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The 24-year-old astrologer lost $440,000 day trading crypto and is now living on credit card debt. Caleb Hammer responds
Personal finance YouTuber Caleb Hammer has seen it all – from models who just want to “spend, spend, spend” to the forty-year-olds who really want to “spend, spend, spend” refuse to work.
But one of the most recent guests on his show, Financial Audit, was perhaps the most frustrating yet for the host.
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Racso, a 24-year-old Vedic astrologer from Austin, Texas, had lost a huge amount of money while trading cryptocurrencies and now finances his lifestyle with credit card.
Getting a regular job, he explained, is only possible in a “worst case scenario,” but Hammer believes Racso’s current situation couldn’t be worse.
“I’m almost ready to kick you off,” he told her. “It’s the most angry I’ve ever felt.”
From “half a million” to broke
Racso started trading cryptocurrencies in 2020 with $40,000. He eventually turned that sum into $440,000. Unfortunately, his day trading was fueled by immense leverage up to 17 times its equity.
This is excessive compared to conventional measures, but it is not unusual in the cryptocurrency sector, where platforms can offer Leverage ratios it can be as high as 125. However, excessive borrowing is a double-edged sword, as Rasso eventually discovered.
He said he lost 70% of his portfolio when the FTX trading platform and the Terra/Luna cryptocurrency collapsed in 2022. Based on his own analysis through Vedic astrology (which focuses on karmaon personality traits), the events that happened to Rocso were motivated by the “eclipse of Taurus and Scorpio”.
The Bank for International Settlements (BIS) estimatedthat over $450 billion in market value was destroyed when the Terra/Luna project collapsed, while the FTX bankruptcy dissolved another $200 billion.
In total, the cryptocurrency industry lost $1.8 trillion that year, leaving three-quarters of retail investors (40% of them men under 35) with significant losses.
Undeterred by his inability to predict this market collapse, Racso now believes he can make a living as a Vedic astrologer by predicting the fate of others. He, however, admitted that he currently does not earn any income.
Meanwhile, his wallet only has a few cents left, so his monthly amount budget is powered by credit cards.
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An unsustainable debt
Racso has several cards, some with outstanding balances as high as $4,373, and he admitted to using some of them to pay off others. Even his rent is paid by credit card since he can only manage the minimum monthly payments.
He also has a car loan for partial ownership of a car he shares with his sister.
The consumer debt binge is a more enduring trend than cryptocurrency speculation. Non-housing debt had reached $4.9 trillion by the end of 2023, according to the Fed’s latest Household Debt and Credit report. report. Credit cards alone account for $1.13 trillion in overall debt for Americans. In the meantime, car loans win now student debt.
Racso justified his car loan by the fact that he plans to use his car to generate income through carpooling. Although he has signed up, he has not yet started offering rides. His lack of income and monthly debt service leave him with only $2 in his checking account.
Hammer simply described him as a “ridiculous clown.”
However, Racso’s situation, while dire, could potentially be salvaged with a solid income source, tighter monthly budgets, and weaning ourselves off the reliance on credit cards. The only problem is that he must first recognize the problems if he hopes to overcome them.
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This article provides information only and should not be considered advice. It is provided without warranty of any kind.