you won't become rich until you understand this these marbles represent all the millionaires in the world how many of these people do you think earned an average of $100,000 a year during their careers well according to a national study of millionaires by Ramsey Solutions just 31% what's even more shocking is that in the same study it was revealed that 79% of millionaires didn't receive any inheritance at all from their parents or other family members so what is it that Us Secret millionaires know that most people don't and how can you become one of us well there are four important questions you need to ask yourself once you can answer yes to these questions you're on the right path to becoming a millionaire even on a low salary let me [Applause] explain so when it comes to your finances there are only two levers that you have control over your income and your expenses this looks pretty simple right well the facts say the opposite as more than half of Americans earning over 100,000 a year are still living paycheck to paycheck as their expenses are just too high it doesn't really matter if you're on a high or low salary you just need to be able to work these levers correctly in order to create positive cash flow let's play a little game do you think an 18-year-old that has a positive cash flow of $250 per month will retire a millionaire yes he'll actually be worth around $1.1 million how about a 25-year-old with a positive cash flow of $500 a month yep they would be worth even more at a whopping $1.3 million okay here's the last one a 50-year-old with a positive cash flow of $33,000 per month actually no they' get very close but they only make it to about $950,000 this shows why it's so important to start thinking about this this stuff while you're young these calculations were based on three different factors one their positive cash flow is saved every month two they get an average yearly return of 7% on their savings now you won't get this from a savings account but it is the average return of the S&P 500 we'll get into that later and three they retire at 65 years old so what is the best lever to focus on to create positive cash flow well let's first talk about your expenses I know it's not sexy but if you start using one of those money tracking apps you'll probably be shocked at how many tiny payments are going out of your account each month just think about all those subscriptions you don't even use those alone may add up to over $30 a month I'm not saying to councel the stuff you actually use just the things you don't really care about one of the biggest Financial burdens for most people is high interest debt particularly credit card debt it's crucial to eliminate this debt as soon as possible imagine if I I told you you could invest and earn a return of 27% per year you'd probably laugh at me but credit card companies charge you this crazy interest rate year after year so stop allowing them to drain your finances and start using credit cards to your advantage pay off your balance in full each and every month improve your credit score and earn points that can be redeemed for free flights most online gurus would stop there and not even talk about the other lever but this one this is my favorite I've not always been the best at saving I didn't go silly when I was younger but I did have a pretty awesome life I traveled the world I learned to fly airplanes raced cars and provided a great life for my family I can do this because I have a talent for effectively leveraging the income lever I highly recommend that you also spend more time using this lever unlike counting the pennies the potential to earn money it's unlimited question two do you split your income strategically did you know that a surprise in 49 9% of people earning more than $100,000 a year have no money left at the end of each month the truth is Building Wealth has a huge component that most people are completely unaware of and that's the income split strategy this is how I suggest you split your main income source for most people this will be the money you earn from your job now ideally you want to be spending 50% on your basic needs these are the things that are essential for your survival and no I don't mean your Netflix subscription these expenses include housing utilities food transportation and Health Care obviously these do depend on your personal circumstances however it's important to be very honest with this as the only person you'll be cheating is yourself next you want to be spending 30% on your wants this includes things like eating out getting the latest video games and going to events with your friends this is the category that most people don't limit and this is a huge mistake even though I ow Millions every single year I still limit the percentage I spend on the stuff I want I know that if I want more then I need to make more and not use a higher percentage of my income on these things that's because the most important part is the last 20% this should be invested I've heard others use the word save but I have a real problem with that too many people save money to buy something like the latest iPhone or a vacation away with their friends this isn't what this 20% is for investing is very different from saving because the goal is to buy assets that go up in value or generate passive income or ideally both this can include investing in skill development stocks and shares time pieces and real estate using this method it's very possible to turn a small salary into millions but it can be incredibly slow we're talking decades that's why I think you should take things one step further and build an additional income stream by starting a side hustle starting a side Hustle hustle is powerful because once you have the right income split you can invest all the excess money it's like pouring gasoline on a fire it speeds everything up if you invest this extra side hustle income and get an average annual return of 10% then each dollar you earn now will be worth $445 in 15 years it's truly the key to supercharging your earnings so question three do you have a side Hustle but Mark why should I have to to start a side hustle when I already work a full-time job my boss should just pay me more well if you're earning a low salary there are only a few reasons why this is the case the first could be your job isn't perceived as valuable and the second is you might be getting taken advantage of most people think they're being taken advantage of by the system you know the ones that moan about their bosses and always seem to be the victims but in reality this is only the case for an extremely small amount of people if you're really really being paid unfairly then look for another job now for everyone else if you aren't generating enough value in your job then you need to do it through a side hustle if you're really serious about growing your wealth for most people with N9 to five jobs I'd highly recommend working as a freelancer I mean let's say you have an office job in marketing on the weekends you could share your knowledge with small businesses looking to grow their customer base in return for a fee now there are multiple ways to charge the most common is for your you could charge anywhere from $30 to $200 an hour although I personally don't like this idea as you're already selling your time at your normal job instead it's a much better idea to sell results for example I might approach a business and offer to help them expand their reach on social media in return I'd request a percentage of the sales for every customer I bring in this way both you and your client benefit and your potential income is unlimited but what if I have have no skills well bloody going and learn one any of these are due just imagine if you could create an additional $1,000 per month if you were to save that money and earn an average return of 7% per year over a span of 28 years you would accumulate an impressive 1, 38,6 188 this substantial amount is generated solely from the extra money you've created in your life so question four is your money working for you now I can already see the comments this is crazy what savings account will give me 7% per year this old man he's lost his marbles look I completely agree with you that's why this whole video comes down to this last point you need to start investing the average annual return of the S&P 500 over the last 10 years has been 13.6% although this is slightly higher than the average over time no one has ever lost lost any money if they bought and held an S&P 500 Index Fund for more than 20 years the key is to open the correct type of account you'll often hear people throwing around the terms rough IRA in the USA and stocks and shares Isa in the UK If you don't have one of these accounts then you're really missing out as they allow you to avoid paying taxes on your Investments but they do have limits because they're so powerful but where can I set up these accounts well there are multiple different Investments apps a great thing about most of them is they actually give you the ability to buy fractional shares so rather than having to pay $190 for a share of Apple you can invest as little as $1 one of my favorite investing platforms is trading 212 since I was planning to talk about their app anyway I reached out to see if they'd be interested in sponsoring this portion of the video they agreed and are also offering a free stock worth up to £100 to anyone that uses the code Tilbury when they create an account to buy the S&P 500 Index Fund that I just mentioned search for Vanguard S&P 500 ACC this stands for accumulation I'm not a financial advisor but it's pretty much that simple you can even set a monthly amount to invest automatically of course Investments can go up as well as down but this strategy has made me Millions over the years if you want to have an even more Diversified portfolio then you can also have a look at pies and I'm not talking Mama's good old apple pie mind you that is a pretty good pie this lets you see how other investors have allocated their money into different stocks you can track the performance of the pie over time and you can even copy and paste someone else's pie and invest in the same split with just one click of the button if you wanted to invest $100 into that pie then it would be split amongst the various allocations that the pi creator has chosen even after listening to this if you feel unsure about investing then you can always just keep your money in trading 212 and earn interest they have some pretty pretty good rates as a record in this video they're offering 5.1% On Us doll 5% on the Great British pound and 4.2% on the Euro along with other currencies so if you live in the UK or Europe it's worth trying out trading 212 because signing up is completely free and there's no commissions of course don't forget to use the code Tilbury and you'll receive a free share worth up to £100 or alternatively click the link in the description to sign up and see exactly how to access the free share if you got to this point in the video let me know in the comments how many questions you said yes to if you want to know exactly how I pick my individual stocks then you can check out this video next but don't click on it just yet make sure to subscribe if you want to grow your wealth okay I'll see you over there
