'This is the most anger I've ever experienced': 24-year-old astrologer lost $440,000 day trading cryptocurrencies and now lives on credit card debt. Caleb Hammer answers
Personal finance YouTuber Caleb Hammer has seen everything from models who just want to “spend, spend, spend” to 40-year-olds who completely refuse to work.
But one of the most recent guests on his show, Financial Audit, may have been the host's most frustrating one ever.
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Racso, a 24-year-old Vedic astrologer from Austin, Texas, had lost an immense amount of money trading cryptocurrencies and now finances his lifestyle with credit cards.
Getting a regular job, he explained, is just a “worst-case scenario,” but Hammer believes Racso's current situation couldn't get any worse.
“I’m almost ready to throw you out,” he told him. “This is the most anger I’ve ever experienced.”
From “half a million” to broke
Racso started trading cryptocurrencies in 2020 with $40,000. He eventually made $440,000 out of it. Unfortunately, his day trading was fueled by massive leverage up to 17x his equity.
That's excessive by conventional standards, but not uncommon in the cryptocurrency industry, where platforms can offer leverage ratios as high as 125. However, excessive borrowing is a double-edged sword, as Racso eventually discovered.
He said he lost 70% of his portfolio when trading platform FTX and cryptocurrency Terra/Luna collapsed in 2022. Based on his own analysis using Vedic astrology (which focuses on karma over personality traits), the events that happened to Rocso were driven by the “Taurus and Scorpion Eclipse.”
The Bank of International Settlements (BIS) estimated that the collapse of the Terra/Luna project wiped out more than $450 billion in market value, while FTX's bankruptcy wiped out another $200 billion.
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Overall, the cryptocurrency industry lost $1.8 trillion this year, causing three-quarters of retail investors (40% of them men under 35) to suffer significant losses.
Undeterred by his failure to predict this market collapse, Racso now believes he can make a living as a Vedic astrologer by predicting the fate of others. However, he admitted that he is currently not earning any income.
His portfolio is now limited to just a few cents, so his monthly budget is financed by credit cards.
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Unsustainable debt
Racso has multiple cards, some with outstanding balances of up to $4,373, and he admitted to using some of them to repay others. Even his rent is paid with credit cards since he can only make the minimum monthly payments.
He also has a car loan for partial ownership of a car he shares with his sister.
Consumer debt is a more persistent trend than cryptocurrency speculation. Non-housing debt reached $4.9 trillion by the end of 2023, according to the Fed's latest household debt and credit report. Credit cards alone account for $1.13 trillion in total American debt. Car loans now outweigh student debt.
Racso justified his car loan by saying he wanted to generate income from ride-sharing with his car. Although he's signed up, he hasn't started offering rides yet. Due to his lack of income and monthly debt payments, he only has $2 left in his checking account.
Hammer simply described him as a “ridiculous clown.”
However, Racso's situation, as dire as it may be, could potentially be saved by a solid source of income, tighter monthly budgets, and weaning himself off credit card addiction. The only problem is that if he wants to overcome them, he must first admit the problems to himself.
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This article is for informational purposes only and should not be construed as advice. The provision is made without any guarantee.