George Kamel Calls Out 6 Pieces of Money Advice That Can Destroy Your Life

It’s easy to make risky money advice sound convincing on TikTok. If it doesn’t work out, the person who posted it isn’t the one stuck with any consequences.

In a YouTube video, Ramsey Show cohost George Kamel called out six pieces of online financial advice that can leave people worse off.

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1. Using Whole Life Insurance as Your Own Bank

One influencer Kamel critiqued promotes “infinite banking,” which involves building cash value in a permanent life insurance policy and borrowing against it.

He makes it sound like an easy way to finance whatever you want, which Kamel doesn’t agree with.

“Do not ever mix insurance with investing,” Kamel said.

Borrowing against your policy isn’t the same as withdrawing money from a bank account. According to the New York Department of Financial Services, policy loans accrue interest, and unpaid balances reduce what your beneficiaries receive.

Whole life insurance can make sense for someone who needs permanent coverage. But borrowing against your policy isn’t the same as getting free money.

2. Borrowing Against Your Home To Buy a Rental Property

Another influencer in the video recommends using a home equity line of credit, or HELOC, for a rental-property down payment. He assumes the property will earn more than the loan costs.

But rental income isn’t guaranteed, and HELOC payments can increase.

"Your home is collateral,” Kamel said, and that means you're at risk of losing a roof over your head for what he dismissed as "rainbows and unicorn farts" — i.e., fantasies and intangible allure that remains out of reach.

In its guide to key mortgage terms, the Consumer Financial Protection Bureau said that HELOCs typically have adjustable interest rates and repayment terms, including paying off the entirety of the loan at once. Taking a risk like that requires a rock-solid plan. If you can’t repay the loan, the lender could foreclose.

3. Borrowing From Your 401(k) for Cars and Other Purchases

One creator in Kamel's sights said he uses 401(k) loans to buy campers, cars and motorcycles. Since the payments came out of his paycheck, he treated it like paying himself instead of taking on debt.

But borrowing against retirement savings means “you’re unplugging all of that growth, paying interest on that loan to yourself back into the 401(k),” Kamel said. Meanwhile, the cars and motorcycles you bought are losing value.

The IRS also warns that an unpaid 401(k) loan can become a taxable distribution.

A genuine emergency might leave you with few options, justifying a 401(k) loan, but buying a motorcycle is another story.

4. Turning Personal Expenses Into Business Write-Offs

One influencer claims he can deduct a private chef by inviting clients or relatives to dinner and calling it a business meeting. Kamel was agog at why anyone would confess to doing this in a public video, describing the move as "reeking of tax fraud." When H&R Block's official Instagram account popped up in the comments to condemn the move, it appeared to agree. Leaving aside the legality, Kamel focused on the fact that it's still not a good use of one's money.

“Writing it off does not mean it’s free,” he said. “It means you’re saving a percentage of what that thing cost you in your taxes come April.”

Calling dinner a business meeting doesn’t automatically make it deductible. And even if it qualifies, you’re still paying for dinner. According to the IRS, a meal must have a legitimate business purpose to qualify as a business expense. Even then, you can generally deduct only 50% of the cost, meaning the meal surely still costs more than a normal family supper.

5. Financing a Car Just To Build Credit

Another creator argues that young people should finance their first car to establish credit.

“Don’t get stuck in this payment cycle, which by the way is what keeps people broke, especially as they chase their credit score,” Kamel said.

An affordable auto loan can make sense if you need a car and paying cash would drain your savings. But if building credit is your main goal, the CFPB suggests alternatives such as secured credit cards and credit-builder loans.

6. Relying on Cash-Advance Apps To Pay Bills

Another influencer recommends cash-advance apps to people who need money before payday. Kamel said the problem starts when borrowing against your next paycheck becomes a habit.

“You’re borrowing from the next paycheck, staying in the cycle, and it’s exactly what keeps people broke,” he said.

A CFPB analysis found that workers who used employer-partnered paycheck advances averaged 27 transactions per year and paid $68.88 annually in fees.

An occasional no-fee advance can help you cover an unexpected expense. But if you need another advance every payday, you’re using part of your next paycheck before it arrives and leaving yourself less money to cover upcoming bills.

This article was provided by MoneyLion.com for informational purposes only and should not be construed as financial, legal or tax advice.

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