6 Money Traps to Avoid in Your 30s | Phil Town

hey guys I'm Phil town from rule 1 investing today I want to tell you something about money traps that you should avoid in your 30s [Music] so get into middle adulthood it's really a major shift in priorities that happens right there once you stop needing to count the days to your next paycheck you're starting to make a little more money it's time to start really planning out your financial future really easy to avoid doing this because you've never had to do it before in your life because what was the point right you're eating you know hand a mouth but now not so much hand to mouth there are so many things that get in the way of doing that and you may not even realize it so let's talk about some of these now that you have like a better income right don't let social obligations strip it away there are six money traps that you should avoid it all costs and I know all of them firsthand first buying a car that's out of your price range telling you the first time I made money right when I started investing and I had a good year I bring in a bunch of money I think I made eighty three thousand dollars I would straight out and bought a Jag I mean come on I've been in Volkswagens Harleys I bought a Jag ah man I send that car it felt so good I felt so cool I Drive it around everybody obviously admired me for my fancy car and that lasted about two weeks and then I figured out huh nobody really cares at all so don't buy a fancy car to impress people you don't like or don't know just because you can people don't care you know you need transportation but there's so much variability in price that you have to spend wisely so new cars can be one of the biggest money pits a person can get stuck in look I like to buy new cars I lease nice cars fair enough but I'm also wealthy so don't do that when you're back in your 30s and you want to build up financial freedom it's just going to be something that gets in the way a car fresh from the manufacturer loses about 30 percent of your value of that car in the first year and half of it by the end of three years and it's still a good car right now by comparison if you buy a really solid vehicle that's a few years old what 3 maybe at about half price and you keep it in good condition you're gonna have one a much lower payment right and by the way it no again no one cares what car you're driving let me go buy a three-year-old you want a fancy car go buy a three-year-old gl for 50 gonna be about half of what the car was new which was about eighty one thousand bucks you can buy them for forty and there's still as good as the day they got it but usually those people are taking great care of them and now you're riding around at a GL 450 you want to know what else it looks exactly like a 2018 GL 450 so learning to protect and enjoy what we already have will make it a lot easier to set aside more income for investing second buying a home that's too expensive for you mmm-hmm been there done that owning a home that increases in value is a really good practical expense but there's a point of diminishing returns when you are funneling every dime you have into a mortgage on a home that you can't really afford then you have no money left for emergencies you have no money left for investing you have no money left period and the strain on you your marriage everything can be brutal a monthly payment that you can barely manage can place an enormous weight on your budget for 30 years on average instead might be a better idea to keep an eye on a local market and buy when you can get a home in a good neighborhood for a moderate price that you can handle okay in other words put some time into really looking for a rule 1 bargain on a house people get into trouble financially right the people who just can't afford that really nice house they might get it into foreclosure you might be able to buy that house really cheaply look for houses on the edge of a really improving neighborhood those houses in a few years are gonna be in the middle of a great neighborhood look for homes that are on the edge of something that's getting better go find yourself something on sale now third spending too much going out oh we all do this although paid for a house in a car those are the biggest hits to monthly income you would be shocked by the effect the littler expenses can have dining out right restaurants used to mean you know go down to the cheap pizza joint on the corner when you're a student right or run over to Chipotle so now that you have more discretionary income you're thinking about stepping it up a little but it doesn't mean you have to or you should okay right everybody wants a little entertainment now and then but you should still budget for it give yourself a little room to spend on the things you really want to do that's great but keep it under control and you'll enjoy going out and doing that thing you really want to do all the more for the effort to keep it in your budget some people I know just put the money for the restaurants into an envelope at the beginning of the month take it right out of the bank and when that envelopes empty they're done going out next having an expensive significant other believe me I've had it both ways so even if you are and right now I'm married to the most magnificent person on the planet so I have been in the other place so it's not fun even if you're master of your own money other people may have a habit of getting in the way of your financial plans in a big powerful way failing to communicate about how you're working your spending habits with your significant other is a major cause of relationship trouble for married couples and committed couples so if you're dating or you're just getting into a long-term relationship take the advice here from Uncle Phil all right it is very tempting to blow up your budget with gifts and entertainment and travel and what happens is you start to convince this significant person in your life that that's your lifestyle so then you're being really surprised huh if you get married to them in that eight your lifestyle you're back to the pizza parlor that can create problems so don't let too many weekend getaways take away your ability to demonstrate who you really are gonna be in your future guys you know you do this so make your expectations really clear from the start live your lifestyle with the person you expect to live your lifestyle with and don't fake it bunch of fakers and you're going to avoid a lot of fights over money in the years to come fifth pain of fortune and credit card bills there's no reason to do that that's the reason so many people think credit card debt is the worst debt ever that's because it is and so many people are stuck in it credit cards are definitely easy to access these days even if you don't have a solid income or good credit they love to have you jump in there you subprime borrowers this means that you might have a few monsters lurking in your wallet from your college days with interest rates higher than you can get with really good investing don't do that every time you spend money on a credit card and you don't pay it back at the end of the grace period you are paying with your investment capital for the convenience of spending money it can be very tempting to open a new credit card once you match the other ones out I have done this and all the while more of your budget gets eaten up with interest payments it's a dangerous game you better not play it there's an easy way to stop the cycle just keep your budget less than your income Oh duh and stick to it and don't open new credit cards alright finally not investing huge mistake although some people are putting a lot of emphasis on short term investment gains getting to your goal of financial freedom is not a sprint it's a marathon the earlier you start the more you can accumulate so beginning investments and beginning with planning for financial freedom is all about the balance between paying your expenses eliminating current debts and always setting aside money that can help you get to your goal of having the life you want life moves really really fast and you do not want to lose track of your opportunities you're gonna have many of them and investing now gives you decades to pick up skills and confidence and watch your money grow you've got to get to it as early as you can in your 30s man I'll tell you what I would do doing it over again actually I did pretty good the first time around keep the belt really tight always pay yourself 10% of your income first and live on the rest of it including taxes 10% every single paycheck goes into your investing portfolio now I'd love to hear from you have you fallen for any of these money traps and regretted it ah okay yeah so leave a comment below with your answer maiya Kulpa us and I'll be sure to follow up with you thanks for watching now go play you guys if you enjoyed this video and you feel it was valuable and teaching you more about money traps to avoid in your 30s hit the like button and please share this video with your friends they need it worse than you and if you want more investing content subscribe to my channel and don't forget to click the button on the screen for a free gift thanks again for watching time to go play

Channel: Phil Town's Rule #1 Investing

Views: 2,559,025

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Keywords: money traps to avoid, 6 money traps, money traps, money traps to avoid in your 30s, money mistakes to avoid, investing in your 30s, money trap, financial mistakes, money mistakes, phil town, money management, how to invest, value investing, saving money, live below your means, stock trading, investing 101, manage finances, wealth management, how to start investing, save money, how to save money, personal finance, how to invest money, money tips, real estate

Id: Cdg_ikXHS44

Length: 9min 58sec (598 seconds)

Published: Thu Sep 20 2018