5 HACKS To Save A LOT Of Money FAST

chances are you're paying for something that you're not even using the federal reserve bank isn't a bank the longer you let your money sit there and invest and compound the more your money is going to be able to grow now i make money by talking about how i was supposed to be a doctor what's up everybody i am just playing singh from the minoritymindset.com where money minds rethink rich saving money is not fun i mean when you save money you have to earn money and then you take a piece of it and you do nothing with it but it is very important for a healthy financial lifestyle because you need to know how to save some money for investments you need to know how to save money for emergencies and need to know how to save money for a big purchase and in this video i'll put together some of our best clips that will help you save money quickly so let's get into it i grew up in a traditional indian household my parents are immigrants from a state in india called punjab and they're some of the hardest working people that i know but since i was a kid they always taught me the importance of working hard being honest and becoming successful now i don't know how it is for you but in any indian house the definition of success is very simple it comes down to a very simple equation success equals being a doctor if you become a doctor you are by default successful if you go out and you ask any indian mom out there the solution to becoming successful at anything is by becoming a doctor if you want to make a lot of money be a doctor you want to be happy be a doctor you want to be healthy be a doctor you want to get married be a doctor but now if we dive a little bit deeper and we define what the success is as financial success now things look a little bit different now i know there's a lot of different definitions of success out there being happy having a good family being physically healthy being mentally healthy having a purpose but for the purpose of this video i'm going to be talking about financial success so now if the goal is to become financially successful or wealthy or rich or whatever you want to call it if the goal is to become financially successful is the solution to become a doctor well becoming a doctor teaches you how to diagnose a sick person how to take care of a sick person how to do a lot of things if i was sick i would pay a doctor a lot of money to treat me but being a doctor doesn't necessarily mean that you're going to be financially successful being a doctor means you are qualified to treat other people at this point every indian mom watching this video is saying oh just pretty saying that because he's not smart enough to be a doctor and yeah that might be the case but if you want financial success the solution is to be financially educated because if you're financially educated then you have the resources and the knowledge to use your money to become financially successful this is how the majority of people probably something like ninety percent of the population manage their money first you make money from your job you get a paycheck this could be twenty thousand dollars a year or two million dollars a year it doesn't matter how much money you make you make money from your job and the first thing you do is you put this money in your bank account and then you start spending this money so you got your home expenses you got to pay for your car you got to go buy some clothes you go on a vacation you spend some money and then if that's why i got this dotted line here if there's any money left over you save this money now some of you might be better than others at saving you might not spend too much money that way you can save more money but for the majority of people this is how their finances look you make money then you spend a lot of it and if there's anything left over some of that money gets saved if you're wondering oh just breathe how do you know how people manage their money well just look at the numbers one in five americans do not have five thousand dollars saved up for retirement and seven out of ten americans the majority of americans don't have one thousand dollars in cash saved up to protect them from an emergency what the minority people do is they start by smashing the thumbs up button below because of where the youtube algorithm works if you do not smash the thumbs up button then youtube is much less likely to show you and other people our financial news and education videos so if you hit that button i will very much appreciate it but what the minority people do is first they get paid so let's assume for this example that you're getting paid from a paycheck again now i'm gonna go right to left this time this time they start by saving money so you put some money aside for your savings first and then you invest some money so you put some money aside then you put some money to work for you and after you save and after you invest that's when you spend so it's a different order of events the difference here is the majority of people make money they spend their money and then if there's any money left that's when they save it and that's when they invest it wealthy people the one percent what they do is you make money and then you save it and you invest it first and then you only spend what's left after saving and investing because investing and saving is going to build your wealth investing is going to build your wealth even more savings just really protecting your wealth but you need to do these two things first that way you can build your wealth the simplest way to do this is to create a financial system one of the things you can do is to follow our 75 15 10 plan what that means is for every dollar you earn here so you make one dollar from your paycheck or your business or however you make your money every time you make a dollar it's going to flow down in this way out of this dollar 75 cents is the maximum you can spend 15 cents is the minimum you should invest and 10 cents is the minimum you should save when you do this now you're investing and saving your money and building your wealth first before you spend your money now if you're younger and you don't have a ton of financial responsibilities then this is your time to build what you should be doing is following our 50 30 20 plan that means now you're spending less money you're only spending 50 cents out of every dollar you earn but you're investing 30 cents and you're saving 20 cents because now this is your opportunity to build if you don't have a ton of expenses then invest and save more aggressively now that way you can build the foundation for your financial wealth this is where a lot of people put up a smoke screen they say oh you shouldn't worry about money like that money doesn't matter you should just work on being happy and yeah you need to be happy but money is a tool okay if you are a good person money will give you a tool to do more good if you are a bad person that money gives you a tool to do more bad the size of your paycheck matters but it's not going to determine whether you're going to become wealthy or not it's what you do with the money you make because if you make two hundred thousand dollars a year and now you're spending two hundred thousand or you're spending 220 000 with credit cards and loans well you're broke but if you make 30 000 a year and you're saving 10 and you're saving 15 you are setting yourself up for wealth but now in order to build that financial foundation there's five other things that i need you to do i'm gonna be talking about these five things first you gotta track your money you gotta know where every dollar you're earning is going then you need to build a financial shield to protect yourself then you gotta stop bleeding cash then you got to put your money to work that way your money can make you money and then you got to put fuel on the fire to amplify the system that way you can build your wealth even faster first you got to know where your money is going because if you don't know where your money is going then it is going to disappear so you need to track how much money you're making and where your money is going how much money you're spending where you're spending it how much you're investing and how much you're saving you need to have a track of all your money and this is something that you need to do every month even if you're not a financial person you don't like talking about money this doesn't have to be too hard there's a ton of free apps out there that you can use to help track your money and help monitor your money i'm kind of old school i just use an excel sheet i've kind of built my own performa and my own kind of system where in the beginning of every month i write down all my excel sheets how much money i made and where all my money went because if you don't know where your money is going it is going to disappear in the business world what we say is if you can't track it you can't optimize it because if you don't know how well the system's running you can't improve that system well it's the exact same with your money if you don't know where all your money is going you can't improve where your money is going you can't improve your wealth because you have nowhere to see how your money is being spent once you start writing down where your money is going the second thing you need to do is build a financial shield because you need savings right now the vast majority of americans don't have a thousand dollars saved up but the reality is sometimes life happens and emergencies happen and you need cash to cover that emergency because if you don't have cash then now you got to go into credit card debt which is very expensive or you got to get a payday loan or you got to get a hard money loan and in all of these situations you are getting skinned alive by the lender and i don't want you to do that which is why you need to start saving some cash that way you have a financial shield to protect you from emergencies in general your goal should be to save something like three to six months worth of expenses in your savings account now this savings money is not money that you're going to use for a down payment on a house it's not money that you're going to use to go buy a nice car it's not money you're gonna use to buy a new cell phone this money is just sitting there to protect you from an emergency that way you don't have to go into credit card debt when an emergency happens so this should be a base goal three to six months worth of savings but if you really want to protect yourself and you want to be really risk adverse then you should have something like 12 months worth of expenses saved you don't really want to have too much more than that because saving money is losing money your savings accounts are not paying that much interest yet at the same time inflation is two or three percent a year what that means is the price of things the price of living is going up by two or three percent a year while your savings are just sitting there flat so if your savings aren't growing but the price of everything else around you keeps going up by two or three percent a year that means your savings are essentially losing value each and every day which is why yeah you need savings to protect you but you don't want to save all your cash because your goal should be to build your wealth and i'm gonna talk about that in just a second if you're subscribed to our youtube channel you know that i love using my credit card to make transactions because anytime i use a credit card i get cash back i get points and i never carry any interest because i pay off my entire credit card balance in full every single month that way i get the perks and the rewards from the credit card company and i don't pay them any additional money in interest but a lot of people right now are getting skinned alive by the credit card companies because they're spending money on extra guac that they can't afford and now you're having to pay 15 16 17 18 interest on that extra guac which is skinning you alive and so what you need to do right now is stop bleeding cash you know it's always kind of funny to think about this because we talk a lot about investing on a youtube channel and i'll talk about okay if you get a 7 return on your money this is what will happen or if you get a 10 return on your money this is what will happen and every single time i do that people will leave comments saying things like or where am i supposed to get a consistent 10 return but at the same time do you want to know somebody who is getting a consistent 19 return every single year your credit card company and you are the one paying it if you have credit card debt let me show you what i mean so i was reading on a nerd wallet article that many americans are taking more than 10 years to pay off their credit card debt so if your credit card company is charging you 19 a year what would happen if you invested that money and got a 19 return on your money if you could invest a thousand dollars a month and let's say you can get a 19 return on your money every single year now i know it's not very easy to get a 19 return every single year but your credit card company is doing it so if you invest a thousand dollars a month and you can get a 19 return on your money every single year and you do this for 10 years which is what a lot of people are taking to pay off their credit card debt this 1 000 a month investment would grow to over 420 dollars over those ten years if you could get the same 19 return on your money well your credit card is getting a 19 return on your money and so your credit card is becoming wealthy because of you while you are staying broke so what you need to do right now is you need to stop bleeding cash because you need to pay off your credit card debt as fast as possible credit cards are a tool if you know how to use them and you know how to use your money you can get a bunch of free perks you can get a bunch of cash back for doing nothing except making your regular transactions with a credit card if you don't know how to use a credit card then you are being skimmed alive by a credit card company and you need to stop bleeding cash and you need to get rid of your credit card until you can figure out how to control your spending and right now you need to get out of credit card debt as fast as possible that means cut your expenses work harder at your job get a raise do whatever you got to do find some extra cash and put it towards your credit card debt because you got to stop bleeding cash as fast as possible because this is eating away at your wealth once you get here to number four this is where things get really fun because now you're putting money to work you can only work 10 12 14 maybe 16 hours a day consistently i mean yeah maybe some days you can work 20 22 hours a day but you can't do that consistently okay you're gonna get burned out but your money doesn't need sleep your money doesn't need to go to the bathroom your money doesn't need a vacation your money can work for you 24 hours a day seven days a week including holidays which is why once you got this extra cash you need to put it to work that way your money can earn you more money because you need your money working for you while you're sleeping this is what investing is all about you're sending your money out that way your money can attract you more money lots of people assume that putting your money to work and investing means that you have to throw your money in the stock market but that's not the only way that you can invest your money and it depends on what your risk tolerance is one of the simplest and easiest and the least risky ways to invest your money is just by paying down your debt if you have student loans that are costing you six percent a year in interest and you pay it off a year early well now you just got a six percent guaranteed return on your money for the year because now you don't have to pay six percent of interest to the bank or your lender that six percent is what you get to keep in your pocket because you paid off your student loans a year earlier this doesn't have really any risk because if you pay down your debt early that's interest that you don't have to pay you should also be investing in yourself and your own mind because like everybody says you are your own best investment if you know how to use your money better you can use your money better and get a better return on your money now this takes time and it takes money but this can be one of the most valuable things that you do because if you don't know how to invest your money then you're not going to be able to get the best returns so this could mean reading books it could mean taking classes online it could mean going to seminars whatever it is you need to be investing in your education especially your financial education if you want to know how to use your money the right way that way you can get the best returns on your money the other kind of education is financial tuition and financial tuition is when you lose money by making a bad investment i'm a real estate investor and i have read a ton of books on real estate investing but some of the best real estate investing knowledge i got was by investing in a property which i called my nightmare property where i lost a ton of money it was my education it was the financial tuition i had to pay to learn how to be a good real estate investor because there's just some things that you can't learn in books there's just some things that you can't learn in courses so that's another kind of education where you just go out and do things because there will be times when you lose money that's just reality by the way if you do want to learn more about my worst real estate deal ever it was a nightmare property you know i read a lot of books that say you know every real estate investor has one really bad deal this is mine so i want you guys to learn from my mistakes this is not something to teach you in business books or even something to talk about in real estate books so i want you guys to learn from my mistakes you don't make the same mistakes as i did because it was very expensive let's take a look inside i walked through that deal on youtube and if you want to watch that video i will also link it for you in the description below then you have investing in assets this is your more traditional type of investing because now we're talking about investing in the stock market or investing in real estate now you're really just putting your money to work that way your money can attract you more money the way it works is now you're buying an asset you're buying an investment for the purpose of making money because you're buying something that you think will go up in value so if you buy a stock for 100 a share and then this company starts to make more money and the value of your stock goes to 200 a share now you just doubled your money you can also put your money to work for passive income because now certain stocks pay dividends what dividends are are cash payments is passive income that you get just for owning a stock that pays a dividend it's the same with real estate if you buy a home you can rent out this home for a thousand dollars a month and now every single month your tenants are gonna pay you a thousand dollars a month for living in your property and now even if you're sitting on a beach somewhere you're still getting a thousand dollars a month every single month from your tenants that are living in your property and you don't have to do any of the work because you put your money to work you use your money to buy an asset to buy this house and now your money through this asset is generating you passive income and the best part of all is now you're creating a new income stream that you're earning without having to physically go to work because now if you have income coming in from your stocks or if you have income coming in from your real estate this is money that you're getting without you going to your job now let me give you a quick disclaimer here because there's a lot of kind of misconceptions out there about passive income and investing with a lot of people on the internet saying oh you can become a millionaire overnight by just throwing your money in stocks or by throwing your money in real estate well it doesn't really work like that it is a slow gradual wealth building process where the more money you put in the better returns you will generally see and the more time you have the more money you will make now before we get into number five i do want to let you know where you can learn more about investing because our team puts out tons of articles on how to invest your money and build wealth through stocks and real estate on our website the minoritymindset.com and i'll also link an article for you up here and in the description below and that's when we come to number five putting fuel on the fire where now you understand how to use your money and now it's time to earn more money because you know how to grow your money even bigger the reason i talk about this now not earlier is because a lot of people think that the solution to their money problems is just earning more money but there's a little problem with that if you don't know how to manage your money with forty thousand dollars a year you're not gonna know how to manage your money suddenly at four hundred thousand dollars a year or even four million dollars a year that's why seventy percent of lottery winners become broke or bankrupt within just five years of winning the lottery and that's why 78 of nfl players who make a ton of money while they're playing in the nfl end up broke or bankrupt within just two years of retiring from the nfl making more money does you no good unless you know how to use your money first that's why once you know how to use your money it's all about putting fuel on the fire because now you have a financial system you've built your savings cushion you're no longer bleeding cash and now you're putting your money to work once you do that it's all about amplifying the system by earning more money and putting fuel on the fire the way you do this is going to depend on you for some of you that might mean asking for a raise or working to get a promotion something where you can get more money from your job for others of you maybe you're working a job but you also really like baking cakes if that's the case now you can start a side hustle where on the weekends you're baking cakes and you're selling it to your friends and your neighbors and other people that like your cake and for others of you you might have an entrepreneurial bug where you just really want to start a business the whole purpose here is now when you make more money you don't just go out and buy a fancy car you follow your financial system you're going 75 15 10 or you're going 50 30 20. whenever you make more money you're just take in that money and you're putting it into your funnel that way you're investing more money you're saving your money until you have the savings cushion built up and then you're spending a little bit more money the whole purpose of all of this is to manage your money in a way where you're paying yourself and you're building your wealth first before you go out and spend all your money and make all those companies around you rich before we get into the next clip if you are interested in learning more about how you can manage your money the right way that we can build wealth have a financial system and invest your money our team put together an amazing guide that walks you through how to do this you can download this guide for free when you sign up for our daily newsletter and you can do that by clicking the link up here or by clicking the link in the description below americans are not saving enough money just 40 of americans have the means to protect them from an emergency like a leaky roof or needing to replace their tires which means 60 of americans the majority of america does not have the cash necessary to protect them from a leaky roof or having to replace the car tires without going into credit card debt or having to go to the bank and having to borrow money now there's a lot more to becoming wealthy than just living smaller and cutting back expenses and saving your money and being cheap i actually just made a video on youtube where i talked about if being cheap can make you rich so if you want to learn more about that i will link that video for you in the description below and also for you up here but you got to know how to take the first step that way you can build your financial base that way you can have some cash in the bank and you know what it really doesn't have to be as burdensome as just never spending any money and never having any fun if you know how to save your money the right way which is why in this video i'm gonna be going over 10 ways that you can save a thousand dollars quickly but before we get into that i need you to do me a quick favor and smash that thumbs up button below because the way the youtube algorithm works if you do not smash the thumbs up button then youtube is much less likely to show you and other people our financial news and education videos and i'm gonna start by talking about why you need to review your bills i'm a gym person i love working out and my gym membership cost me seven dollars a month to work out at my gym but i noticed on my credit card statements that my gym membership wasn't charging me seventy dollars a month they were charging me 75 a month and so i got kind of curious what is this extra five dollars for so i called up the gym and they said that they signed me up for a magazine that i never knew that i signed up for and that's why they were charging me an extra five dollars a month now i've had my gym membership for years and i'll probably continue to have my gym membership for many years into the future and they were just slapping on this five dollar fee because they probably thought no one's gonna check their bills now an extra five dollars a month isn't really gonna change my life i mean maybe i guess i could afford another side of extra guac but i'll get to that in a little bit the whole idea here is you got to figure out what you need and you got to see what you're paying for chances are if you pull out your credit card statement and you go through all your bills you're going to find that you have subscription services that you do not need anymore and you're gonna find that you're paying for things that you don't use the simplest way that you can start saving some money is just stop paying for the things that you're not using anymore because chances are you're paying for something that you're not even using and when it comes to the things that you are using like a gym membership make sure you're only paying for what you use like if you got a gym membership make sure you're only paying for the gym membership and not some magazine that you've never read in your life second you got to know the true cost of what you're buying if you go to the mall and you buy yourself a nice 150 jacket what is the true cost of your jacket so many of you might be thinking at this point that if you bought a 150 jacket the true cost is 150 dollars but that's not the full story yeah you paid 150 dollars but i want you to really know what it cost you to get the 150 so let's say you make 20 an hour so if you make 20 an hour how long did it take you to make this 150 that would be what five six seven seven and a half hours of work to get this 150 jacket but this is actually before taxes because remember uncle sam's got to take their cut with the irs so after taxes is actually going to cost you nine and a half hours of time to buy this jacket would you rather have the jacket or would you rather have nine and a half hours of time this is almost always one of the first calculations i have in my mind because i always want to know how much time is this thing going to cost me that i want to buy now i get it you can have passive investments that pay you without you having to physically work but you got to know how much your time is worth and if you know that then you can calculate how much time this thing is going to cost you and then you can really ask yourself do i want to spend this money on this jacket so now you know that the true cost of your jacket isn't just 150 it's almost 10 hours of your time but the second thing you need to ask yourself when it comes to the true cost is what would this jacket be worth in the future if you didn't buy a jacket because what i want to know is if i didn't buy this jacket and i invested this money what would this money have become because if i invested 150 this 150 in 10 years would be worth not 150 but 300 dollars and in 20 years this money that i would have spent on my jacket wouldn't be 150 it would be about 600 and in 30 years there's 150 that i spent on my jacket would have become more than 1.1 000 if i had just invested the money so now the real cost of this jacket isn't 150 it is almost 10 hours of my time and it is the opportunity to make eleven hundred dollars over the next thirty years now you can ask yourself do i really wanna spend 150 on the jacket now uh too late i already got it just [Music] one of the easiest ways to save money quickly is just to not spend our money but the tough part about that is when we want something we want it right now and so what i want you to do is just take a step back before you go out and you buy that jacket on impulse or before you go and you buy something that you don't need just take a step back and ask yourself what is the true cost how much time would it cost you to actually get that and how much money is this going to cost you over the long run once you do that i want you to follow the 24 hour rule which says you want to buy something great now just take a step back wait 24 hours and then decide if you really want to buy it if you still want to buy it and you do these calculations then go out and buy it but if after those 24 hours you thought about how much time is going to cost you and you thought of how much money you're losing out of in the future and now you decided not to buy it well now you just save some cash by not spending it third let's talk about eating out and drinking out because there's a huge debate in the financial world about coffee you have people like susie orman who say that you going out and drinking starbucks is one of the dumbest things that you can do with your money and then you have people like ramit sethi who say the opposite he says that it doesn't matter if you spend five dollars at starbucks because five dollars is just five dollars it's not going to make a difference and then you have people like graham stefan who popularized the 20 cent coffee because he makes his coffee at home now honestly i can't relate to any of that because i don't like coffee coffee tastes like poo poo i don't drink coffee i drink tea if you go out to costco and you buy the big pack of green tea it's going to cost you something like 24 cents to drink one glass of tea now personally i'm a big fan of nice teas because there's a difference between your kind of lower quality teas and your nicer teas if you want a nice cup of tea it is going to cost you somewhere between 35 cents to 50 cents if you make it at home if you go out and you buy the same tea from a nice tea shop it is gonna cost you at a very minimum a very minimum of three dollars and fifty cents so clearly if you went out and you made your tea yourself you're gonna save three dollars every time you make your tea at home but let's also talk about the food if you subscribe to our youtube channel you know that i love food and more specifically you know that i love guac now if i go out and i go to target and i buy an avocado right now it is gonna cost me something like 89 cents okay if i go out and i buy this avocado so i'm gonna draw you an avocado that looks more like a cookie than an avocado but if i paid 89 cents for this avocado i can make four sides of guac okay now if you're like me and you really like guac maybe this is just gonna make you one side one avocado one side but let's assume that you can make four sides of guac from this one avocado that means if you eat your guac at home you are going to be paying somewhere between 25 cents i'm gonna round up here to 89 cents for your side of guac 89 cents if you're someone like me who wants to eat the whole avocado 25 cents if you only want to eat a fourth of that okay you're gonna be paying less than a dollar if you want to get your guac but if you go to the store if you go to a restaurant and you want to get a side of guac it is gonna cost you at least three dollars for a small side of guac and you're barely gonna get a quarter's worth of guacamole if you just make a nice tea at home and i don't know about coffee but tea is very easy to make at home all you gotta do is warm up some water and put some tea leaves in there or put a tea packet in there it is very easy you don't need any fancy equipment so if you just make your tea at home and eat your avocado at home you're gonna save six dollars between the two now if you do this five times a week like many people do 52 weeks a year you are going to save 1500 over the course of a year just by eating your avocados at home and just by making your tea at home this is where i wanna give you a little disclaimer because you know what i like tea and sometimes i do like drinking in a tea shop i'm not one of those people who says i never go out to the tea shop and drink tea i like to have a lot of meetings over tea i don't go to the bar i don't drink i don't do things like that but i do like tea and i have a lot of meetings over tea so sometimes for the experience i will go out and i will drink this tea but when it comes to my daily tea i don't drink tea every single day but when it comes to my regular general tea then i'm just gonna make it at home and i'm not going to the tea shop every morning to get my morning tea this is where i want you to draw a line between consumption and enjoyment if you're just going to the tea shop every morning to drink your tea and you're just putting extra guac in your lunch because you like guacamole you are blowing money on things that you don't need but if you're going out to hang out with your friends because you want to drink some tea together and have a good time sure go out and pay three dollars and fifty cents for a tea that's okay but spending this money every single morning just because you don't want to brew it at home that's a different story it is okay to go out and have a cup of tea with your friends or go out to a restaurant once in a while but it is different when you are talking about doing it every single day just because that's what you think is normal because you want to go out and you want to eat a burrito and you want to get extra guac every single day by the way if you are eating in restaurants just drink water you are going to save a ton of money just by drinking water instead of ordering a coke one thing that i learned growing up in the indian household is that everything is negotiable if you're in india and you go and you buy yourself some apples you're gonna negotiate the price of that if you go out and you buy yourself a new shirt you're gonna negotiate the price of that okay almost everything is negotiable if you ask worst case they just tell you no one of the simplest and least painful ways to spend less money every single month is just to negotiate your bills lower so what i want you to do is start by taking all of your utility bills so your cable bill your internet bill your phone bills take these bills and now look at what your competitors are charging chances are that the competitors to the companies you have have some lower introductory rates out there right now now what i want you to do is try to get the bill that you're paying right now down to your competitors lower introductory rates that way you're getting the same service at a lower price so you're literally just saving money for doing nothing except making a 15-minute phone call the way you do that is you're gonna call up the customer service number on your statement and they're gonna say hi i was wondering if there's anything you could do about my bill because i feel like it's really high now they're gonna say either yes we can bring it down a little bit or they're gonna say no there's nothing we can do no matter what they say even if they agree to lower your bill i want you to push them lower what you're gonna say is oh really okay i saw that your competitor so and so was charging only 25 a month is there any way you can match or beat that i'd really like to stay with your company now what you just did is you suddenly put it in their head that you are considering leaving because their competitor is charging a lower fee no company wants to lose a good paying customer to their competitor especially if you've been there for a long time so now what they're going to do is they're going to seriously see if they can bring your bill lower if they don't bring your bill lower or they don't bring it low enough that's when you want to ask to speak with the manager because managers typically have more negotiating room the key here for any of this to work is you need to be nice because customer service agents are going to yell that all day long by people complaining about their bills if you are nice to them they will be nice to you this should go for any big purchase you want to make your home even if you're leasing your home you can negotiate the price and release your car anytime you make a big purchase make sure you negotiate it first fifth i want you to move your savings and that means two different things as soon as you get paid i want you to automatically move some money from your checking account where your money goes into to a savings account that way you can't accidentally spend the money because sometimes we feel that if we have cash in the bank we should spend it well if that money automatically leaves before you can touch it now you're not going to have the urge to spend it because you're not going to see that money so anytime you get paid you need to automatically move some of your money to a savings account that way you can't accidentally spend it on a new tv second i want you to consider moving your savings account to an online bank that pays you a higher interest rate than a traditional bank because if your money is saved at a traditional bank chances are they are paying you next to nothing if you move your money to an online bank you should be able to get a much better return because online banks have lower fees they don't have the same overhead and all the rent costs because they don't have those retail banks everywhere so because they have lower fees they can pay you a higher interest now this higher interest is not going to substitute an investment and it's not going to make you rich but if you're saving your money anyways you might as well get a better return on your savings that's what i do with my savings i know that my savings are not doing anything except sitting there collecting dust so i move my savings to an online bank that way i can at least get some interest and get some money for my savings because it's just sitting there doing nothing anyways and if you do want to learn more about how you can save your money and get a better return at an online bank our team has written an article on this on our website the minoritymindset.com and i'll also link this article for you up here and in the description below sixth i need you to start shopping around for the right things because when i say shop around i don't mean shopping around for a new gucci scarf i mean shopping around for the services that you can save some money on your insurance so this is your health insurance your home insurance your car insurance all the different insurances that you have your phone bill your cable bill and your internet bill i need you to shop around for these four things every single year because chances are these companies are going to raise your bill every single year and so you want to make sure you're getting the best rate because if you just stick with one company because you don't want to shop around you are going to get ripped off so every year i want you to spend just half an hour shopping around that way you can make sure you're getting the best deal possible you can even negotiate the price of a bit lower like i just talked about but you want to make sure that you're not overpaying because this is a simple way to save a ton of money seventh we all have things that are sitting there in a house that aren't doing anything like when i graduated law school i had a ton of books in my room that were just taking up space and collecting dust so i went out and i sold a bunch of my textbooks and i made like 400 just selling the textbooks that were doing nothing except taking up space we all have things in our homes that we're not using that are just taking up space and collecting dust what i want you to do is take the things that you do not need and take them and sell them your kids clothes your old furniture your old phone your old tv your old electronics all these things have some value and you can go out and you can turn these old things that are collecting dust into some cash if you just spend the time to go out and sell them eight pay your stuff on time so this is one of my pet peeves i cannot stand paying late fees because when you pay for a late fee you are paying for something that you're getting no value for like when you pay a 25 late fee you were getting no extra value you just forgot to pay the bill and americans on average are paying 250 a year in late fees alone that's 250 dollars that you're spending on something that's giving you no value and no return if you just want to throw your money in the garbage you might as well just mail it to me avoid paying late fees at all costs put it in your calendar use auto pay set reminders do whatever you got to do that way you don't have to pay a 25 late fee nine you can use technology to help you save money automatically there are apps out there like honey and piggy i like to use honey and literally as you're checking out if you buy something online honey will come up and they'll tell you oh do you want to save 20 on your order just by using this coupon code yes and so now you just save 20 by doing nothing except having this free extension that helps find you coupon codes to help you save money on purchases online it's the same with using a loyalty program or a cashback program where now you're just saving money by doing nothing except just using one of these free programs that are going to save you money because you use the free program and lastly if you want to save a thousand dollars quickly what i want you to do is next time you buy something i want you to ask yourself would you rather have that sweater you want to buy or whatever it is you're buying or would you rather have cash in your hand if you'd rather make 150 or have 150 instead of having a sweater well then you can just not buy the sweater and keep and fifty dollars because now this is 150 that you get to keep in your pocket because you just didn't spend this money on the sweater now you got to keep the cash and you don't get the sweater but at least you got some cash by the way in case you were wondering i did not pay 150 for the sweater i think i paid like nine or ten dollars for the sweater because i bought it online on clearance [Music] you've probably heard people say things like the fed is printing money out of thin air and the united states is borrowing money like crazy and the value of our dollars are being diluted today i want to go a little bit deeper and talk about how money is created not just from the fed's perspective but how you can create money too yes it is possible this is what every wealthy person knows and understands and if you do not understand how to create money or wealth then you're never going to be able to take advantage of it to understand how you can create money we need to first understand how the fed creates money which i'm going to talk about in just a second but before i do that i need you to do me a quick favor and smash that thumbs up button below in the united states your money your dollars are created through debt and you'll see exactly what i mean so let's say you have a hundred dollars in your pocket and i'm gonna draw you a nice mustache and you deposit this 100 into your bank savings account and then george nancy and bunty all do the same thing they all deposit a hundred dollars into the bank so now the bank has 400 dollars in savings or deposits in their accounts the bank is going to want to make some money off of this 400 they're not just going to keep it in a vault city there collecting dust so what they're gonna do is they're gonna invest this four hundred dollars and the bank is in the business of lending money so now bunty who was over here i put him over here now ponte wants to buy a car and he wants to go to the bank and get a 300 loan so we're gonna assume that cars only cost three hundred dollars in this world so the bank loans bunty three hundred dollars the bank has the money to do that because they have four hundred dollars and now bunty is gonna pay the bank back uh five percent interest or so so bunty is gonna pay the bank back in interest over the next five years but the bank now doesn't have four hundred dollars sitting in their vault they only have one hundred dollars because they just paid out 300 dollars in loans and they're not going to get this 300 back until bunty pays off this entire loan now what the bank is going to do is they're going to pay all of you depositors back a teeny tiny bit of interest because the bank is using your savings to loan it out as an investment your interest is not going to be that much but that's what the bank gives you in order to lend your money out now this situation that i'm showing you right now is not an ideal situation for the bank because the bank is going to run out of money very quickly you have deposited all of your depositors 400 into the bank monty took out 300 for a loan and now the bank is going to run out of money very quickly if nancy and george went to the bank to withdraw their cash because they deposited a hundred dollars into the bank the bank is gonna say oh sorry we don't have the money to give you your money back you're gonna have to wait five years for bunty to repay back all of his loans if that happened you would see mass panic and mass chaos so that's why the system doesn't work like this instead here's what happens so let me clean this up really quickly that way you can see what happens now you nancy george and bunty all deposit a hundred dollars in the bank so now the bank has four hundred dollars but the government says okay bank you are not allowed to lend out all 400 that you have you have to keep some money in reserves so typically it's 10 in reserves so if the bank received 400 that means they're only allowed to have 360 dollars to lend out out of these deposits and they have to keep forty dollars in reserves just in case so if people wanna go get their money back and the bank doesn't always have some cash they have this money in reserves that way they are protected by having a little bit of a safety net and then they use something called the fractional reserve banking system to help them lend out even more money if this was the only money the banks could lend out then banks would be very limited as to how many loans they could make because if they made one or two loans and people started pulling their money out your bank would run out of money and so this fractional reserve banking system was created to help banks lend out even more money by lending out money they don't have to make this fractional reserve banking system work the bank will now go to the fed the federal reserve bank and they're going to say hey fed what can we do to lend out more money and the fed is going to say okay show me how much money you have in deposits 360 okay we will give you 20 x year deposits that way you have more money to loan out so in this situation the fed would give the bank something like 7 000 this way the bank has more money to lend out but the issue here is the federal reserve bank isn't a bank like you can't go there to deposit money they are not a reserve because they don't keep any cash reserves and they're not federal they even say so on their website so if the fed wants to create the seven thousand dollars so your bank has more money to lend out the fed has to create this money literally out of thin air that way your bank has more money to lend out and the way that your bank puts this money back into circulation is not by giving this money to people it's by lending this money out this is why your money is debt because your money is created out of thin air and then it's lent out into the economy that's how it's put into our circulation every time another loan is issued by your bank the fed issues more money creates this money out of thin air and gives it to your bank that way your bank has more money to lend out and that way your bank has more money that way in case somebody went to go withdraw their cash the bank has this cash but this money creation process and this fractional reserve banking process gets even more interesting if you look at how it evolves let's go back to the original example you bunty george nancy all deposit hundred dollars into the bank the bank has four hundred dollars they have to put ten percent in reserves forty dollars they have three hundred and sixty dollars in lendable deposits they go to the fed the fed gives them another seven thousand dollars and then bunty wants to borrow 300 that way he can go and buy a car so now monty's gonna take this fresh new 300 that he just got from the bank that the fed just printed and now is going to take this 300 and he is going to give it to his car company and in exchange the car company is going to give him i'll put this in black the car company is going to give bunty a car and now this car company has 300 and what are they gonna do with that three hundred dollars the car company is gonna take the three hundred dollars and they are gonna deposit it into their bank now bank two just got a fresh new three hundred dollar deposit and they gotta follow the rules they're gonna put aside 10 or 30 dollars in reserves and then they're going to have 270 dollars in lendable deposits but now they're going to follow the same fractional reserve banking system and bank 2 is now going to go to the fed and they're going to say hey fed can you give us some more money so we have more money to lend out and now the fed is going to give bank to about 5 000 right 20 x deposits and now bank 2 has more money that was just created out of thin air because this money was created as debt it was given to bunty bunty went and bought this car this car company put it into their bank and now more money was created and now bank two will have more money more debt that was created that they can lend out as you can see this creates one big cycle of debt more money is borrowed so more money is created which means more money is going to be borrowed which means more money is going to be created and now we have this whole system of fractional reserve spending a fraction of reserve lending and fractional reserve banking and everybody is living off of this money which is actually just debt that's why they said the economy runs on spending because if money is not being spent then this whole system fails so this system is how it works in a normal economy but things are a little bit different in 2020 because we're in a recession so remember what i just said this system our economy runs on spending when you're in a recession spending slows down and to encourage people to spend the federal reserve bank creates these regulations and rules and different programs to encourage people to spend and if you look at the system what's the best way to encourage people to spend make it easier for banks to loan out more money so on march 26 2020 the federal reserve bank actually removed this 10 percent reserve requirement which says that the banks no longer are required to keep any money in reserves that means banks can lend out all 400 here all 300 here they don't have to keep any extra cash in reserves as a way for banks to have more money to lend out and to encourage them to make more loans i mean when has a safety net of cash ever come in handy anyways take a good look at this because i'm about to clean this off and show you why this is so important to understand if you've ever taken an accounting class before you've heard the term assets and liabilities assets are things that put money into your pocket liabilities are things that take money away from your pocket so when you go to the bank and you deposit a hundred dollars into your account this is a liability for the bank because this is a hundred dollars that the bank owes you right if you take a hundred dollars and you deposit into your savings account that's not the bank's money that's your money so that's money that the bank owes you but when the bank then loans this hundred dollars out to somebody else this a hundred dollars actually gets pushed onto the bank's asset side of their financial statements because now they have just lent that money to somebody else and now that's money that somebody else owes the bank plus because of this fractional reserve banking system they actually get to add another 900 or so whatever how much money they lend out and now they have a thousand dollars in assets on their financial statements because of a hundred dollar liability you deposited a hundred dollars in your account this is a liability for the bank because this is money that your bank owes you but then your bank turns around and they take your 100 and they lend it out to somebody else so they turn this hundred dollar liability into an asset even though they still owe you this money because now somebody else owes this money to the bank the bank doesn't have a hundred dollars anymore they gave it away to somebody else and then they multiplied it to a thousand dollars so they have just created these assets out of thin air the exact same dollar that's a liability for the bank also turns out to be an asset for the bank times 10 just because of how money is created to put this in perspective your clothes are liabilities right they take money away from you if you go to the mall and you spend 100 on clothes and you had the same system that would mean that you spend a hundred dollars on clothes which is a liability and every time you spend 100 on clothes somebody would magically come and just give you a thousand dollars now i want to talk about how you can use this system to benefit you that way you can create money or wealth but before i get into that if you are interested in learning more about assets and liabilities and money management and investing we have a free ebook on money management and investing that you can read for free when you sign up for our financial education emails which are also free if you want to read a free ebook and get our financial education emails you can do that for free by clicking the link up here or by clicking the link in the description below by the way our financial education emails are separate from our financial news emails the first way money is created is through debt that's how money enters our economic system and our financial circulation but the second way money can be created and how you can capitalize on it is through equity debt creates money and it puts it into the economic system equity then pulls this new money that was just created and it puts it into the pockets of people who understand money the simplest way for you to understand this is to think about buying a home let's say you bought this home right here for 500 000 and then ten years go by and now this home is now worth five hundred thousand dollars it goes up in value so now your home is worth finish the windows one million dollars you are now a millionaire because you have equity in your home worth a million dollars assuming you have no debt you also just created this five hundred thousand dollars of money or wealth right out of thin air you didn't do anything to help your home increase in value maybe there's some renovations here there but that's not why your home is now worth a million dollars this 500 000 of equity was just created what happened money was created through debt and this debt went into the hands of people and people took this money and they started buying homes in your area and your neighborhood now when that happened home value started to go up and some of this new debt was now absorbed into the equity or value of your home more money was created through debt and you own this asset and your equity in this asset went up because of this new creation of debt and money at this point you might not feel like a millionaire you're still going to work every day and getting a paycheck and paying bills like normal but you are a millionaire because you have equity of a million dollars here's where people get in trouble you are a millionaire on paper okay you don't have a million dollars in your bank account and you don't have a million dollars of income you just have a million dollars on paper which says this is what your net worth is because this is what your home is but you don't actually have this million dollars until you sell your property and so where people get in trouble is now they take a refinance or they take a loan out on their assets this equity this property and they start living this million dollar lifestyle they buy all these liabilities remember things that take money away from you they start buying shoes and vacations and now you're living this million dollar lifestyle and then if the value of your property goes down you are spending a million dollar lifestyle but you are no longer a millionaire because your paper value just went down it's not just homes you can create this type of equity or wealth by buying an asset or something that creates more value let's talk about amazon the company for a second in the end of 2019 the amazon stock was selling for something like seventeen hundred dollars a share so if you bought one share of amazon you would have had to pay seventeen hundred dollars a share for that in 2020 mid-2020 the amazon stock was trading for above three thousand dollars a share so now if i finish drawing this this is thirteen hundred dollars additional now for every seventeen hundred dollars you paid into amazon in 2020 you would have gotten another 1300 of equity technically this is called your appreciation but you don't have to do anything to increase the value of your investment you're not the one sitting there growing amazon i mean maybe you're spending money on amazon.com but you don't have to physically do something to help increase the value of your investment what happened again was money was created through debt and this debt went into the hands of people and people took their new money that was freshly created and they spent it at places like amazon and that made their company more valuable and that made your equity your stock more valuable you're benefiting from this new creation of money which was debt because it's creating you new money through the form of debt and equity so money is created through the form of debt and it enters our financial circulation now you can benefit from this by owning assets that are now pulling up this new debt or money that's created in the form of equity because this makes the value of your investments more this is what wealthy people do they buy assets with equity and then if this asset is creating more value then the value of their investment creates more wealth this is what financial education is all about and if you're looking for more resources to learn how to do this we have tons of videos on our channel and we have a free ebook and financial education emails for you in the description below [Music] the whole idea behind compound interest is you're going to invest some money today this money is going to grow and now you have your money working hard to make your money and the money that your money made working hard to make you money so it's almost like your money is having babies and your money's just gonna keep compounding and growing which means you have more money working hard to make you money even if you're not investing your money in the traditional sense you should hopefully still be earning this type of compound interest because if you go to work every single day you're compounding your knowledge and your skills and so the longer you go to work the more skills you're going to learn and the more valuable you're going to be as an employee that's why as you get older your pay should hopefully go up too because you're compounding your knowledge you're compounding your skills and now you're more valuable which means you should be getting paid more money it's the same concept with your money except more money doesn't give you more skills it just gives you more power like this 100 build doesn't have more skills than this 20 bill does it just has more power because assuming that one dollar will buy me a machine that's going to make me a nickel now with this 100 bill i can buy 100 of those machines with this 20 bill i can only buy 20 of those machines so i'm going to be able to earn more nickels with this 100 bill than this just because i got more power with this piece of paper than this one but this is where compounding becomes so powerful because every dollar i earned will buy me another machine that makes me a nickel and i need 20 nickels to earn a dollar this 20 bill will get me 20 nickels which will buy me one more nickel making machine this 100 bill will earn me a hundred nickels which will buy me five more nickel making machines so i'll be able to earn more nickels with this just because i got more buying power the more dollars you have the more dollars your money is going to be able to make and the longer you let your money sit there and invest and compound the more your money is going to be able to grow that's why albert einstein calls compound interest the eighth wonder of the world because now your one is working hard to earn you more money and every time your money does that you're gonna have more money that you can send out to work hard and earn you more money so it becomes a system almost like this machine that's just working to produce you more money and anytime you produce more money you can buy another machine that's going to be working to produce you more money you don't need a ton of money to start but the longer you have the more your money is going to be able to grow which is why you're going to see the biggest returns towards the end of your compounding like even if you start with just one penny and you can double your money every single day day one you have just a penny in day eight you have a dollar by day 21 you have 10 000 now your money is really starting to grow and by day 30 you're gonna have over five million dollars and you started with just a penny now i already know what you're thinking but just breathe if it was so easy for me to double a penny i'd already be doing that right now now i know it's not easy to double your money every single day and that's not the goal but you can do this over time there's a couple of different strategies that you can follow to compound your money and really build your wealth over time there's an active strategy and a passive way i'm going to be going over this but before i do i need you to do me a quick favor and compound that thumbs up button below actively compounding your money is literally what the word says this you are being active and you are buying something selling it and now you're using your profits to go buy something else you see this all the time in real estate you go out and you buy a hundred thousand dollar property you renovate it whatever you fix it up and you go sell this property for a hundred and fifty thousand dollars now instead of going and buying another hundred thousand dollar property you go out and you buy 150 000 property and you renovate it and now you sell it for 225 000 and so slowly you are growing your money and compounding your money because you can do bigger deals now you can do two deals at one time you can do 200 000 deals and hopefully sell both of these for 150 000 each and now you're just compounding what you're doing you're slowly growing what you can do because you make some money and you take your profits and you reinvest it into whatever it is you're doing this is exactly what i do on youtube anytime somebody watches our videos on youtube i get paid thank you for your penny now when i get this youtube money i can take all of it and go out and buy myself some new exotic cars go get myself a new gucci wardrobe and go enjoy some fine dining at chipotle with some extra guac but what i actually do with this money is i reinvest this money back into our business that way we can grow our business bigger i'm reinvesting it back into our blog and reinvesting it back into our newsletter and i'm reinvesting it into an app that we're making i'm actively working to compound this money by sacrificing some of these luxuries today that i could buy by reinvesting this money back into the business that way i can grow the whole pie bigger when i was in college i started a cell phone accessory business with a friend of mine and we didn't have a ton of money and we wanted to start selling these like cell phone battery packs and at the time we only bought like 10 of them because that's all we could afford and so we bought 10 of these battery packs and we sold them and then we took this money that we got and our profits and we went out and i think we bought 20 battery packs and then we bought 50 and then we bought 100 and so it was like a slow compound where we took whatever money we had to buy these battery packs we sold them then we took this money and our profits and we compounded it and that way we were able to buy more sell more buy more sell more and so you don't get to enjoy the profits when you're compounding it like this because if you're taking all of your profits and reinvesting it you're actively compounding it to grow the whole thing bigger when you do this the hope and the whole idea is you're going to start off with something small but a hundred dollars or a thousand dollars and you're going to grow into something a little bit bigger you're gonna turn a thousand dollars into two thousand dollars now you're gonna reinvest the two thousand dollars to turn into four thousand dollars and the four to eight the eight to 16 and you're going to slowly keep growing it there is a risk though because if you keep growing it and you don't take out any money for yourself eventually there's a chance that things don't work out and now you grew your 1 000 into a hundred thousand dollars or a million dollars and then things fail and if you didn't take out any money for yourself now you're left with nothing so if you're doing this type of active compounding you really just got to find the right risk balance for you because anytime you pull a dollar out that's a dollar that you cannot compound but if you keep the dollars in there then you take on more risk i mean this is one of the things that made elon musk so financially successful because in the early stages of his career when he would make 25 million dollars he would reinvest all of this money back into his business and he would leave nothing for himself because he wanted to compound and grow his dreams and his wealth by taking every dollar he had and throwing it back into his beliefs the second way you can compound your money is the passive way and this is what a lot of people think about when they think of compound investing because now what you're doing is you were taking your money and you're putting it into an investment you're going to let your money grow and anytime your money makes money you're going to reinvest that money back into it that way this money that you have growing is going to keep growing even if you don't add money into the pot because your money is growing and this new money is going to be working to make you money too when i was in high school any time we talked about compounding or investing your money in my math class the example that my teacher always gave me was investing your money in a cd in the bank or a savings account so the way it works is you put your money in the bank either in a cd or a bank account and then your money's going to grow and as your money sits there it will compound and grow because now this money that your money made will grow even more but the interesting thing about this so if we write bank account you're not going to get a very good return especially nowadays savings account nowadays is going to pay you like 0.1 percent if you're lucky and a cd is going to pay you one percent if you're lucky so if we look at this where you get a one percent return on your money and i'm being very generous here it is gonna take you a long time for you to double your money at this rate keeping your money in the bank is going to take you 72 years to double your money so you're not building wealth in this lifetime maybe your great great great great grandkids will have some decent money to play with if you're really looking to compound your money and grow your money then you need to be putting your money in assets so this would be things like the stock market if you're investing in your money in the stock market the goal is to grow your money by investing in companies that you believe in because over time these companies are going to make more money which would make the stock price more valuable for you now if i come back here to active if you do a business or flipping like we talked about there's really no limit or kind of a baseline to how fast you can grow your money here i mean it's not super unreasonable to see a 100 growth in a year so it's really kind of uncertain as to how good of returns you'll see it just depends on what it is you're doing and how good you are at it so you know there's really no baseline here the stock market on the other hand has gone up by between eight to ten percent a year historically so even if we stay on the low end here eight percent you're going to be able to grow your money much faster and the thing you got to understand about the stock market is there's a couple different ways that you can make money you can make money through appreciation which is when the price of your stock goes up and you can also make money through dividends which is when the company that you invest in literally just gives you a cash check so if you can grow your money by eight percent a year in the stock market you can double their money every nine years that's a whole lot better than 72. now if we kind of really look at compounded get money this is where a lot of people assume that you have to invest in dividend bank companies which are companies that pay you cash payments that way you can compound your money because in that case when you get this dividend then you could reinvest this dividend back into the stock market and buy more shares that way now your money is actually growing so you invest in dividend paying company this company gives you some cash then your money automatically gets invested that way you can own more shares and now as you own more shares you're going to get more dividends as you get more dividends you can buy more shares so it creates this reoccurring cycle of growth and compounding this dividend reinvestment strategy is a great way for you to build your own wealth because now anytime you get paid you're going to automatically reinvest this money if you want to learn more about how to do that our team broke this down in an amazing article on our website where it shows you one how to do this reinvestment how to invest in companies and how to find a good brokerage that does this so if you want to learn more about how to do that i'll link the article for you in the description below but what i also want you to understand is that not every company pays a dividend the only companies that really pay dividends are really you more established and more mature companies because these are companies that at the end of the year they have so much cash in their bank account they have no better use for their money because if they could reinvest this money back into their company and grow their company bigger then they would probably do that but they have so much cash where they're just like you know what let's just start giving it away to our shareholders because we have no better use for this cash and so people assume that the only way to compound their money is to invest in dividend-paying companies because these are companies that are giving you cash and when you get this cash you can reinvest it but you can also compound your money by investing in companies on the stock market that are reinvesting their profits if you find more of a startup company that you really like and you really believe in and you think is a good value and you invest in this company and this company anytime they make money they don't give it away in dividends they take this extra cash and they reinvest it back into their company so they're really not making that big of profits like how amazon during the early years about being public never made any money because any time i made money and reinvested it back into the company if you invest in a company like this then your money is still compounding because you own shares of a company that's using all of its money to grow itself and so while you're not getting this cash payment and accumulating more shares your shares become more valuable because of this compounding because the company that you're investing in is compounding all their money because they're taking all of their profits and reinvesting it and there are pros and cons to both because this type of investing reinvested more of a startup type company has more risk because there's a chance this company will fail like we talked about here if you're actively compounding your money which is what this company is doing there's a chance that it could fail and so yeah they're reinvesting all their profits and they're doing everything they can but if this strategy fails then there goes your investment but on the flip side with these dividend investments because these dividend paying companies are typically larger and more mature you're gonna have a safer investment which usually comes with a smaller return so you might not see the stock price go up as fast and your average dividend is typically somewhere in the two to four percent range it really depends on the company so it's not anything huge and hopefully it will go up over time but you just got to kind of understand where you want to be it comes with lower returns here higher potential returns here but more risk the second thing is with dividends anytime you get paid a dividend you have to pay taxes on this dividend so while you take this dividend and you reinvest it you still have to pay taxes on the money that you made even though you don't actually get that money in your bank account because you're in this case reinvesting that money another way that you can compound your money is by investing your money in real estate this is my actually favorite place to invest my money because not only do you get passive income if you do it right you will also get the appreciation in the property and so with real estate when i invest my money i'm looking for a seven percent annual return on my money cash on cash minimum ideally something closer to eight percent but seven percent is my real minimum now the thing that you got to understand here is that if i get a seven percent return on my money it's gonna take me ten years to double my money but in this case the seven percent is a cash on cash return that i'm getting every single year in my pocket so for about a hundred thousand dollar property that means every year i'm making at least seven thousand dollars in profit hopefully over time this is gonna go up if rent prices go up but that means i'm making seven thousand dollars a year and now what i can do is after 10 years i will have this cash in the bank that i can use to go and buy another property or i can just take my own cash go out and buy another property and supplement it with this money that i'm making from real estate the reason that real estate becomes so attractive now on top of this is because not only are you getting this cash flow but if you're buying your properties in a good area where people want to live then you're also going to see the property value go up too so i buy this hundred thousand dollar property and every year i'm getting seven thousand dollars a year in passive income but over time this property might go up in value to let's say two hundred thousand dollars and now if it comes time for me to sell this property i sell it for two hundred thousand dollars i can do something called the 1031 exchange it's a little loophole in the real estate world where now i can take all 200 000 pay zero dollars in taxes and go out and buy a 200 000 property that's gonna pay me with more passive income and so when i try to do that in the stock market with dividends the first thing i had to do was pay taxes on my dividends and then i could reinvest these dividends with real estate if the property value goes up now i can sell the property pay no taxes today on those profits and go out and buy myself a bigger property that's going to pay me with more money plus even on the passive income the cash flow that i'm making from real estate this money that i'm getting here there's a lot of tax breaks that i get with real estate that i don't get with the stock market so even as i get the seven thousand dollars a year in passive income i don't have to pay taxes on all seven thousand dollars because there's other tax deductions that i can take like something called the depreciation tax deduction which says that i get to get a deduction because my property is one year older so happy birthday to your property you get a tax break so from a tax perspective you get more benefits here from real estate but real estate does come with its own downfalls because now you have to deal with more people like when you're investing in stocks you're not dealing with anybody you can go out and buy shares of amazon or lululemon or chipotle and mcdonald's and not have to deal with a single person you can do this right off your phone you want to go out and buy a real estate property you got to have a real estate agent you got to have a property manager you got to deal with a contractor you got to deal with an attorney and you got to deal with tenants and so if you don't want to be in that game the stock market is better for you plus with real estate you're in charge you're the one that actually has to make sure that your property is generating income and it's more work on your end because now you got to be the one that's negotiating the deal and if your tenant doesn't pay or if your tenant damages the property that's a cost that you have to pay and of course the most obvious thing is that it takes a lot more cash to start investing in real estate than it does to start investing in the stock market i mean you can start investing in stocks with as little as a hundred dollars but if you want to go out and buy a property you can't do that for a hundred dollars at least not a good property now while it's your decision on where you want to invest your money here here or here the idea stays the same that you need to compound your money the whole idea behind that is anytime you make money you want to reinvest at least some of it that way your money is growing and the money your money made is growing that way you can grow your money quicker and quicker and quicker over time because the real secret to building wealth is investing yes we talk about that all the time but if you really want to grow your money quicker you got to compound your money which means you got to have more money in the fire that's burning to make you more money but i guess if you're burning money that's probably not what you want to be doing so bad example but you got to have more money working to make you more money before we get into the next clip if you are interested in learning more about how you can manage your money the right way that we can build wealth have a financial system and invest your money our team put together an amazing guide that walks you through how to do this you can download this guide for free when you sign up for a daily newsletter and you can do that by clicking the link up here or by clicking the link in the description below [Music] i didn't grow up learning about money or investing in my mind money was something that you go to work to earn and that is something that you spend the whole concept seemed really simple i mean in my mind if i wanted to spend more money i needed to earn more money and if i wanted to earn more money all i had to do was study harder in school and get better grades so i can get a better job now i grew up in a traditional indian house and like most brown kids i was told that if i wanted to become successful or become anything in my parent size i needed to become a doctor so when i talk about getting a better job i mean becoming a more specialized doctor like a surgeon or something because now you'll be able to make more money fortunately for me i wasn't smart enough to be a doctor now i make money by talking about how i was supposed to be a doctor but along the way i started learning about money and then my mind opened up to this brand new world of investing that i had never been exposed to before like i had never heard of the word investing before this and now i was learning that you can make money without having to physically go to work and you can make a lot of money without even being a doctor so for all your uncles and aunties watching this yes your kid can still become financially successful even if they get an a minus in math but before you or anyone can become financially successful you got to really start understanding investing and you got to understand how to invest your money the right way which is why in this video i want to go over the five investing habits that really changed my life but before i get into those i need you to do me a quick favor and smash the thumbs up button below the first thing you got to do is you got to stop wasting money when you don't have money to waste when i was in high school i worked a couple of different jobs i worked on tn's pretzels in the mall and i worked at weddings on weekends and i was driving a toyota solara and anytime i made money i would use this money to improve my car put some upgrades on my car in my mind money was something that needed to be spent and what's a better place to spend your money than your car and so i was on a mission to have the sweetest toyota out there first i got my windows tinted then i upgraded my sound system then i put in two 12-inch subwoofers in my trunk and then when i had some more money i put in some brand new rims then the first time i had a few thousand dollars in my bank account i had a great idea i was going to upgrade my doors to not open like regular doors that way my doors on my toyota could open like butterfly doors like a lamborghini and so i found this guy that could upgrade my toyota's doors for like three thousand dollars and i got so excited so i called up my cousin i told him i was gonna put butterfly doors on my toyota solara and he was like just pretty you're an idiot after i had that talk with my cousin i learned that apparently putting all this money in my car was a waste of money before you spend all your money on things that don't make you any money like butterfly doors on a toyota you gotta use your money to buy things that make you money the toughest thing about starting to invest your money is finding the money to invest and you have so many people that will say oh i can't invest my money because i'm broke but at the same time they have the newest iphone they have this brand new macbook you're driving a brand new car you have a gucci wallet you have a gucci purse and you're wearing all these fancy clothes and yet you don't have the money to invest before you can really see any success in the investing world you got to stop spending money on things that aren't making you any money and you got to start spending your money on things that do make you money investments assets everybody at one point or another youtube not just me i know you've done this too have made this excuse that you don't have the money to invest yet you're still spending your money on something that you don't need and that's not making you any money you know what i'm talking about your bmw your trip to cancun your lululemon leggings your iphone your extra guac if you haven't started investing yet the first thing you got to do is stop spending money on things that don't make you any money that way you have money to buy things that do make you money the second habit that changed my life was understanding that i could live off of my passive income instead of just my active income active income is the money you make from your job or your business so every single day you go to work and you get paid this is your active income if you stop working you stop getting paid your passive income is when you make money and now you invested into these things these investments and every month or every year these investments pay you the nice thing about this passive money is it's passive you don't got to go to work to earn it you put your money into this thing and it's going to keep paying you again and again and again the first real life-changing investment that i made was when i bought this condo out of foreclosure it was a small condo and i fixed it up and i rented it out and after paying all my expenses this condo started paying me 250 a month in passive income this was money that i did not have to work to earn because i had a property management company doing all the day-to-day work and so this 250 was being deposited into my bank account every single month and this was profit after paying all of my expenses now to be fair in the beginning of my real estate investing career it was anything but passive because i had to jump over this huge learning curve because i didn't have any guidance or mentorship when i got started as a real estate investor and i had to learn everything on my own and i made a whole bunch of mistakes but after i jumped over that hurdle then it became very passive and this couple hundred dollars was being deposited into my account every single month and i didn't have to do any work to earn this money and now my mind started thinking if i could just amplify this now i can have my passive investments pay for my life and now i'm financially free because i don't have to go to work to earn a paycheck because my investments are paying for my lifestyle at this point it's all a numbers game if i can make 250 in profit every month from one unit if i have 10 units that's 2500 a month coming into my pocket every single month if i have 100 units that's 25 000 a month coming into my pocket passively that i don't have to work to earn now i just got to figure out how much money do i need to get these 10 units or these 100 units and how do i actually go about doing that this is where the majority of people look at their money all wrong the majority people think okay i'm making 40 000 a year for my job or 400 000 a year for my job whatever it is now they're wondering how big of a lifestyle can i live based off of my income what i want you to do is think okay i'm making 40 000 or 400 000 a year how many investments can i buy every single year and how can i live off of my passive income instead of my active income because once your passive income is enough to cover your lifestyle now you're financially free you can do whatever you want your active income is just icing now you can use all of your active income and just use this money to buy assets it doesn't have to be real estate but you're using all of your active income to buy assets you're living off your passive income and every single year your passive income just keeps growing because you're taking your active income and you're using it to pump up your passive income this is how wealthy people look at their money the reason wealthy people make so much money is not just because they have a big salary it's what they do with their money the richest people don't make their money from their jobs they make their money from their investments and so what you ought to do is you got to start thinking like a wealthy person and start building up these assets and start building up these investments that way now you creating this passive income yeah you're not gonna make a million dollars a year from a passive income in day one but maybe you can start with fifty dollars a month or a hundred dollars a month and then you can start slowly building that up to now a lifestyle where you can live off your passive income there's a lot of different ways that you can do this and i made a video on youtube where i went over 25 different passive income ideas if you want to watch that video i'll link it for you in the description oh the third investment habit that really changed my life was understanding the value of my time growing up in a traditional indian house i learned to be very frugal and as somebody who's frugal you start to think why would i want to pay somebody else to do something when i can just do it myself and save that money when i started off in real estate i had to decide was i going to manage my investment properties myself or was i going to have a property management company do it for me property management company's job is to make sure that your investment is completely passive so they're doing all the day-to-day work and they're making sure you're getting paid if you don't want to pay them then you can do the management work yourself it's just not as passive because now you got to make sure the tenant pays you any time the toilet breaks you got to go out and fix it or you got to send somebody to fix it and so you got to be more involved if you're going to be the manager yourself if a home rents for a thousand dollars a month a property management company is going to take 50 to 100 every single month to manage this property but if i just do it myself that's more than a thousand dollars that i can keep in my pocket every single year but what i'm not valuing is my time because yeah if i manage it i can keep another thousand dollars but i lose out on all that time this is where i had to really dig down and ask myself do i want to be in the management business or do i want to be in the investment business because if i want to be in the management business then now i am paying myself an hourly fee to go deal with the tenants but if i want to be in the investment business now my time should be spent finding more real estate investment deals that way i can grow the pot instead of just trying to figure out how i can cut some pennies out of my expenses time is your most valuable commodity and it's the only resource that you cannot create more of you can always get more money but you cannot get more time once i started thinking like that i stopped wasting money on things that i could hire someone else to do that way i could focus my time on things that are going to bring me more value and make me more money i don't manage any of my real estate i hire a property manager to do that i'm a licensed real estate agent and so i can find real estate deals myself and i can write out the contract myself to buy the deals but i don't want to spend all that time writing these contracts so i partner with another real estate agent who splits the commission with me and i just go find the deals and i tell them the offer that way they do all the busy work and i have multiple virtual assistants that will have other people managing my days and my emails that way i don't got to worry about doing that if i'm spending my time doing something that i can delegate or pay someone else to do then i am wasting my time i want to spend my time doing the things that are going to be the most valuable to me and do the things that are going to give me the best return these are things that only i can do and no one else can do everything else i want to delegate to someone else the fourth investment habit that really changed my life was understanding the long game i think a lot of people myself included who gets started investing kind of follow a similar plan so you hear about this whole idea of investing and you get really excited and then you start investing your money and then you start hearing about these cool things like trading and day trading and penny stock trading where you can make a lot of money very quickly and so now you go from this idea of investing your money for the long term to build wealth to now try to make this money almost overnight by trading your stocks into these riskier things that will hopefully make you money very quickly that's when i got into day trading and i was spending all of my free time looking at the stock market trying to buy things and sell things and buy things and sell things and buy things and sell things and i was always kind of living with this anxiety because i was just constantly staring at the stock market and that's when i started to realize that this wasn't working because well i wasn't making any money the investors that make the most money are the investors that play the long game because now you have time on your side to let your investment grow and compound and make you more money the reason why this is so hard for so many people is because it's not as cool or as hot as trying to be a trend investor right now you're investing in the hot stocks that are booming right now and investing in all the names that are always on the news but that is temporary i mean these are just trends what's popular today might not be popular tomorrow or a year from now or 10 years from now but if you're investing in something for the long term because you believe in the underlying value of this company or this investment or this asset now you just want your money to grow and compound over time my favorite place to invest my money is real estate so i'm always looking for more real estate deals but i also have some money in the stock market and the way i invest my money in the stock market is a couple of different ways one every single month i have an automatic deposit where some of my money automatically goes into the stock market into a few funds that i want to hold forever and then i have some money in the stock market that's kind of like my more fun money where i'm investing in more speculative things and more growth things and this is money where i can be a little bit more active with but the most important thing is you got to have that money to go towards the long-term investments that's just automatically happening because that's where long-term wealth is built i'm also a money nerd i like researching companies and i think i'm pretty good at it i like reading financial statements and cash flow statements and i like to study how companies are doing which is why i also have the kind of fund money if you want to call it in the stock market where i'm investing in individual companies that i think are going to grow in the future you have to know yourself as an investor and you got to know what your goals are and you got to understand that the big money is made over the long term and the fifth investment hack that really changed my life was understanding the value of learning i went through these like weird phases in college because in the beginning of my college career i thought that college was necessary to become successful and the better you do in college the more money you're gonna make and by the time i was leaving college i was like this is so dumb why did i spend all this money in college because i'm never going to use my college degree now college has its place i learned a lot in college but the things that i learned in college were things that i found outside of my classroom because i started a lot of business and started investing in college and so that was really valuable for me and so there's a lot of value in college but this is where i started to have this kind of real debate into the value of education your education is the backbone for your success but the thing that a lot of us get confused is we assume that education means college but there's so much more to education than this college and you have to have a good education if you want to become successful but this education can come in the form of real life stuff not just in the classroom i learned how to be a good real estate investor by screwing up as a real estate investor i talked about my worst real estate deal ever on youtube and this was the deal that cost me the most money and that was the deal where i learned the most as a real estate investor if i got defeated and just started crying after that deal then i wouldn't have gone anywhere but i used that experience as lessons and that taught me to be a much better investor that way i can do bigger and better deals now if you want to watch that video i'll link it for you in the description below i listen to books every single day i don't like reading so i listen to audio books i learn from youtube videos i buy a bunch of online classes and so i invest a lot of my time and money to learn if you think you know everything then chances are you know nothing if you want to keep growing as a financially educated person or as an investor you have to constantly keep learning this might not be something you learn in the classroom but these are things you can learn outside of the classroom by doing and by learning about reading so the five investment habits that really changed my life was one stop wasting money when you don't got money to waste understand that you can live off your passive income instead of just your active income three understand that you gotta value your time fourth you gotta play the long game and number five you gotta always keep learning if you enjoyed this video here's the video on passive income that i think you'll love and while you're at it join our free finance and business newsletter and as always keep hustling then when people buy candy they buy pop they buy these things from a vending machine then you will get a percentage of the profits your job is to make sure the vending machine is full and make sure that you're getting paid the nice thing about the vending machine business is

Channel: Minority Mindset

Views: 370,417

Keywords: minoritymindset, minority mindset, minority123, jaspreet singh, rethink rich, financial education, financial literacy, save money, saving money, how to save money, save $10000, save money fast, save money quickly, quickest way to save money, money saving tips, money tricks, savings, money management, investing, investing 101, investing in stocks, investing in real estate, passive income, wealth, build wealth, how to save money fast

Id: 6GYCU0VDFQE

Length: 82min 21sec (4941 seconds)

Published: Sun May 09 2021