How to Retire in 7 Years Starting w/ $100 [The Rule of 200]

hey everyone me kevin here in this video i'm going to talk about what you need to retire early how fast you can retire and we'll do that starting with just 100 i'll also introduce a brand new rule to you quick note though many of you might not know this yet but i've been holding small voice only chats with many of you and a lot of you have been loving them if you'd like to join those voice-only group chats where i can help sort of mentor you with any questions that you have about business or money or finance or whatever i encourage you to check out the links to the programs down below you'll find the link to the voice chats right next to the link for life insurance which you can sign up for in as little as five minutes and two free stocks with weeble as long as you deposit just one hundred dollars okay let's get started the easiest way to determine how to retire is to determine how much money we need to retire think of it kind of like making a goal so i want you to ask yourself how much monthly income not considering taxes do you need to retire we'll worry about taxes and all that stuff later for now i just want you to ask yourself hey based on what i'm making today can i retire with three thousand dollars per month can i retire with five thousand dollars per month or do i need ten thousand dollars per month maybe i want ten or twelve or fifteen thousand dollars per month because i want to live gildedly whatever the monthly amount is that you desire i just want you to take that number and multiply it by 200 and that's it so that is the amount of wealth that you need to create in order to retire now this video is of course for entertainment purposes only so always consult a professional who knows your personal situation better than i do but this video might help you get started so let's try it together let's go with five thousand dollars a month five thousand dollars times 200 is a million dollars okay so we need a million dollars of wealth to be able to retire now multiply that one million dollars by six percent that's what i'm using as our rate of return on our invested money well that's going to give you sixty thousand dollars of annual income divide that by twelve and you get five thousand dollars per month and there you go the rule of two hundred tells you exactly how much wealth you need to be able to retire so that when invested and as long as you're investing at six percent you don't have to work anymore now i know you might be asking questions like wait a minute kevin wait a minute where am i gonna get a six percent rate of return and the reality is that options exist if you search for them and if you're more comfortable using a different percentage you can manipulate these numbers however you'd like you take the monthly number divide it by the percentage and then multiply it by 12. that should help you accomplish your own sort of metric for retirement although the rule of 200 tends to work at least right now look for example at at stock a t stock will pay you seven percent as a dividend so if you invest one million dollars with att they will pay you 70 000 per year for doing nothing that's making money while you sleep literally doing nothing no tenants no toilets no property managers nothing but unfortunately this is the part where most of us get stuck it's not realizing that there are two parts or sort of two phases of life and that's okay because schools don't teach us this see there's a building part or a building phase of life and then there's an enjoyment phase of life once you reach your goal target that target that you're writing down on a post-it note hopefully that wealth target once you reach that wealth target you can decide to stay in the building phase if you want or you could choose to retire at any point the choice becomes totally yours and once you retire you shift to the enjoyment phase and basically the retirement phase unfortunately because we aren't taught these two parts we usually never realize that there is a point in our lives where we do have the option of retiring as long as we were on the right path and we were actually building instead most of us we go to our jobs we try to save some money we try to stay out of debt when we can but you know crap happens and then you know maybe we can get some miscellaneous cash flow coming in but for some reason we never seem to get closer to retiring why because we don't realize that there's a point that we're trying to work towards and by now realizing that point and again it's not your fault it's schools that don't teach us this we never really accomplish it so let me ask you this let's go a different way and then we'll get into some more of the nitty gritty here what's your net worth today your net worth is all of your assets minus your debts right let's say it's twenty thousand dollars maybe it's fifty thousand dollars we'll multiply that by six percent and divide it by twelve that is if you take all of your net worth and invested it today how much money would you make per month well if you had a fifty thousand dollar net worth times six percent divided by 12 that would give you 250 dollars per month yay 250 of a month of cash flow but guess what you can't retire instead you're getting 250 per month and while you're programmed to say things like well don't worry kevin i'm gonna reinvest this 250 dollars per month the reality is most of us don't so instead of focusing on where can i get the next 50 a month of cash flow where can i get the next 100 a month of cash flow and then aimlessly trying to go through life without that target in mind right the target and your goal becomes a wealth target i recommend you put it on a sticky note and put it somewhere you're gonna see it every day put it above your toothbrush and then every single day ask yourself what did i do today to build my wealth are the actions that or and the decisions that i made today if you brush your teeth at night or yesterday if you brush your teeth in the morning in line with me building my wealth and if not what can i do to change that so do this right now write down the monthly income amount ignore the taxes on a piece of paper and we'll talk about taxes later multiply that by 200 and then the result you get put it on post-it note and stick it somewhere now notice we're not talking about building our cash flow during the building phase we're gonna have cash flow in the retirement phase but wait wait i just said don't worry about cash flow and i know i might lose some of you so let me explain that let's clean the slate for a second remove all thoughts that we have about cash flow and passive income and all that and ask yourself this when you're not retired do you need passive income to survive that is when you're working anyway do you really need the passive income to survive the answer is probably not and in that case you should probably focus on your wealth but what usually happens when we get cash flow well there are two problems that happen with cash flow one is when we get cash flow and we're still working most of us kind of see that as bonus free money we're not really thinking of it as our retirement money that is coming into our checking account so we get like fifty dollars or two hundred dollars maybe a month of cash flow and it's like sweet someone was spending money i'm gonna buy myself you know some new shoes i'm gonna buy myself a dinner we're gonna reward ourselves for working hard or you know what how many of you have heard this phrase i only let my passive income pay for all the fun stuff that i want so that way my passive income is paying for my car and my toys and my vacation and all that kind of stuff like look that's great that's cool but for most people that just means they're robbing themselves of their retirement so frequently we create cash flow and then at the same time we also create more expenses so we're increasing our standard of living the more cash flow we get that's totally the opposite of cash flow most of us who are getting cash flow now we're supposed to reinvest this so that we can keep growing our portfolio right but instead we tend to trick ourselves into spending more money this is dangerous but it's not the only dangerous thing like let's say you were disciplined and let's say you're like kevin that is not a problem for me fear is not a factor for me i will not use that cash flow i will reinvest all my cash flow in fact i turned on automatic dividend reinvesting with my stock trading platforms like robinhood or whatever well cool but what also happens while you're working and you receive cash flow what's the second problem when you're working and let's say you make your first fifty thousand dollars a year at your job cool that goes through the tax brackets and you get taxed but then you make extra money you make extra cash flow that gets tacked on to the end and it usually gets taxed at your highest personal income tax rate with the exception of certain investments like some dividends but usually shorter term dividends still get taxed a lot higher than long-term capital gains don't worry so much about that right now just know that if you make money and then you make cash flow on top of that your cash flow usually gets taxed at a high rate and let's say that rate's somewhere around 35 but you're saving for retirement right you've written down your goal you're saving for retirement you're getting a bunch of cash flow so you get a hundred dollars of extra cash flow and you're disciplined and you're going to reinvest it but wait you receive the hundred dollars but because you received it you have to give 35 to the government in taxes now you're only left with 65 to reinvest so you actually just made it even harder for you to get to your wealth figure you're better off telling that dividend company during the building phase of life keep the dreaded dividend just make the company more valuable because that's going to increase my net worth faster and it's going to prevent me from having to pay taxes now i don't want to pay taxes now we'll figure out how to deal with taxes later and we'll talk about taxes later in this video but instead now i want you to focus on well how can you focus on retirement and building wealth because when you're building your wealth your goal is not to pay taxes on that wealth for example let's say you put money into tesla stock at 750 and then it doubled to 1500 you're not paying taxes on that gain your wealth just went up and you're not paying taxes on that game again we'll talk about taxes later when you buy real estate below market value you're not paying taxes on that increase in net worth people ask me all the time kevin should i invest in real estate for cash flow or should i invest in real estate for my net worth and it depends and you should know watching this video what does it depend on it depends on what phase of life you're in if you're in the building phase of life you invest for wealth if you're getting started you invest for wealth not cash flow because cash flow is going to get eaten away with taxes and mismanagement and the likelihood that you're going to feel wealthier and when you feel wealthier you increase your spending and you increase your standard of living okay now when do you go for real estate cash flow and stock cash flow retirement face so let's talk about starting when it comes to starting with a hundred dollars what should you do i mean after all let's be real we're not going to retire on a hundred dollars right but we can use this hundred dollars to get us started because even if you're starting slowly you're a step ahead of everybody else who isn't starting and life isn't a game of relativity life is a game of not comparing yourself to others even though that happens life is a game of trying to figure out how you can get to that point you build bill bill bill bill boom ding you hit the red bill oh yeah enjoyment phase right that's the goal and so the first thing you should do with your first 100 well if you haven't done this yet you should really do this is number one write on a post-it note the wealth amount you need that's not going to cost you a lot from your 99 or 100 i mean even if it costs you a dollar you'll have a 99 left right so write that number on a post-it note really like i know that sounds crazy it's like seriously is this just like some motivation video we're going to talk details here in just a moment as well you know more than what we already have but writing that number down whether you believe in like the secret or whatever looking at that number every single day and asking yourself am i on track is going to help you make it happen now number two i want you to take your first leftover 100 whatever you have you know maybe it's 99.50 because you had to buy a post-it note and invest it into something that is going to build your wealth okay that's the only rule build your wealth not cash flow wealth okay how do you build your wealth well a few different ways you can do that you can invest 100 into your education because your education into maybe becoming a certified financial planner or a real estate agent or a licensed contractor instead of a handyman or a loan officer or maybe you're going to go to a coding boot camp these are things that are going to increase your capacity for making more money which making more money is going to enable you to build your wealth faster because you're going to have more money to invest grind now play later right so education's a good one you could also buy your first stocks if you haven't yet you could go to for example m1 finance you could look at the little portfolio i put together the other day go to metkevin.com 1337. look at the top stocks there and pick some of the quality ones or invest in that pie at 46 stocks put that hundred dollars to work if you don't believe in the stock market try it it's a hundred dollars put it in see what happens get your feet wet or maybe that hundred dollars is going to go towards paying off your credit card debt so you can finally and again maybe not paying off everything but you're starting on that path so that you can finally start qualifying to buy your first home and actually building wealth remember the net worth of tenants is on average five thousand six hundred dollars the net worth of homeowners on average is 196 000 why is that well it's because homeowners own assets and so you gotta get on that train of building wealth and so what's the absolute fastest possible way to build your wealth like let's say you got a job you got most of your debt paid off and you know now what like how do i build my wealth like you you feel like your paycheck to paycheck but you can save a little bit how do you build your wealth the easiest way to build your wealth in america is taking advantage of the fact that you can buy a house for five percent down or as low as three percent down and you're looking for eighty thousand dollar golden tickets and that means every time you go buy a house and you go move into it and live it you do some paint and carpet and a little bit of fixing up your net worth went up eighty thousand dollars more because you bought a property that was maybe a little stinky and needed a little bit of work and cleaning up you were willing to put that grind and that effort in it's not that big of a deal if you think about it paint and carpet any of you all watching this video can do paint carpet and every time you buy real estate you make a gold of instantly seeing your net worth go up by 80 000 because you're buying real estate below market value i'm not asking you to focus on cash flow right now i'm asking you to focus on wealth because remember wealth building phase hit the red bell boom go to cash flow all right so if you have a goal of 5 000 per month of cash flow when you retire that's a million dollars of net worth and if you're serious about creating a million dollar net worth becoming a millionaire one of the easiest and fastest ways to do it is by buying real estate i did it in under seven years before youtube before i had a single subscriber on youtube okay that's not true i had like 13 subscribers on youtube for like the first seven years of my career okay but anyway i did it in seven years before i had any even dollar of income coming in from youtube and i became a millionaire by working hard and grinding hard but taking all of the excess money that i had and plowing it into real estate and stocks that's how i did it i focused on building my wealth first you can see the story of my net worth in the link down below you can see that before youtube i went from like no net worth a few thousand dollars to a net worth of over two and a half million dollars that's before youtube because i see the cynical comments like kevin sure it's easy for somebody making youtube videos and getting you know thousands of views to make it and do it well well how did how would you do it without that well i did i did do it without that and so for most of us if you write down a goal of let's say a million dollars or maybe you write down and say you know what i could do it with less i'm going to write down a goal of getting to a net worth of 750 000 most of us can achieve this within 10 years by leveraging our jobs and safely buying below market value real estate that is going to increase your net worth that would give you what you're looking for and remember there are plenty of opportunities to figure out where to invest your money to get that 7 dividend or the 6 dividend or the five percent dividend whatever you feel comfortable with but you have to get wealth first like why are we going to make a video talking about all the ways you can get passive income when a real reality that's talking to people who already have a net worth right realistically we should be talking about that when you have a net worth of two hundred fifty thousand dollars five hundred thousand dollars a million dollars but we gotta get that net worth first and that's what this video is about so so far if you've liked this video we're gonna talk about taxes here but if you've liked this video so far could i ask you to share it with somebody that you care about i think this video could have a really big impact on your friends and family and i'd love it if i could ask you to share this video with them now how do you prevent paying taxes well this gets a little bit more complicated and obviously you should always consult your cpa and your professionals but i'm going to give you some quick ideas here the united states wants you to invest and because they want you to invest they also reward you by helping you prevent paying taxes and you learn more of the tricks of the trade again when you have wealth like when you hit the bell and then you look around like all right let's figure this out you know then you have options you have options like the doors open up when you have money it's hard to open doors if you don't have money yet so you got you start on the building phase that's the whole point of this video but let's quickly talk about the tax thing just to make sure we got some of your motivation uh properly aligned number one if you own real estate you can 1031 exchange your real estate into cash flowing opportunities so you can take your wealth building assets and turn them into cash flowing opportunities in the future it's more complicated we'll talk about that later but that allows you to buy and sell real estate without paying any taxes on the amount of money that you've built crazy anyway number two this is what a lot of people do once you're ready to hit that bell like after your earning years or whatever and you built a lot of wealth or whatever you're ready to retire you want to go travel the world or whatever you know what a lot of people do they move to a low or no income tax state and then they sell their high quality stocks and they move them over to dividend stocks think about it i'm in california i made a lot of money on tesla stocks but if i sold my tesla stock i would have to pay somewhere around 50 in taxes that sucks now if i held it long term i'd probably be paying somewhere in california around 35 percent in taxes that also sucks but if i hit the bell retired moved to nevada i lived there for a few years i established my residency there and then i slowly started selling off my tesla stock i would only be paying 15 in taxes you know tax law can always change so again run this by your cpa but i'd only be paying 15 so now it's easy now it's easy to move my wealth over to the dividend once real estate allows you to exchange to where you pay zero in taxes stocks they're going to get you all right but by 15 it's not that bad so there are many tricks but for now i want you to focus on building wealth if i can do it you can do it i believe in you but there are a few warnings that i want to give you actually there's really one major warning that i want to give you but first i do want to mention this if you like this video make sure to check out the money and finance course down below it teaches you all about the psychology of building wealth through investing and it teaches you about money even if you know nothing about money if you don't know anything about stocks if you don't know anything about real estate it gets you started now it's like 88 complete so there's still courses and lectures that i'm working on in fact what i'm going to do is i'm going to incorporate this video into the money course with a preface and an ending and the preface and ending is going to be additional content that would make this video too long for youtube but will give you extra additional and very useful insight so check out that program down below and if you're in the money course check out that lecture it'll be posted by the time this video is posted on youtube now what i want you to remember and always remember this is do not let cash flow manipulate you cash flow is like like the the succubus that comes in and looks beautiful and sucks you in with with their beauty and then then they're well they're succubus it's a bad thing i don't know if you played world of warcraft in world of warcraft they kill you okay in your sleep anyway you don't want to let that cash flow suck you in and manipulate you because then the odds are you're going to spend your way out of ever being able to retire so keep these things in mind follow the steps in this video and folks i cannot wait to see you in the next video

Channel: Meet Kevin

Views: 1,171,997

Rating: 4.8982477 out of 5

Keywords: retire, retire early, wealth, money, passive income, cashflow, real estate, stocks, wealth building, building phase, build phase, target wealth, wealth target, return on investment, retire with 100, tipping point, wealth tipping point, wealth point, saving money, debt, cash, passive income cashflow, real estate investing, dividend investing

Id: 8iJ5CdgqXUw

Length: 21min 13sec (1273 seconds)

Published: Sat Jul 11 2020