What Poor People Don't Know About Money
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- เผยแพร่เมื่อ 30 ก.ย. 2024
- What Poor People don’t know about money
1st Money is Time/Energy
Two things need to be done:
- Take money seriously
- Earn the most per house possible
Wages are for making money not for seeking happiness, don’t believe the lie that your job will make you happy, it doesn’t
- Job is for security in the future with pension
- Today its job is happiness
- It's not its about making money
When you understand how serious this is, you stop acting like spending money on things you need is not a big deal, you start taking things seriously
⁃ If you are looking into a car that costs $30,000
⁃ And you make $20 an hour
⁃ $1,500 hours gone or 187 days
⁃ Iphone close to 7 days
⁃ A $2,000 dollar vacation is 14 days of your life
- When you look at money this way you try to get the most out of money
What do you do?
⁃ If money is time and you can’t get time back
⁃ Take your time seriously
⁃ Spend Less than you make
⁃ Save and Invest
Book: Your money or your life
2nd Investing is Simple but not Easy
How to Invest
⁃ Live on less than you make: so you can have a surplus and invest that
⁃ I would invest into a The S&P 500 or a target date mutual fund by Vanguard
⁃ You can expect to make 8% on your money over the long run
Math:
⁃ If you start at age 25 and invest $1000 and $300 each month for 10 years ( less than 10% of the average US salary per month )
⁃ You would have $58,000 ( people would say, 10 years and that’s all I have to show for it ? )
⁃ Keep investing for another 30 years until you turn 65 years old
⁃ You would have 1M dollars, by simply putting aside around 8% of your monthly income
Book: Common Sense Investing by John C bogle
3rd Debt is a Dangerous Tool
⁃ First I want to establish if you don’t own something paid out in cash, you don’t own it
⁃ If you don’t believe me, look into the 1930s stock market crash after the roaring 20s
Today:
⁃ I don’t have a single credit card, not one
⁃ I don’t owe anyone money ( just the government, taxes you know )
Before you say: that’s not possible?
⁃ If you want to buy a home, you can save 10 or 20% for a downpayment, buy on a 15 years mortgage where the house expenses are no more than 33% of your net income
⁃ And you can pay it off quickly
Book: The Barefoot Investor
4th: The Joy of Money is in Spending it
Here is the truth about the average millionaire in America:
⁃ The most popular cars among them is the Ford F-150
⁃ They live in modest homes
⁃ And they spend a life ( living on less than they make )
⁃ They find happiness in simplicity ( like eating tacos and going to your favorite restaurant )
Actions:
⁃ The happy part about financial freedom
⁃ Which is making more passive income than you need to live
⁃ Is that you can spend on the things you really care about
⁃ If all you care about are things, you need to reevaluate yourself
Book: The Millionaire Next door
5th More Money in incapable hands will not change your circumstance
This is important:
⁃ You’re not poor because you make less than 100k per year or 1million per year
⁃ You are poor because you spend more than you make
⁃ And you have little to show for your income
Here is an example:
⁃ A lawyer makes over 200k a year, lives in Manhattan paying rent, drives a BMW and buy fancy suites ( he has about $10,000 In his checking and a lot of debt )
⁃ If he doesn’t get paid this month, he goes under and is in trouble ( he is poor )
⁃ An office worker makes $40,000 a year, he spends most of his money on rent, car loan, and going n vacation and also buys a lot of stuff on credit ( he is broke )
⁃ You see many men with capable incomes are broke and many men with average incomes are rich
⁃ Its not an income problem only, its a capability problem
Book: The Richest man in Babylon
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Here is some embarrasing math i want to share with you guys. When I was making $8.75 an hour, here were some of my purchases and how time they cost me
Sneakers:
- Price: $200
- Time: 22 hours of my time
Playstation 4:
- Price: $300
- Time I spent Playing: 2 hours daily ( $350 per month )
- Cost of Time Per Year: 514 hours of my life
Commute:
- 3 hours Daily
- $26.25 per day
What I learned was, material things are often not worth the money and minimum wage works is terrible and should not be done long term.
I love looking normal I blend in with the regular middle class people who are not wearing anything fancy. I drive a toyota highlander I love it and its going to be paid off on October 9. I dont have anything flashy like jewelry but my investments are stacking in the background. Soon enough I will have my small 0 % interest debt paid off in Q1 of 2025.
This ✨
Step by step 😎🙏
Haven’t seen you in while❤Im 61 and really enjoy your content 🙏🏾
welcome back!!
I see the new look. I'm assuming you're doing an experiment?
Yup, should be revealing sooner than later
You are so right. I added a third job to my life a few months ago, really for no reason. I was miserable, I felt so much better when I quit. Work-life balance is very important.
Yeah, sometimes it's best to level up skills than just add more work to trade for time. Example, learning a new skill on the side, while working normal hours.
In a few months or year or two, you can quit that one and get paid more for your time somewhere else.
Ism really loved your content it make sense to me thanks for sharing keep up good work.
That's the goal, that it makes sense and you can understand it. 😎
Been watching your shows for a long time... Didn't recognize you bro, but that's a great thing...
lol thanks bro, time flies
If we have to pay taxes on a home do we really own it or are we just renting the land under the home?
No one truly owns anything, but that's not an excuse to not try. One day we will all die, we don't even own our bodies....it will go back to earth when you pass
We own it but we all have an agreement that we have to pay taxes. In a way it's a good thing, if you ever come to a country where that isn't done, you see alot of issues with social works. Taxes are appropriate in some ways
Yes! You CAN buy a house for 💯 cash. It may be a fixer upper but yes you can do so. You can live in it as you are fixing it.
I thought I was gonna lose my time on this video. Thank you for the value
glad to hear that
Thank you. I like your long format videos
Glad you like them! More on the way
This is huge time is your most valuable asset no matter what
Exactly. Getting minimum wage for it is not good, and getting more money that we need is so not good. Time for money is never an even trade, just one we have to make
Tommy looks different every video
Lol seems like it for sure but it's me not a clone
👍Excellent! I've been away for awhile BUT I see your maturity Growth! Your content educational and informative! I agree💯 Its NOT your car when the repo man comes Its NOT your home just cause you dont rent In my opinion spending money does not give you freedom but debt! Broke people care what people think Impressing
Rich people spend quietly modest without being flashy with spotlight attention I dress down No debt to my name Retire early June 2021 Now 56 Paid my dues 30 years Emergency fund 10K credit card BUT balance 2% Live a quiet simple modest life Wake up with purpose direction with a PLAN! Freedom is having money available when you need it!
Very nice 😎 Only thing we are different on is keeping the credit card as you know.
That's what it's all about, living below your means, so you actually "Live".
Great job hermano!!
Gracias Brother
I genuinely want to know this,
I’m almost debt free & im also military retired at 27 so I don’t have to work anymore for the rest of my life. The thing I’m conflicted on is when it comes to paying a car off, what if you get into a car accident & the car you invested so much in is now totaled….how do I make my money work for me around this. This is why I never rushed to paying off cars I invested in
first, cars are not investments, they are like stoves and toaster, we buy them for utility not to make money back. Second, its why its so important to buy used cars that are reliable at a good discount of 50-60% off MSRP. Third, you have insurance.
Example:
2019 Toyota Rav4 Retail was 29.5k
Today: 20k you can buy one (33% off)
You Drive the Car and take care of it until it cost more money to repair it than the value of the car.
If you get into an accident, you should have insurance, to help with some of the cost, then you just buy another one. The cheapest was to own a car is to buy used, and drive it for as long as possible
You look way better w a beard
Whenever we talk about the house situation I think I may just rent and invest like a mad man.
You have to be careful with that idea, you have to think about also potential job loss and investments loosing value.
Here is an example:
- You work and invest the bulk of your money
- if you lose your job and the market crashes at the same time. You'll be in trouble because you'll still be responsible for rent payments.
I see two solutions for this issue, well three. One is to have some money in good quality bonds, second to have some cash on hand and third having a paid off home to lower the overhead of living.
they dont give 8% its usually 2.3-4%.
S&p historically averages about 8%
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40 min video nice
Thanks, wanted to pack it with value
@@TommyBryson I am all for the longer form videos that way I can get some knowledge while I multi task.
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thanks brother