- So I know that I look like I'm a baby. Everyone always says I
look like I'm a teenager, but the truth is, guys,
I am 29, almost 30. And as I discovered, when you reach this point in your life, you tend to reflect back on your 20s, and when I look back, I think, yep, I did some awesome stuff with my money. Of course, I also look back
and think, hey, you know, I did a lot of stupid stuff,
too, and so did my friends. So hopefully, I can help some of you not make the same mistakes that we did. And the first one is a real doozy, and that is not realizing that, well, credit cards aren't real money. Nope, they ain't real money. They are zombie money. Once you're 18, you are eligible to sign
up for a credit card, and most people sign up
for their first credit card in their late teens or early 20s, which is awesome, because
as my subscribers will know, I absolutely love credit cards. I use credit cards a lot, and because of all of my travel miles I earn for free with them, I've been able to fly first
class and business class around the world in my 20s. Credit cards are awesome. They are extremely helpful, but they are also a double-edged sword. Credit cards are only
fantastic on the condition that you use them wisely, not stupidly. Sadly, though, it's really
easy to use them stupidly. Credit cards trap a lot
of newbie card owners who don't understand that
you need to be very mindful when using credit cards,
because if you aren't, it's easy to overspend money. Why? Well, think about it. When you buy something with cash, that cash is gone immediately. You can feel that pain
of the loss of your money that is now gone, but when
you swipe your credit card, your bank balance, it remains the same. There is no immediate pain, which is why, as numerous studies have shown, when most people use a credit card, they make the fatal mistake
of spending more money than they would have with cash. Of course, my friends and I now know this because we've had experience with them. But unfortunately, when
you're in your early 20s or early teens and you
get your first card, you don't have that life experience yet. Here in New Zealand, on
orientation day at uni or college, banks will set up booths and
lure new students to come over and sign up for credit cards. And in my opinion, it's a little shady, because they'll use all sorts of bonuses to lure naive students
into signing up for them. When I was at uni, a bonus one year was that if
you signed up for a credit card and used it to buy anything at McDonald's, you would get a small
side of fries for free. And obviously, to a bunch
of broke teenagers at uni, or as you would say in America, college, this was literally the best deal ever. And so, surprise, surprise. Their booth was inundated with students desperately wanting to sign
up for this credit card, one of those being a good friend of mine. He got his $500 starter credit card, and very quickly, his
life began to change. Now when his flat pantry got low, instead of looking for
loose change in the couch and buying some noodles
and tuna to tide him over to his next paycheck, he would instead take
himself out to McDonald's and get a Big Mac with a
side of free small fries. And then when he realized
he had a hole in his pants, instead of going to the local thrift shop and getting a new pair,
he'd head to his local mall and buy a new pair of jeans instead. And then, when he asked
a girl out on a date, instead of taking her on a
walk through the park for free, he would take her on a date to McDonald's and buy her a McChicken with a side of free small fries instead. And, of course, it was so
easy to spend this money because, hey, he experienced
none of the immediate pain he would have felt buying these things if he had used cash instead. But, of course, he discovered
that it was just delayed pain when he got his credit card bill and realized he now owed
the bank $500 plus interest. So not being aware of this
is indeed a money trap that you want to avoid in your 20s, but something else
that's almost just as bad is becoming afraid of debt. A lot of people told me
growing up that debt was bad, but those people were wrong, but because of the fact that
they had more life experience, I sadly believed them for a while. Debt isn't bad, but it isn't good either. Instead, it's a double-edged sword. It can be used for bad things, and it can be used for good things. My multimillion-dollar
business would not be a multimillion-dollar business
without my credit cards. I spend a lot of money on them to pay for business expenses
that manage my cashflow. And that phrase there, cashflow, is the real way to utilize
credit cards and debt. It's Monday, and you wake up and find that you've been sent a $50 phone bill, but because you get paid on Friday, you don't have the cash right now. So you take out your
credit card to pay for it because you know that you're
getting a $1,000 paycheck from work on Friday. Yes, that $50 that
you're spending right now on your credit card is zombie money, but give it five days,
and it will be real money. Credit cards help you
close the five-day gaps so that you don't get
charged any late fees on your phone bill. They help you manage your future cashflow. But guys, the second
mistake, if you make it, it's way worse. If you make this mistake, you're
going to be broke forever. And that is money mistake number two, not hitting that Like
and Subscribe button. But seriously, every time
that you take a moment out of your very busy day
to hit that Like button, it really helps this channel, so thank you so much to
everybody that does it. But no, the actual money mistake is this: not respecting compound interest. So yes, obviously, it is a big mistake to not save a portion of
your money in your 20s, but in my opinion, at this point, saying is a massive cliche. I mean, let's be honest. Tune in to any YouTube
millennial finance channel at this point, and you'll
hear the same thing. - The power of compound interest. - Compound interest. - Compound interest. - And actually, you'll
also hear something else talked about a lot, and
that is the glorification of being super frugal in your 20s. - And if you guys want to know the secret about how I was able to become
a multimillionaire in my 20s, I pretty much spent my money as though I'm making a McDonald's salary. - And yet, somehow these
millennial YouTube finance channels are also driving a Tesla
and their 20s, too. But, no, no I kid because seriously, I don't have a problem with
driving a Tesla in your 20s. Even though I personally
don't care about cars, I'm sure for car buffs,
they are, for some reason, really fun to drive,
and you know what, guys? I think it's a massive mistake to not have fun in your 20s. I genuinely don't think that you need nor should spend your 20s living like you earn McDonald's salary, unless you've actually
earn a McDonald's salary. Surely at this point,
COVID-19 has taught us all an extremely important
and valuable life lesson, and that is that nothing
in life is guaranteed and you cannot predict the future. But you see, I didn't need
COVID-19 to teach me this lesson, because sadly for me, I had
learnt earlier in my 20s. In fact, I learnt it last year. I was in Calgary, Canada on a vacation, and it was the day before my flight home, and I was packing my bags an getting ready to go home
to little old New Zealand, (stomach rumbles) when suddenly, my stomach
started to feel funny, and over the course of a few hours, I went from feeling funny to
me being curled up on my bed in horrendous pain.
(alarm blaring) On the pain scale, I was a clear eight. Well, I went from being curled
up on my bed in my Airbnb to lying on a hospital gurney,
getting prepared for surgery to have my inflamed appendix taken out. And while appendix
operations usually end well, you never know what could happen. So anytime you do have an
emergency life-saving operation in a foreign country, you start to wonder what would
happen if it didn't end well. And as I did, do you think
I lay there thinking, "Man, I really wish that
I had taken more advantage of compound interest?" Or do you think that instead lay there, "Man, I'm really glad
I took time to travel, have amazing memories, and see the world with
my family and friends"? So obviously, guys, it's a balance. Yes, you need to start saving
a portion of your money in your 20s. Compound interest will thank you later. But don't take life for granted. Don't assume you have tomorrow. Enjoy today, too. Balance your spending. Don't go to either extreme. And so that's why, for
me, when I look at a Tesla and see that somebody buys it, I think, "Hey, if they can
afford it, good for them," because chances are, they're a car buff, and that Tesla will, for some reason, bring joy into their life. But you know what will
probably not bring much joy into your life? Influencers all sporting
the latest Gucci stuff, the latest Louis Vuitton stuff. Unlike a Tesla, which
makes a significant impact on how you do a major activity, driving, this stuff doesn't really
change much in your life at all. Now, yes, there are legitimate
reasons for buying stuff, but if you think one of
those reasons is happiness, I'd question that, because
as cliche as it is to say, the truth is, stuff usually
doesn't make people happy. And to see why, we just need to look at a
study done in Vancouver. In what might be the best scientific study to be a part of ever,
a group of participants were each given $40 for free
and then asked to spend it on something, like a new
T-shirt or a new pot plant. Then, next week, the participants
were each given $40 again, but this time, they
had to spend it instead on a service that would save them time, such as hiring a cleaner for two hours or a meal kit from Blue Apron. Blue Apron is a service that
each week sends you meal kits featuring all the ingredients you need to prepare healthy and delicious meals right out of your home. There are eight recipes
to choose from each week, and you can choose from any
combination that you like. To try Blue Apron for yourself, simply click on the link of
the video description below and use my coupon code NOPE to get 9% off, because seriously, guys, I'm just kidding. This video is not sponsored by Blue Apron, but as you'll see soon, this
video probably should be. So, back to our study. All the participants were
called after each purchase, and they were each asked to
rate how happy they were. And the results were overwhelming. People felt much happier
after spending their $40 to save time, rather than to buy stuff. So basically, what the study shows us is that buying a Blue Apron subscription, yeah, that'll probably make you happy. And why? Well, because we'll free up the time that you would've spent planning meals, shopping for food, and
chopping up ingredients, so that you can spend that time on experiences that you enjoy, whereas just buying more
stuff that you don't need does not save you time, nor does it provide
you with an experience. You get an initial dopamine
boast, and that's it. For most people, the happiness
and satisfaction they gain from buying stuff is fleeting, so you find yourself having
to buy more and more stuff, seeking out satisfaction,
but never achieving it, although, as I've said, it's when you buy more and
more stuff that you don't need. If you actually need that stuff, then yes, it is going to make you
significantly happier, so it is a good investment. So, if you were previously
sleeping on the floor, then buying a mattress to sleep on would substantially improve the quality of your day-to-day life and would thus substantially
increase your happiness. But, while I certainly fell
for this mistake in my 20s and bought a bunch of stuff
that I really didn't need, there was actually one
purchase that I regret way more, and that was college, or as we say in New
Zealand, uni or university. See, I don't know what
it's like where you live, but here in New Zealand, if you have the teensiest
little bit of intelligence, it is just assumed that after high school you're gonna go off to university. But my goodness, I hope that this attitude that everyone should just
go to college or university will one day change, because for me, university was a very
expensive mistake to have made, but probably not for the
reasons that you're thinking. You see, when I was a teenager, I actually had a pretty
successful online store that resold video games and accessories. And, of course, I
graduated from high school, and everyone always asks
us high school graduates the same question: "So now that you've left high school, what degree are you going to study?" And at first I started replying
to these questions with, "Huh? I don't know. I'm thinking of taking a gap year and spending it on growing
and scaling my business." I mean, that seems like
a smart idea, doesn't it? It's making me a bunch of money, and every time I would say this, people would laugh and they'd be like, "Ah ha ha. That's so
funny, taking a gap year. Ha ha. But seriously, what degree are you
actually going to study when you definitely do go
to university next year?" So I gave into this enormous
societal peer pressure and went and signed up for
a college or university, a Bachelor of Humanities with
a major in Religious Studies, and as you can probably tell, that is a major that has zero pathway to any sort of career at all, but costs just as much as any
other type of degree to get. So yes, I went to
university to get a degree that had zero pathway to a well-paying job to pay off my university
loans that I was racking up, and despite this fact,
everyone applauded me. Good on you for going
to university, Sarah. Good on you for going into debt to study a degree that
won't get you a job. I found it so baffling, and
so in my feeble attempts to live up to society's
expectations of me, I was trying to balance my
store that was making me money and my degree, which was costing me money, and this one day led me
to have a bright idea. You see, like usual, I had left
my 2,000-word history essay until the last minute. I had two days to write it and get it in. But I also had a stack of new video games that I wanted to list for
sale on my online store. I couldn't do both. There was just simply not enough time. (chair squeaks) Hmm. I could choose to spend my
time writing my history paper. If I do that, I'll make no
money, but I will pass my class. But if I instead choose
to list my games for sale, those games will make me
money, and with that money, I could hire someone to write
my history essay for me, and actually, I'll make so much money that I'll be able to outsource all of my history essays this year. Not only will I make more money, but I'll also pass my history class and regain a bunch of time that I would've spent writing essays and use that again to
make even more money. Pleased with this plan, I went onto Google and started looking up
essay-writing services, and as I started contacting
the one that looked the best, I had a sudden realization. Wait a minute. In the academic world, hiring someone to help you
complete a task more efficiently and faster isn't considered
smart or intelligent. It's considered cheating. And so would you believe
that the very next day, I finally went and dropped out of college? College, or as we would say, "university," obviously wasn't right for me, but unfortunately, by the
time that I had dropped out, I'd already accumulated a bunch
of useless, unnecessary debt that didn't aid me one single bit. So don't make my mistake. Actually sit down and ask yourself, "Is this degree gonna actually help me towards my long-term goals, or am I doing it because
society is pressuring me to?" because obviously, some amazing
careers do require a degree, and that's okay, but please
don't feel pressured to go. And, you know, pretty much
everyone told me when I did it that dropping out was going
to be a really big mistake. "Why not just finish it? You've already invested so much. Sarah, why aren't you just falling for the sunk cost fallacy?" And at the time I thought, no,
I'm not gonna fall for this. Just because I've already
fallen for the trap of thinking that I have
to go to university because everyone told me to doesn't mean I'm also gonna therefore fall into the sunk cost fallacy trap too. There is a great saying,
"Don't cling to a mistake just because you spent a
lot of time making it." Just because I'd wasted
my most precious resource, my time at uni, didn't mean
I had to keep wasting it. I dropped out and I never
looked back, not once. So did this video help you? If it did, please subscribe and hit that little notification bell so that you don't miss
out on any of my videos, and if you'd like to learn how I built five income sources in my 20s that makes me over $1,000 a day passively, I'll have a link to that video here. So go ahead, watch my next video, and I'll see you over there.
