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Stupid Financial Trap Middle Class People Fall Into
Stupid Financial Trap Middle Class People Fall Into
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0:00
From insurance scams to credit cards, people are trying to rip you off every day. Want to avoid
0:05
ending up broke? Pay close attention. I’m Josh, and on today’s episode of The Infographics Show,
0:10
we’re revealing the 30 stupidest financial traps that Middle Class people fall into.
0:15
Number 30:
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According to YouGov back in 2022, the Insurance Industry ranks an impressive 4th in the
0:22
rankings of America’s most hated industries - behind only tobacco, news media, and cable.
0:28
And one of those literally gives people cancer.
0:30
Part of the reason people hate the insurance industry so much is finance-ruining grifts
0:35
like “Whole Life Insurance” - which can utterly destroy even well-off white collar professionals.
0:40
A Whole Life insurance package - unlike term life, which only covers you for a set number of years
0:45
- lasts from the moment you purchase it until you die. That’s when it pays out a death benefit - and
0:50
maybe even some cash value along the way. Seems like a stable, long-term investment? Nope!
0:55
That’s what they want you to think.
0:57
You’re signing up to pay insurance premiums for your entire life,
1:01
which often ends up costing 8 to 10 times more than a term life policy - while paying out less
1:06
when you kick the bucket - presumably from a heart attack after looking at your bank account.
1:11
And that’s just the beginning. Number 29:
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According to Pew Research Centers, 24% of Americans think having a lot
1:17
of money is the most fulfilling thing in life. Rising living costs and the push to
1:22
save more have forced Americans to delay retirement and work longer than ever. At
1:26
least you’ll bolster your savings a little more, right?
1:29
That’s another nasty trap the money men are setting for you.
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The average life expectancy of a person in the US is 79. Work until
1:36
65 or later and you may only have a decade to actually enjoy retirement. Even worse,
1:41
those years are statistically the most likely to be spent frail and battling serious illnesses.
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But at least you’ll be driving something nice to that job you
1:50
can’t retire from… right? Not if you fall for this next one.
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Number 28:
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It’s the kind of thing you dream about as a kid - swaggering into the dealership, buying a new car,
2:00
and rolling right off the lot. But it’s one of the worst things you can do. And it’s all
2:05
because of one word that sends a chill down the spine of anyone interested in finance:
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Depreciation.
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In your first year of buying a new car, its value will depreciate by 20%. And it keeps falling as
2:17
time goes on. It’s only considered a new car while it’s still on the lot, but the second you drive
2:22
it off, it’s used and priced as such. All that extra money you paid will vanish into thin air.
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And the worst part? Everyone says buying a used car means inheriting someone else’s
2:32
headaches - but a new car, with all the latest tech and higher replacement value,
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hits you with even bigger insurance premiums!
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And just like that, your dream car is now a nightmare.
2:42
This next trend convinced millions they were getting rich - while draining their pockets.
2:47
Number 27:
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NFTs - Non-Fungible Tokens - are blockchain-authenticated, usually
2:52
ugly little illustrations designed to be unique and randomized. People bought them
2:56
as speculative investments, hoping rarity would drive their value up.
3:00
They were all the rage during the early 2020s crypto craze.
3:03
But next time you see NFT, it’ll save you a lot of heartache to
3:07
think of it as meaning “Not Financially Tenable.”
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Around 23 million people didn’t know this, and are now sitting on worthless blockchain
3:14
JPEGs. According to NFT Scan and CoinMarketCap, almost 69,800 out of 73,000 NFT collections have
3:22
lost all their value - leaving everyone who bought in financially devastated.
3:26
A perfect example is the NFT of the first ever tweet by founder Jack Dorsey,
3:32
sold for £2.3 million in 2021 and reduced to a mere £1,200 in 2023. That’s less than $2,000.
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If you want to keep your money, maybe hang back the next time you
3:45
see a crazy speculative investment trend that everybody is hyping.
3:49
The next trap is something most Americans are already carrying in their pockets.
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Number 26:
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Because everything is so expensive and wages are stagnant, it’s not uncommon for people to
3:59
use credit cards. In fact, 82% of adult Americans have one - and often several.
4:04
In 2025, America’s total credit card debt hit around $1.28 trillion.
4:09
Many struggle to keep up and just make the minimum payments to avoid late fees.
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And that’s exactly how they get you.
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The minimum repayment is often only 2 to 3% of the total you owe, but all the while,
4:20
the interest is still accruing. That means you pay more money over time. One source,
4:25
MyBudget, gives this example: If you owe $5,000 on a credit card at 18% interest and only pay
4:32
the $100 minimum each month, it could take more than 30 years to clear the debt - by
4:37
which time you will have paid over $12,000 in repayments. Over double the original debt.
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Think about this next time you’re making a repayment.
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And that slow bleed? It’s nothing compared to what's coming.
4:49
Number 25:
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The number one commodity in the 21st Century is convenience. And companies have realized they can
4:55
take advantage of this. What could be a better example of this than food delivery services like
5:00
DoorDash and UberEats? It feels even more practical if you live out in the suburbs.
5:04
But much like credit card repayments,
5:06
it’s a financial death of a thousand cuts when you look a little closer.
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You might think nothing of DoorDashing in your meal when you’re tired after
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work on a Friday night - until you realize that items can be as much
5:17
as 39% more expensive on these delivery services.
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And that’s before you get the added delivery charge and driver tip.
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A meal that might cost you $40 if you buy it in stores would be as high as $54 over the app.
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So if you’re ordering in multiple times a week, you’re bleeding out and you don’t even know it.
5:35
But that’s nothing compared to our next financial trap…
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Number 24:
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Ah, the lottery. It’s like being struck by lightning - except it pushes you into
5:45
a new tax bracket. Americans are paying big to play a game they’re almost guaranteed to lose.
5:50
Your chances of getting killed in a lightning strike are around 1 in
5:54
187,000. Your chance of winning the PowerBall are 1 in 292.2 million.
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It’s not even close.
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According to CNBC, half of Americans play the state lottery,
6:05
and depending on the specific source, the average American spends between
6:08
$300 and $1,000 on lottery tickets every single year. That’s money you might as
6:13
well toss into a wishing well. Needless to say, it’s far better left in your pocket.
6:18
And speaking of dreams… the American Dream itself might be one of the most expensive traps of all.
6:23
Number 23:
6:24
It’s the middle class dream to actually own your own home rather than renting. And in 2024,
6:30
mortgage repayments actually were cheaper than rent - which probably has a lot of
6:33
us considering a call to the Samaritans. However, this comes with another financial trap for owners,
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and it’s one that seems to be getting worse every year along with inflation:
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Maintenance costs.
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According to Forbes, the annual maintenance cost for a single-family home is approximately
6:48
$10,400 per annum, with a 5.9% year-over-year increase. Isn’t life just absolutely relentless?
6:56
Even when you’ve got the dream situation, there are insanely expensive caveats.
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But homes aren’t the only “heartwarming” purchase that can quietly wreck your finances.
7:05
Number 22:
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Here’s when it’s gonna start getting really bleak. Remember to like and subscribe!
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You may think that pets add a little extra meaning to your life, but they can just as easily be like
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an anchor around your neck, dragging you down to financial oblivion. Let’s look at the most
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popular pet in America. There are currently 48.3 million dogs living American households.
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While the dividends of owning a dog are largely seen as love and companionship,
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you can’t buy a Lamborghini with either of those. So let’s look at
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the real costs of owning one of these four legged freeloaders. According to
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the Wall Street Journal, up front costs for obtaining a dog vary from $1,100 to $4,400.
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But that’s just where it all starts.
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You’ve also got spaying and neutering, vaccinations, training, food, routine checkups,
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grooming and physical supplies That adds up to between $3,000 and $9,500
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And then it’s time for pet insurance!
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And if you’re hoping for more than one pet,
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feel free to add the appropriate multipliers to all of the numbers here.
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Now we’re about to talk about lifetime damage.
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Number 21:
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Are you a millionaire? We’re gonna guess probably not. But did you know
8:07
that if you’re a committed smoker, you might spend as much as $1.6 million on
8:11
cigarettes over the course of your life? And that stat came out in 2016. Adjusting
8:16
for inflation over the past decade, you might be looking at as much as $2 million by now.
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But if alcohol is your legal “take the edge off” option of choice,
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that’s also going to financially bleed you. The pandemic super-charged alcohol consumption,
8:29
seeing jumps as large as 20 to 40% in some US states - so business is booming if you happen
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to be selling it. In 2022, the average American spent $583 on alcohol, each. Even if you shrug
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off the upfront costs of cigarettes and alcohol, the true price comes later, as their health toll
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adds up to a staggering global healthcare bill. Better to curb your habits now - for your finances
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and your future - no matter how “cool” you think you look with that cigar and glass of scotch.
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This next one locks you in without realizing. Number 20:
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Netflix. Amazon Prime. Disney Plus. Hulu. HBO Max. Peacock. And that’s still just a fraction of the
9:07
streaming services that entertainment is spread across these days - and it’s all getting more
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expensive. In fact, Forbes found that streaming packages got 44% more expensive across 2025.
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The average American is spending just over $42 per month on streaming, working out to just over
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$500 a year. And are you even regularly watching half of the services you have?
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It’s yet another reason to scale all that back, and watch more,
9:31
free Infographics Show videos here on YouTube!
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Number 19:
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Gambling apps are currently causing a financial and health crisis across the US,
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thanks to relaxed gambling laws. People bet on sports, elections, and even random world events,
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sometimes spending thousands of dollars every year to little or no return.
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The National Council on Problem Gambling estimates that about 2.5 million adults
9:53
in the U.S. have severe problems. Another 5 to 8 million have significant issues.
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If you find yourself as one of these people, it might just cost you everything.
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And just when you think you’ve avoided the obvious traps,
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there are contracts waiting for you - dressed up as opportunity.
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Number 18:
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A rare method of getting a foot on the property ladder is a rent-to-own deal.
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This lets you build equity with each rent payment until you fully own the home. But
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while it seems like a sweet deal, there are some major financial traps you need to watch out for.
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With a shady seller, your payments could be pocketed or used to cover
10:26
their taxes and mortgage - passing the debt onto you. In extreme cases,
10:30
they might even rent or sublet the property, pocketing extra
10:34
money while you get nothing. If you enter a rent-to-own deal, do your homework first.
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It couldn’t get worse could it? You bet it could.
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Number 17:
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What’s more middle class than having a boat out in your driveway?
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While it’s a status symbol for many, it can also become a major financial sinkhole. Not
10:50
only do boats depreciate in value just as bad as cars, it can be an expensive
10:55
hobby. Boat insurance can be costly, and maintenance costs can be considerable.
10:59
And if you feel like keeping it at the harbor rather than on a trailer outside your garage,
11:04
renting a berth will be an ongoing cost, too. And how much are you actually gonna use it, really?
11:09
Now for one of the biggest scams for hopeless romantics.
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Number 16:
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It’s a tradition as old as time. Spending 2 months of your salary on a big ol’ diamond
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ring to propose to your beloved. Except it’s not as old as time, it’s as old as 1947,
11:24
when the De Beers diamond company made this the new tradition. Before the 1940s,
11:28
only 10% of brides were getting diamond rings. By the 1990s, it was 80%.
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Instead of blowing two months’ salary on a generic diamond ring,
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spend a bit less on something personal - and don’t bankrupt yourself over a rock.
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And the debit keeps on coming.
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Number 15:
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Middle class people are careerists. They want to get their foot in the door, even if it means being
11:48
financially abused. It’s why one of the biggest scams out there is signing up for an unpaid
11:53
internship! People tell you it’s a valuable way to earn experience and build connections
11:57
in your industry - but if time is money, you deserve to get paid for your time and hard work.
12:03
Now for something that shouldn’t surprise you.
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Number 14:
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Everyone knows they’re getting ripped off at the hospital,
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it’s a staple of every hack joke in the universe. Even routine procedures
12:12
can come with shockingly high costs, long before major medical debt hits.
12:17
Here’s a little Infographics Show life hack for you.
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Ask for an itemized list of charges on your bill, where they’ll have to tell you each
12:24
thing they’re charging you for. Then you’ll see a lot of that bill disappear like magic.
12:28
And the bills keep racking up.
12:30
Number 13:
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Fashion moves fast, and constantly chasing cheap,
12:34
trendy clothes can cost more than investing in a few quality staples that last for years.
12:39
Clothes are getting more expensive, with average items costing as much as
12:43
$17 more. And that’s a problem. New clothes make up 2.3% of the average American’s yearly
12:49
spending. Buy reliable, save money, and reduce clothes waste in the process. Everyone wins!
12:56
And that’s just your wardrobe. Wait until we talk about spending that can haunt you
13:00
for decades. Number 12:
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Would you spend $33,000 on a vacation that lasts a single day? Probably not.
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But people regularly go into debt funding weddings with that as the
13:12
average cost - 40% of which is just the cost of the reception venue and the catering.
13:17
Is it really worth it?
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We’re not saying you shouldn’t get married. Just that instead
13:22
maybe you should go in with a more reasonable budget if you
13:25
don’t want your wallet to be haunted by a matrimonial ghost for years to come.
13:29
All that debt will be with you until death do you part… and even then you can’t escape.
13:35
Number 11:
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One of the darkest financial traps that all people fall into is dying,
13:40
and it turns out, death is actually insanely expensive. According to the
13:43
University of Pennsylvania, if you or a loved one died of a long illness,
13:48
the last month of your life in hospital can already cost as much as $32,400.
13:53
Actual burial costs can be around $7,800, and you’ll save a little money with cremation
13:59
at $7,000. When it comes to settling the legal matters of the deceased’s property,
14:03
you’re also looking at a few thousand more.
14:06
Even death can’t help you escape from capitalism. But check out what’s happening while you’re alive.
14:11
Number 10:
14:12
Buy now, pay later plans allow you to finance purchases and pay them
14:15
in instalments. It seems like a pretty sweet deal, you can even do it on Paypal.
14:20
But there’s some darkness beneath the surface.
14:22
Some of these services offer credit limits of $30,000,
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and that money is easy to abstract. Even if you manage to get an interest-free deal,
14:31
if you miss a repayment, you’ll find yourself in a world of financial hurt until you’re old.
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And when you’re old, new financial traps await…
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Number 9:
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Age comes for us all eventually, and it leaves us supporting ourselves or supporting elderly
14:44
relatives. And in the predator system we call America, that can lead to a
14:48
pretty brutal financial trap. At high-end retirement homes, the median cost of care is
14:53
$5,900 per month - but ancillary services can make that rise to $20,000 per month.
15:00
And even this doesn’t necessarily guarantee you a good standard of care.
15:04
It can be a brutal industry, and a sign of the fact that
15:07
our productivity-obsessed society casts away the elderly on our dime.
15:11
Most people won’t see this one coming until it’s too late.
15:15
Number 8:
15:15
Health insurance is another one of those traps you sadly can’t really avoid,
15:20
given that your life and wellbeing is being leveraged against you for
15:23
it. You’ll be paying monthly premiums for health insurance in case you get sick or
15:27
injured. But a lot of the time, you’re actually paying more and getting less.
15:31
Healthcare providers negotiate higher prices with insurers than if you were just paying in cash.
15:36
Isn’t the system wonderful!?
15:38
Number 7:
15:39
Call it a cliche, but if a deal looks a little too good to be true,
15:42
it almost definitely is. Throw in some cash and someone promises to quadruple it quickly? You
15:49
might be staring down the barrel of what experts call a High-Yield Investment Program, or HYIP.
15:55
These unregistered investments will offer shocking payouts,
15:58
the kind that would scare away any savvy investors and leave only the juiciest of
16:03
rubes. And soon, they will be parted from what little money they can spare.
16:07
If someone’s offering you a once in a lifetime investment opportunity,
16:10
do your due diligence, or you might never invest again.
16:13
Think you’re safe from fraud? Think again.
16:16
Number 6:
16:17
As the economy worsens, people look for ways to ease the pinch - and that’s when
16:21
payday lenders creep in. Increasingly, middle- and upper-income individuals
16:25
seeking quick cash end up leaping straight into the financial blender.
16:29
Even with a loan of $500 to $1,000, with a 300%-500% annual interest rate - compared to the
16:37
15%-30% APR you’d get with an average credit card - you’re soon going to be in some real trouble.
16:43
Avoid payday lenders at all costs.
16:45
Number 5:
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At the risk of sounding like your drunk uncle at Christmas,
16:50
you really wanna be careful who you get married to. It could be the worst decision
16:53
of your life. Divorce is a booming industry, raking in around $50 billion every year.
16:58
How much you could get annihilated for in a divorce will depend on your personal net
17:02
worth and the particularities of the split - that’s not our business. But in general,
17:07
the median cost is $7,000, and the average cost is between $15,000 to $20,000.
17:13
That’s before you even get into property disputes and child custody!
17:18
But there’s another seemingly innocent and quintessentially middle class decision that
17:22
can financially haunt you for the rest of your life…
17:25
Number 4:
17:25
Going to college was once a rite of passage for everyone in the middle class. But these days,
17:30
with a population more educated than ever, a degree isn’t worth what it used to be.
17:34
In a metaphorical sense, anyway, because in a financial sense, it’s more expensive than ever.
17:39
According to the Education Data Initiative, the average US cost for attending university
17:44
is just under $38,300 per student per year, including books, supplies,
17:49
and daily living expenses. Kind of like owning tens of pets with severe health problems at once.
17:56
And then comes the student loan debt.
17:58
42.3 million Americans are shouldering a total of $1.81 trillion in debt. The
18:04
average loan debt works out at almost $39,400, but thanks to the beauty of compound interest,
18:10
you might just be paying it off until your Whole Life Insurance plan pays out.
18:14
Still, there are three financial traps that are even stupider, and even worse…
18:19
Number Three:
18:20
Take every financial trap of traditional college, double it, and add the risk of
18:25
a near-worthless degree - that’s the reality of for-profit colleges. These private institutions
18:31
cut costs on teaching because the proceeds go straight to the owners. Students at these
18:35
schools default on their exorbitant loans twice as much as people who attended regular college.
18:40
According to The Guardian, from 1995 to 2015, enrollment at for-profit colleges went up more
18:45
than 460%. They promise a lower barrier to entry as a smokescreen for shoddy teaching,
18:52
bunk diplomas, and hidden costs. Avoid them like the plague.
18:56
Here’s when things get really serious.
18:58
Number 2:
18:59
Ever wanted to be your own boss? Plenty of people do, hoping to escape the rat race and forge some
19:04
financial independence. And multi-level marketing companies, or MLMs, prey on that exact feeling.
19:10
MLMs are sales companies that recruit you, sell you the supplies for you to sell on,
19:14
and encourages you to profit by recruiting new salespeople into your downline. Essentially,
19:20
they’re predatory companies that sell the concept of selling.
19:23
Some of the worst of these companies are literally illegal pyramid schemes that will land you with a
19:28
garage full of surplus products and plenty of open space in your bank account. They’ll make lofty
19:33
promises about the huge amount of money you can earn with them. But you’ll only be able to turn
19:37
a profit if you turn predatory, too, and start dragging more unfortunate folks into the scam.
19:42
According to Gerard Brody, chairperson at Essential Services Commission,
19:46
there is literally a 99.7% chance you will lose money.
19:51
Almost nothing but tomorrow’s sunrise is that certain, so stay away at all costs.
19:56
Now for is the ultimate financial trap.
19:59
Number 1:
20:00
When it comes to scams that will suck you absolutely dry, nothing beats the
20:05
utter nightmare that is the timeshare deal. It’s essentially a shared vacation
20:09
home - you use it for part of the year, others use it the rest - so the cost is
20:14
theoretically lower than renting a place you’d only visit occasionally.
20:18
The problem is, predatory management companies use this as a way to lock
20:22
you into a contract that favors them. Meanwhile, they absolutely ream you on
20:27
property maintenance and management charges that they’ve been known to ramp up whenever they want.
20:32
And while they’re sucking your bank account dry, you’ll barely use the
20:35
place - since you and every other buyer are fighting over the same peak vacation weeks.
20:40
Everyone loses, while the timeshare companies are cleaning up.
20:43
If someone tries to sell you a timeshare condo, turn around and run for the hills.
20:48
You might survive these personal money traps, but none of that matters if the
20:48
entire system collapses around you. To truly protect your wealth, you need to prepare for
20:49
the massive storm that's coming next. Click the video on your screen to watch Economists
20:49
Predict When the US Economy Will Crash, THIS is the Date right now!
