpay for other things that inconsistency group Inconsistency presents a problem when it comes to funding your retirement Having an emergency fund having a budget if you lack the discipline to apply your valuation to Evaluation metrics to all aspects of your life. You actually may never be financially independent because of that inconsistency That's a very inconsistent thought pattern.
That's not rational like at all I mean Carambot tried to put like some rationality on to it, but even just listen to it It's like the inconsistencies are glaring in that Yeah, and like again the intentionality like I said the compulsivity you can have nuances based on subjective Things but if you don't actually have a very detailed underlying thought process You just kind of like going with your gut and saying cool that weird inner thing that happens Like that's telling you there's an incongruency That's not meshing up another aspect is the inconsistency will then make it extremely difficult to budget and plan I mean, I know it seems like a stretch saying well, I'm not willing to overpay for a house But I'm willing to overpay for stocks That's not the same thing as budgeting and planning but like if you break it down a level below like investing to like your financial consistency your financial thought process Whenever you have fluctuations like that It becomes challenging to create and stick to reliable budgets and a plan and everything that makes it Harder to manage expenses to set financial goals and to actually plan for the future like whenever you have that inconsistency at like the almost it almost equates to like the Psychological or cellular level when you're that inconsistent. It's going to spill out into other aspects of your financial Yeah, your foundation's messed up your strategies messed up And if you don't have a consistent framework and strategy like what do you have you have like vaporware? It just it can hijack you at any given point. That's scary.
Like that to me is the most scary Insecure like unsafe feeling is having that inconsistency Personally, I can't stand consistency they're finally that inconsistency will most likely lead to an inability to build savings and to establish emergency funds because the Fluctuating income that you are going to have whenever you have a core level disruption in your consistent financial planning. It's going to be Extremely difficult to put money away for savings and that'll leave you vulnerable during Unexpected expenses or find out financial shocks like if you dig this is like a core Tenant that I didn't know was a core tenant when I actually started looking into this But like the fact that you're willing to alter your values For one area and you're willing to hold your values for the other area. That's a bad bad juju That's a lack of alignment like we always talk about that the internal alignment situation like that's external rationalization Justification was it making excuses type thing? That's not based on your inner integrity inner alignment Because like if you think about the reason I'm bringing all this crap up I mean it seems like redundant But like if you think back to like we have basically three core tenants when it comes to like everything that we've discussed through the Years, it's been years now right two years.
Mm-hmm whenever you're dealing with the financial independence journey The first is your side find that your psychological biases have to be understood Addressed and under control and obviously they're not if you're if you're falling into this financial inconsistency The second is you have you must have a detailed budget and financial plan Which you obviously won't if you're like you're just this messed up when it comes to financial Consistency and the third thing is you must have a emergency fund and you're not going to be able to establish that with these inconsistent financial things more than likely like the probability of being able to have that It's not and the reason that I keep harping on this is because I finally found it I finally found like how to describe it. So people understand what I'm saying because they're not understanding what I'm saying Within the realm of financial independence. There are two forms of independence.
Really? The first is self-reliance. The second is asset reliance self-reliance Self-reliant financial independence is when you support yourself through your job your work your side gigs or your hustles or whatever your You're able to trade your time and energy to create economic value for yourself, that's the first one time for money The second one is asset reliant financial independence That's when you have passive income from your assets that which will exceed your expenses You no longer have to trade your time energy support yourself. You're decoupling time from money.
That is what true financial sovereignty and freedom is decoupling time from money The whole thing that we just discussed the inconsistencies between the stocks and the home buying is 95% of the people that suffer from that it might even be higher. It might be 99. There's no like Empirical date on it, but I'd be willing to say it's probably it's in the high 90s Yeah, people don't think it's okay to bow to overpay for stocks But not overpay for a house are gonna fall into the first one Self-reliant that means they have to trade their time and their and their Effort and their life for a job that gives them find like gives them finances so they can feel independent So this is a huge component that I didn't know as huge as it was when I first started this so it was actually kind of Tickled my fancy whenever I got to the nitty-gritty of I was like, wow, I just uncovered some crazy shit.
I love my fancy No, I love that. That is a new thing and like I've actually spent the last couple days Coming up with like rebranding for what we actually stand for because our whole thing really is about that asset-reliant financial independence that Decoupling time from money thing. That's what the whole purpose of the channel is like coupling finance Basically autonomy through like finance in individual autonomies is all but impossible without financial independence But you cannot be individually autonomous or free if you don't have financial independence It's not going to happen and if you don't what did the Einstein say Benjamin Franklin say if you don't figure out how to make money while you're sleeping you're gonna work for the rest of your life and if you want to be nomadic and travel and truly feel free as opposed to like locked into that job and then because the Job market is so freaking Competitive now for remote work like you're gonna have to be on call 24-7 Because of hours shifting and all this other stuff to maintain those actual side gig hustles to be able to support yourself to travel But then you're again, you're not really getting that freedom and that relaxing vacation.
I actually think the digital nomad Conventionality that's happening right now is way more stressful than anything else because of the competition factor. So like this is the way There's this whole desire for everybody to report like everybody has to report back to the office So like I think the digital nomad is probably Gonna become extinct here soon unless we pivot it to this asset reliant financial thing Like dude, I'm just I'm very rarely speechless when I when I got done writing this I was like, hold crap I started with just like well, there's a paradox. There's like Inconsistencies in this.
Well, why is that and as deeper and deeper I got it was like, holy crap This is like core tenant type shit. Yeah It's being expressed in something that I was just like a you know, one-off email like whatever. Okay, and it's like wow We've just reached core level I love root causes and core core principles.
Like this is my freaking lifeblood here. This is a distinguishing factor So that is that podcast that hopefully Helps or makes you think I'm hoping it makes people think that's very least like Here really is to like catalyze like a change in thought break it down like if you break it down below cuz like stocks are a big purchase and Homes are a big purchase if you break it down below that to like say hey I'm willing to pay four dollars for a hot dog when I'm out or I could just buy Hot dogs at the store for two dollars and have a hot dog when I get home Because it's the same thought process in that two examples. It's just extreme ones extreme You're spending a lot of money on something And other ones kind of frivolous like oh, it's just a hot dog but it's the same thought process that goes into if you're willing to pay four dollars for a hot dog at like say a bar or something like that It's whether you've essentially conditioned your pattern to instant gratification to your compulsions or whether you can pause Come up with a plan and implement to prevent future future pain and stick to it and don't rationalize Your rationalizing is is bad and it is really hard to like figure out if you're actually in bias land Rationalization land or if it really is like a clean clean thing And that's one of the reasons I'm using a lot of the AI's with things because it helps you actually Shift things because I've built mine to essentially like challenge you and like gut-check your ass because these ones that just compulsively agree with you So that's that I mean good good next week we're gonna talk about goldfish The gold fishing concept where you're like grow to smash yourself into the size of the tank.
It actually has It's the goldfish theory. I like I like I have a goldfish theory Every time we have a counter cleaned off at home She puts it on the counter and it just okay that way it starts off It was like one or two things but within like a month the whole counters full of shit So she's goldfishing because there was empty space in her in her aquarium. She goldfish to cover up the counter.
There's actually a Financial thing like a lifestyle creep, but to me it's the goldfish theory. So we're talking about goldfish next week Yeah It's so fun the week after that we're actually going to go get back into like some some stock stuff like actual tickers and things I'm Probably gonna do like where the the macro climate is currently because like the beginning of the year the macro climate was one thing and The macro climate is completely different right now I mean there are some carryovers like AI and stuff like that, but you probably have to adjust your portfolio a little bit to actually Take advantage of where we're going economically and I do want to reiterate the whole reason we talk so much about psychology behavior and and all these concepts is because It is the foundational pillar that not very many people actually talk about in the finance realm in the investing realm in the passive Income decoupling and all that stuff. They don't talk about it and if you do not have that dialed in you are literally the victim of compulsions and like faulty beliefs and Just behavior hijacking The odds as individual investors are against you to begin with so I stack the odds against you don't have your shit together Your odds decrease even worse than they already are and you don't even have to be a hundred percent perfect You just need to be aware of like things that are happening because like I'll give in to temptations all the time But I'm like, okay, so I'm doing this again And then I each time I try to do better the next time or I try to set up actual plans to prevent the situation Happening the intentionality and like even if you look at the Alcoholics Anonymous and all these other things the first step To like healing and freedom is realizing you have a problem So like that's the whole point of these psychological episodes is realizing this is not actually serving me How do we fix it bringing it into awareness? And then that's when you can start to actually like move things into your favor I mean the real stuff is not sexy.
We don't care. This is the root foundation. We are all about root foundations Leverage points and literally domino effects.
So you stack all the odds in your favor. You will have success well, you will have success it might not necessarily equate to like Super duper wealth from the stock market overnight thing, but you If you correct your biases like so your your portfolio is not going up 20% per year So you're not super wealthy, but if you fix your biases your life will drastically improve outside of the stock market Actually fulfill the reason you're trying to get money in the first place You'll have higher fulfillment, which that's actually a byproduct of actually doing what we're doing You're you're not nice. You're getting your finances squared away, but you're also actually feeling more fulfilled in other areas of your life So it's a twofer even though it's not technically like the the core premise.
It's like an amazing side byproduct. Ah, all right guys See you guys next week. I have no idea where I'll be who knows.
I'll be somewhere Well next week's gonna be hard because your family's right there, right? Yeah, I'm saying I got might be in the van again. I might be out in the wilderness I don't know who the hell knows. Well, you need to have reception That's all that matters and then I guess not noise The noise cuz like the ones coming this week have like little yipper dogs So they're gonna be a really obnoxious and laughs I won't even be about around the house.
Well, that'll be interesting Yeah. All right Sorry about the reception. Sorry about the camera work Stop it.
You're making me sick See you guys have a good week Thanks for listening. Bye