If You Have $1000 In The Bank, DO THESE 5 Things!

this 100 build doesn't have more skills than this 20 bill does it just has more power you're gonna find that you have subscription services that you do not need anymore chipotle has to declare bankruptcy because of all the lawsuits they have to go through because of the bad guac what's up everybody i am jasperi singh from the minoritymindset.com where money minds rethink rich if you have a thousand dollars in the bank right now and you're trying to figure out what to do with this money you are in the right place because in this video i put together some of the best clips that will show you what you should be doing with this one thousand dollars and how you can attract some more money so let's get into it passive income is the holy grail when it comes to wealth building because now you are earning money while you sleep this is what wealthy people spend all their time building they want passive income we all only have 24 hours in a day and you don't want to spend 20 of those 24 hours working you want to have your money working for you and this is what passive income is all about you take your money you throw it somewhere and now your money money's out making you money 24 hours a day while you're sleeping while you're on the beach and while you're watching youtube videos once you start investing for passive income it becomes addicting like you might just start off by getting a hundred dollars in passive income one year but the next year your goal might be how do you make a hundred dollars in a month then the year after that it might be how do you make 100 a week then after that it might be how do you make a thousand dollars a month you can get this type of passive income by investing one of two things you can either invest your time or your money you can invest your time into building this money-making machine like let's say a guacamole business that you can eventually walk away from that will continue to pay you or you can just throw your money into this money-making machine and have other people work to grow your money and pay you obviously the easier option is just to throw money at this money making machine because now you don't have to do any of the work but you do have to put in the time to get that money in the first place one of the biggest myths that people have when it comes to this type of passive income is that you have to be very wealthy or have a ton of money in order to get passive income but that's just not true i mean if you have more money then you can get more passive income but you don't need a ton of money to start investing for passive income that's why in this video i'm going to be going over 10 ways you can start seeing this passive income in your bank account right now with just a thousand dollars the first seven ways i'm going to be going over are completely passive these are things where you can just throw your money at something and then every month or every year every quarter you're gonna have money deposited into your account and the last three ways are suitable passive income which require a little bit of work up front but they can earn you a whole lot more passive income in the back end the first way you can get this type of passive income is by investing in dividend stocks when you invest in stock you are buying ownership in a company like if you go out and you buy just one share of the mcdonald's stock you are one of the owners of the mcdonald's corporation now you're only going to own like one 745 millionth of the entire corporation but you are still one of the owners of mcdonald's some companies like mcdonald's pay their owners their shareholders people like you dividends which are cash checks just for investing in their company when a company has a bunch of cash in their bank account at the end of the year there's three things that they can do with this cash they can save this money for an emergency they can invest it into their future so they can invest in more stores they can create new products or they can pay their shareholders one of the ways that they can pay the shareholders is through a dividend which is passive income for you so if you go out and you buy one share of the mcdonald's company then every three months every quarter mcdonald's is going to deposit a little bit of cash into your bank account this is your dividend your profit share check into your account just because you are one of the shareholders or owners of mcdonald's let me give you an idea of what this is actually going to look like with a 1 000 investment because i think there's a lot of misconceptions out there on how passive income works because you have all these people on instagram and facebook talking about hey here's how you can make 10 000 a month in passive income by doing nothing in 60 days that's a big lie by the way so let's go over how passive income really works mcdonald's pays a 2.4 dividend yield that means if you deposit a thousand dollars into the mcdonald's company today over the next year you can expect to make about 24 in passive income from mcdonald's ibm pays a 5.5 dividend yield which means if you deposit a thousand dollars into ibm over the next year you can expect to make something like 55 dollars in passive income and a t at the time of me recording this video is paying a seven percent dividend yield which means if you invest a thousand dollars into a t the company they will pay you about seventy dollars in passive income over the next year now twenty four dollars or seventy dollars is not life changing money this is not going to buy you the dream car or that fancy vacation or the private jet that everybody's talking about on social media but it's a start 24 is better than no money because if you didn't invest this money in mcdonald's and you spent this thousand dollars at mcdonald's you would be left with nothing except a very bloated stomach right but if you're investing this money into the mcdonald's company at least you make it 24 in passive income which you wouldn't have if you didn't invest it into mcdonald's plus you have to understand that you're investing into companies like you're investing into mcdonald's or ibm or at t and your goal with these investments is to see these companies grow so if mcdonald's is making more money their stock price is also going to go up which means your investment value also went up now if mcdonald's is making more money in the future then your dividends are going to go up as well which means you're going to be making more money and passive income so if you really want to win in this game you got to consistently keep investing in strong companies that way you can build wealth by owning a large share of a company and that way you can make money as the company makes more money so before i go on to the second way you can make money through passive income let's make sure our expectations are clear a thousand dollar investment is not gonna make you a millionaire overnight okay a thousand dollar investment is gonna make you some passive income but it's better than no passive income and it's the building block to help you build that wealth that way you can get that financial freedom that you're looking for the second way you can get this type of passive income is by investing in reits which are real estate investment trusts i discovered passive income when i became a real estate investor because when i bought my first real estate investment property this property paid me something like a couple hundred dollars a month in profit every single month and this was money i didn't have to physically earn this was money the tenants had to pay me because they were limit in my property i love real estate investing as a way to generate passive income but there's a couple downfalls that come with real estate investing first you need a lot more cash because you have to buy physical real estate and second you have to deal with tenants if you're investing in real estate you're going to have tenants that slip and fall while they're taking a shower and then they're gonna sue you because they will say that the bathtub was too slippery when it was wet this has happened to me if you invest in real estate you are gonna have tenants who are cutting cucumbers on their countertops and then they're gonna call you crying because they miss the cucumber and they slash the countertop and they're gonna demand that you buy them a new countertop that has also happened to me now you can hire a property manager that way you're not super hands-on involved in your real estate investments but if you don't want to deal with the headache of investing and owning your own real estate properties the next best thing is by investing in a reit a real estate investment trust because now you're investing in a company that invests in real estate the interesting thing about reits for you is that they are required by law to follow something called the 90 rule which says that they have to distribute 90 of their taxable and come to you their shareholders through dividends what that means is now you can go out and invest in a reit on the stock market so this reit is a company that invests in real estate you invested in this company and now this company is going to invest in real estate now anytime this company makes money through their rental income they have to distribute 90 percent of their profits to you through dividends so if i diagram this out this is you i'm gonna draw you a nice mustache and if you go out and you invest in this reit this reit is a company that invests in this real estate now this real estate let's assume this is an apartment complex these tenants are gonna have to pay your reit this company rent and then this rate is going to have to pay their expenses and pay their bills and then out of what money is left they're going to take 90 of this money and they're going to distribute this money out to people like you shareholders through dividends let me give you a couple examples so you know what to expect when it comes to returns i'm not telling you what to invest in in this video i'm just giving you examples that way you can get an idea of how this type of passive income investing works and while i'm at it with the disclaimers i should also tell you that investing has risks you are never guaranteed to make money when you invest you might even lose money so always always always do your own due diligence and never blindly listen to a random guy on youtube spg is simon property group and this is a company that invests in a lot of mixed use and major property developments throughout the united states and they are paying a six and a half percent annual yield so if you invest a thousand dollars into this reit you are going to get 65 dollars back in passive income without doing anything and you also don't have to deal with any tenant issues because your reit the company is gonna deal with that headache so you're investing in a company that's investing in real estate and your company is doing all the work and all the headache and all the management stuff with the real estate you're just getting that passive income nli is anti-capital management and they do something a little bit different so they don't actually own the physical real estate properties they own the loans they invest in commercial mortgage-backed securities and they pay an and a half percent annual return so if you go out and you invest a thousand dollars into nly you will make about 115 in passive income while doing nothing while this company does the work and the bigger the dividends get the more risk there is so these are things you want to keep in mind at this point what a lot of people start doing is they start googling how to find the highest dividend yielding stocks and then they just invest in companies that are paying the highest dividends as somebody who did that during his college years let me give you a little bit of a warning you should never solely make your investment decision based off of what dividend a company is paying because that dividend yield can be very deceiving let's say you want to invest in this hypothetical company that is trading for a hundred dollars a share and they're paying a five percent annual yield so if you invest a thousand dollars into this company they'll pay you 50 if you invest a hundred dollars into it they'll pay you five dollars over the next year now what you want to pay attention to is how strong the actual company is because let's say this company starts to do really bad they start losing money and they're on the verge of bankruptcy and this stock tanks in price they go from 100 a share to 20 dollars a share because they're doing really bad financially at this point if they have not adjusted their dividends yet it will look as if they're still paying this five dollar annual yield right this is how much money they were paying here and assuming they haven't adjusted their dividends it will look like they're paying a five dollar annual dividend for a 20 share price of the stock that is what a 25 return on your money so people might look at this and say wow this company is amazing they're paying 25 a year on my money but what you don't understand is that this company might be on the verge of bankruptcy so yeah you might make a little bit of dividends but then next thing you know this company could go bankrupt or if they don't go bankrupt they can also cut their dividends to zero and now you are owning a company that is not really doing anything this is why it's very important before you start investing in companies for the dividends that you're analyzing their financials and you're analyzing the fundamentals of a company that where you're investing in a company that you want to own that is going to be more profitable in the future than it is today and if this is very overwhelming or if you don't want to do this or if you don't know how to do this then you might want to consider looking at three index funds with an index fund now you don't have to find the perfect company to invest in you can invest in a fund or a group of stocks which give you exposure to a bunch of different stocks and now if you're investing for dividends as passive income you can invest in a fund that is giving you this passive income there's a few ways you can go about this one thing you can do is invest in a fund like voo that's going to give you exposure to the general stock market so voo invest in the top 500 companies in the stock market so if you invest in vo you're getting exposure to the top 500 companies in the stock market at the time of recording this video voo is paying a 1.75 dividend so if you invest a thousand dollars into vo today over the next year you can expect to make something like 17 18 and passive income from dividends again this is money you're making by doing nothing except just throwing your money into this fund and you also have exposure to the top 500 companies in the stock market so the goal is also this year thousand dollar principal your investment go up in value as well vnq is the vanguard index fund for reits so if you want to invest in wreaths and get exposure to real estate but you don't want to do all that work to find the best read to invest in and risk your read going bankrupt one thing you can do is invest in vnq because this fund gives the exposure to a whole bunch of different reits at the time of me recording this video vnq is paying 3.85 a year in dividends vym is the vanguard index fund that gives you exposure to high dividend yielding companies so if you want to invest in companies that are paying high dividends and you don't want to go out and find all these companies you can just invest in a fund like voim which invests in high dividend yielding companies at the time of recording this video vym is paying 3.62 percent a year in dividends again these are not life-changing amounts if you just invest a thousand dollars but it's the foundation to building wealth that way you can create a whole new passive income stream because this is money you're making without doing anything you just throw your money into these funds and then your funds are investing in companies which are doing the work to earn your money and this is what you're making without doing anything if you are interested in learning how you can grow this type of passive income even quicker stay tuned because i'm going to be talking about how you can amplify these things by doing something called pseudo-passive income investing but i'll get to that in just a little bit also if you ever want to learn more about how to invest in stocks or passively invest your money we have articles on this on our website the minoritymindset.com and i'll also link it for you in the description below the fourth way you can get passive income is by investing in crowdfunded real estate investing in crowdfunded real estate is similar to investing in a reit where you're investing in a company that invests in real estate but now with crowdfunded real estate you're actually investing into a fund that gives you direct exposure to the real estate itself you can't invest in crowdfunded real estate on the stock market you have to go through a third party platform which gives you exposure to these real estate investments this would be using something like fundrise and on their website it says that the historical returns for the last number of years has been something like eight to twelve percent a year now this eight to twelve percent figure is not just the amount of passive income you're getting this is the passive income you're getting through dividends and it's also depreciation in the property so the way this works is you are investing directly into a fund and this fund mimics the returns that a real estate property or a group of real estate properties is getting so if these real estate properties go up in value your fund goes up in value and if these real estate properties make money through rent then you make some money through rent as well this is what your dividends are again with this type of crowdfunded real estate you're not the one going out and finding real estate deals you're not the one going out and finding tenants you're not the one managing tenants or paying the bills you're just investing into a fund that gets exposure to this real estate and there's other people that are doing all the work and as these real estate deals make money so do you so this is an easy way for somebody to get exposure to real estate and get passive income from real estate without actually going out and spending hundreds of thousands of dollars or millions of dollars buying physical real estate investments if you are interested in learning more about how crowdfunded real estate works and how you can invest in real estate we have articles on this on our website the minoritymindset.com and i'll also link it for you in the description below the fifth way you can earn passive income is by being a banker without actually being a bank the way this works is you find people who want to borrow money maybe they don't want to go to a bank to borrow money or they can't qualify to borrow money from a bank and so you can lend money to these people and in exchange for them borrowing your money they will pay you interest every single month just like you have to pay the bank interest if you borrow money from the bank the interesting thing about this is that if somebody can't qualify to borrow money from a bank they're gonna have to pay you higher interest to make up for this higher risk there's a couple ways you can go about doing this i mean you can find somebody who wants to borrow a thousand dollars but then you're gonna have to create all the paperwork and manage the investment which is a lot of time and a lot of paperwork which isn't very passive or you can use an online lending platform out there like lending club they're not paying me to say this i'm just giving you an example these are the return numbers i just pulled off their website to give you an example of how this type of lending works so they say the average return the average interest rate is fourteen percent so this is the money the borrowers are going to pay to borrow money now out of this fourteen percent you're not going to get all this money because some people are just not gonna pay their loans and other people are gonna pay their loans off early if you pay a loan off early you pay less interest so this is less interest than you get so they say to apply an eight percent factor of loss either from people not paying their loans or from people paying off their loans early and then they apply another 1 fee for their commission now after these fees you are left with something like a 5 return and so this is money and making monthly through interest and also getting a little bit of principal back every single month and so you just lend this money out let people use your money and then they're gonna have to pay you interest to use your money the sixth way to make money is by renting out some of your home when i was in college me and my roommate would talk a lot about business ideas and one idea that we came up with was on weekends that we weren't in the apartment we could sublet our apartment out to other people who wanted to stay in our city and our campus when we weren't there it's an easy way to make money because if you're not in your home for a weekend you can have someone else stay there and they'll pay you rent for that weekend back then it was really hard to do because there was no such thing as airbnb or if there was airbnb i had never heard of it if you're not at your home for a weekend or if you have extra space like a basement or an extra room you can put this on airbnb for weekends that you want other people to stay there or the alternative if you're cool with other people living in your property is if you have extra space in your home maybe it's a basement or a guest room or an in-law suite if you have this extra space you can rent it out to somebody else and they will live there and then they're going to pay you rent every single month for using your property and you don't really have to invest that much extra money because you already have the space and it's sitting there vacant and now someone's going to use it and pay you passive income every single month for using your space that you're not using depending on where you live that can be an extra two hundred to a thousand dollars a month every single month in passive income and you don't even have to invest a thousand dollars to do that if you have the space the seventh way to get passive passive income is by investing in municipal bonds earlier on in this video i was talking about how you can get passive income by investing in stocks to get dividends now when you invest in stocks you become one of the owners of a company with bonds it's a little bit different because now you're not becoming an owner of anything you are just investing your money by giving loans and you're getting paid with interest if you didn't already know cities and states love spending money that they don't have so this might be used to build schools or build roads or build police systems and so in order to fund this they need to borrow money one of the ways that local governments borrow money is by issuing bonds to people like you investors this is what a municipal bond is a municipal bond is when you are loaning money to a local government this might be your city or this might be your state and now you are loaning your money to the city or the state and the city or state is going to pay you back with interest so every single month you're going to get paid with a little bit of interest and at the end of the loan this is called the maturity date you're going to get your thousand dollars your initial investment back there's a couple things that make municipal bonds very interesting one is they tend to be very safe because nobody thinks that cities and states are going to go bankrupt and second they can be tax free investments if you lend money to the government they are federally tax free that means you're not going to have to pay any federal taxes but there's also a second layer of tax called state taxes so places like new york and california have very high state taxes but if you invest in a new york municipal bond or a california municipal bond and you live in new york or california then you also don't have to pay any state taxes on the income but in order to avoid paying the state taxes you have to live in the state where this bond is located so if you are investing in a new york municipal bond and you don't live in new york then you're going to have to pay state taxes on your income but if you live in new york and you're investing in a new york municipal bond then you're not going to have to pay any federal taxes on your income and you also don't have to pay any state taxes on your income people are always debating over tax rates because the more money you make the more taxes you have to pay and so if you're making a lot of money and passive income you might be subject to really high taxes this is where municipal bonds can come in handy because if you make a lot of money you can invest in a municipal bond and make money without having to pay taxes one example of this is fnyqx this is a fund that invests in new york municipal bonds and it has a one thousand dollar minimum investment requirement so if you invest in this fund with a thousand dollars this fund will pay you just about percent a year and interest on your money this is where things get really interesting because it's two and a half percent that you're earning is tax free so if you are a really high income earner and you're making something like 50 a year then there's two and a half percent that you're earning tax free is actually something like five percent that you would have been earning before taxes so as you start to generate your passive income when you build your wealth and you have the high income municipal bonds are things that you can think about using as a way to kind of shield yourself against taxes now the next three ways that you can make passive income so numbers eight nine and ten are what i call pseudo-passive income these aren't things where you can just throw your money at something and then walk away but these are things where you invest your time and your money and if you do this the right way then you can eventually create this new passive income stream where you're making money a whole lot faster than if you just threw your money into something and walked away the simplest example of this is number eight making videos i can tell you from first-hand experience that you can start a great youtube channel with less than a thousand dollars like we started this minority mindset youtube channel with my cell phone in front of a white wall we didn't have any fancy equipment any editing software any sound equipment i literally just started this with the cell phone that i had and i was recording videos on a tripod in front of a white wall i probably spent like 50 or 75 dollars to getting this channel started and now we have kind of evolved into a full media company from a very small investment here's the caveat making youtube videos is hard and being consistent is even harder but if you work really hard at this and you make your videos and you constantly try to improve and you work very hard at constantly putting out content that people want to watch eventually youtube will see that and youtube will share your content with other people now if that happens the videos that you produced six months ago and a year ago and two years ago and five years ago will continue to generate you revenue today if you put in that work initially to build that youtube channel you can build a consistent revenue stream of at least a thousand dollars a month if not a thousand dollars a week or maybe even a thousand dollars a day that is very possible with youtube if you stay consistent and you keep putting in that work to produce quality content but it's not going to happen overnight this is why i call it pseudo passive income because it takes a whole lot of work in the beginning but if you put in that work in the beginning you can create a new passive income stream because all those videos that you created over the life of your youtube channel will continue to generate your revenue for years into the future nine is affiliate blogging every company on the internet wants more sales and one of the ways that companies can attract more sales is through affiliate marketing affiliate marketing is when you promote somebody else's product and anytime somebody buys that product through your link on your blog then you are going to get paid a commission now if you like working out then one thing that you can do is create a blog where you teach people how to work out and how to burn fat then within these articles you can link to your favorite supplements using your affiliate link that way anytime people read your article about how to burn fat and they click on your affiliate link and they buy the supplement you will get paid a commission the cool thing about this is it's very inexpensive to start you don't have to pay any money to start doing this type of affiliate marketing because you can just reach out to your favorite companies and say hey can i promote your products as an affiliate and they're going to give you a special link that anytime somebody buys their products with your link you will get paid and we're in the digital age where you can start a brand new website with literally zero dollars because there are so many free website builders out there that you can use and you can start writing articles on these websites and then when people come to your website and they click on that link you will get paid well they have to click on the link and actually make a purchase but you get the idea this brings me to number ten you can be an influencer now not everybody wants to be a celebrity like kim kardashian and you don't have to be to make money as an influencer when i say become an influencer essentially what i mean is you become an influencer on social media either as your personal self or through a business brand page it costs you zero dollars to go out and create an instagram page and if you go out and create an instagram page and you start producing content so this is going to take you time but it produce content that people want to see and they want to engage with and you start to build the following you can sell advertisements on your instagram page once you get to something like 10 000 followers then you can charge somewhere between 10 and 100 per post that you put on your page every single time you post something on your page the amount of money that you can charge per post is going to depend on a few factors it depends on what type of niche your page is what type of product you're promoting and what demographic your audience is but once you build that audience based on instagram which is not easy to do it takes time but if you put in that work to build that audience now you can continually sell advertisements and keep putting out instagram posts because once you have the audience it is very inexpensive and very easy to make a new instagram post and you can charge brands a lot of money to do that americans are not saving enough money just 40 percent of americans have the means to protect them from an emergency like a leaky roof or needing to replace their tires which means 60 percent 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 70 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 going to 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 going to 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 gotta know the true cost of what you're buying if you go to the mall and you buy yourself a nice 150 dollar jacket what is the true cost of your jacket so many of you might be thinking at this point that he bought a 150 jacket the true cost is 150 dollars but that's not the full story yeah you paid 150 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 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 this 150 dollars that i spent on my jacket would have become more than 1.1 thousand dollars 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 1100 over the next 30 years now you can ask yourself do i really want to 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 it's gonna 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 that 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 to costco and you buy the big pack of green tea it's gonna 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 going to 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 going to cost you at least three dollars for a small side of guac and you're barely going to 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 15 hundred dollars 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 want to 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 3.50 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 dollars 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 every lease 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 on 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 every 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 we're 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 150 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 i think more and more people are finally starting to realize that investing is the real secret to building wealth but if you have a thousand dollars to invest where should you put that thousand dollars this year to turn that thousand dollars into something a whole lot bigger to really answer that question the right way you got to ask yourself is this thousand dollars the only thousand dollars you have or do you have a thousand dollars today and then you can add more money to your investments over time i want to start by talking about here assuming you only have a thousand dollars to invest and that's it so you're gonna take this thousand dollars and put it somewhere and then you're gonna let this money grow assuming you only have a thousand dollars then i'm gonna get into what if you have a thousand dollars right now and then you can keep investing more money every month or every year if you only have a thousand dollars to invest and this is money that you've been saving up getting ready to invest and you want to put this money somewhere that way you can grow this thousand dollars into something bigger then the stock market or your traditional investments are probably not the right place to go because if you put a thousand dollars into the stock market and let's assume you can get a great return you get a 50 return after one year that means after a whole year of investing your money you're only gonna make five hundred dollars now a fifty percent return is an amazing return but 500 is not really gonna change your life so your goal should be to use a thousand dollars to create more income that way you have more money to invest in things like the stock market and i'll show you why but before i do that i need you to do me a quick favor and invest in a thumbs up button below if this is your first time investing money then chances are you are probably going to be a little bit scared or a little bit hesitant because you don't want to lose this hard-earned thousand dollars and so you might be looking for something that's low risk and for a lot of people that might mean investing your money in the bank in your savings account the issue with that is right now at the time recording this video the average savings account in america is paying out something like 0.05 a year that means if you put your thousand dollars in the bank for five years so you didn't get to use this money for five years you let it sit there and compound in your bank at zero point zero five percent a year for five years then after five years your one thousand dollars would grow to a whole one thousand and two dollars you made two dollars after five years it's not worth it your money your investment is safe in the bank but it's not making you any money so you are never going to build wealth you are never going to get rich at this rate the next level higher after saving this account for the majority of people is then a bank's cd a cd is a certificate of deposit and this is where you put your money in a bank account but you're not allowed to pull the money out so if you put your money in a five-year cd your money is locked up with the bank for five years and you cannot access your money for those five years and if you do try to access that money then the bank is going to charge you a huge fee the reason i talk about cds is because back when i was in high school my math teacher told me multiple times that the best place where you can invest your money is a cd because your money is safe and you're going to get a guaranteed return on your money so you tie your money up in the bank you get a guaranteed return it's better than a savings account but the only problem is you don't really make that much money here either right now the average cd in america is still paying less than half a percent a year so if you invest a thousand dollars in a cd for five four years now your thousand dollars after five years and after your money being tied up for all five years is going to grow to a whole one thousand and eighteen dollars you made more money than here but you still only made eighteen dollars after five years with your whole one thousand dollar investment now if we move away from the bank products and you invest this thousand dollars into the stock market and you can get an average seven percent return for all five years then after five years your one thousand dollar investment will grow to four hundred dollars that's a lot better than here but you're still making less than a hundred dollars a year so this is not life-changing money that's why if you only have a thousand dollars to invest i want you to be a little bit more active with your money that way you can create more income so that you can invest more money here there's two ways that i want you to invest a thousand dollars right now that way you can start attracting more money so you have more money to invest the first way is by investing in your mind by learning a skill you need to right now invest in your knowledge that way you have some value that you can give to the world because if you have more value that you can provide the world will pay you more money this can mean buying books buying courses or attending seminars right now you just got to be absorbing knowledge that way you have more value that you can provide to the world i mean you can learn things like digital marketing you can learn affiliate marketing you can learn coding you can learn design you just got to learn some value that other people and other companies need that way you can start making more money the second thing that i want you to do is now invest in actually creating that income the great thing about being alive right now is it is more accessible than ever to create a new income stream on the internet so anybody can do this the downfall is you got to be the one to kind of go out of your comfort zone and find a way to create this new income i started minority mindset with less than a thousand dollars i don't even think i spent 500 when i started minority mindset i started the company by making youtube videos with my cell phone in front of a white wall that was it the only thing i spent money on was like a 25 tripod on amazon and a couple 20 or 30 dollar lights that was it i don't have any fancy editing software no fancy microphones no fancy cameras no fancy equipment i just started talking in front of my phone i invested a lot of time on my end i'm gonna spend a lot of time learning how to make videos i spent a lot of time making videos and i spent a lot of time trying to learn how to not be awkward on camera although i'm pretty sure i'm still awkward on camera but we were able to grow from that small investment of less than a thousand dollars to now a full financial media company where we have a daily financial newsletter we have like a dozen writers writing for our blog every single day and we have an awesome office and a really cool downtown if you only have a thousand dollars to invest and that's it right now you gotta invest in your knowledge first so books classes seminars and once you do that then you gotta invest in taking action find something that you wanna do and create it and use that money to fund whatever it is you wanna do second if you have a thousand dollars right now to start investing and then you can add more money to your investments every single month now your options are a little bit different at this point you have a steady stream of income maybe you're working a job and you saved up a thousand dollars and every month you want to add more money to your investments or maybe you're running your own business and you saved up a thousand dollars that you can invest somewhere else and every month you can add more money to your investments whatever it is you have the steady stream of income where you have a thousand dollars to invest right now and you can keep adding more money to your investments now obviously the things that i just talked about always apply you should always be investing in your education and if you want to create more income invest in yourself but i want to talk more about passive investments where now you take this thousand dollars and this money you invest every single month and you put it somewhere that when now your money's out working hard to make you money while you continue to create this income stream so you're making money from your job and now every month you're investing money here that way your money can keep generating you more money while you're working hard to make more money too the first way that you can invest your money is through the stock market but the way i want you to invest your money in the stock market is a little bit different than what most people think about when they say the stock market the stock market is a place where you can go and invest in some of your favorite companies so you can go to the stock market and invest in chipotle and amazon and lululemon and apple and if you do that you become one of the owners of chipotle or amazon or lululemon or apple now when these companies make money so do you because now your stock price will go up or they'll pay you with dividends but if you're investing a thousand dollars that's not the way that i want you to invest your money in the stock market what i want you to do is invest your money in index funds here's the thing let's say you invest all your money in chipotle and then some time goes by and then chipotle starts releasing some really bad guac and people start getting really sick from this guac and then chipotle has to declare bankruptcy because of all the lawsuits they have to go through because of the bad guac they serve their customers if that happens and chipotle goes bankrupt not because of what you did but because of their executives who drove the company to the ground now your investment is worthless even though you invested all your money into chipotle thinking that they would make a great product when you invest in individual companies like chipotle then you have the opportunity to make a lot of money because chipotle can come up with a new type of guacamole and people could love it and they could double their revenue and their stock price could double which would make you a whole lot of money but the flip side is it also comes with more risk because if chipotle doesn't do good or if they go bankrupt then your money just goes away if you're not interested in spending a decent chunk of time studying companies learning to invest and reading their earning statements then you probably don't want to be investing in individual companies because well there's a whole lot more involved than just finding a hot stock to invest in that's where index funds come in because with index funds now you don't have to find the perfect company to invest in you can invest in a group of companies like you can invest in the general stock market or you can invest in tech stocks or you can invest in dividend paying stocks that we're getting cash flow so now you're not trying to find the best company to invest in you just got to find what you want whether it's dividends or real estate or technology or the general stock market and then you can invest in that general sector the way you invest in these funds is the same way you invest in stocks you just go into your stock brokerage enter whatever fund you want to buy and then you can buy it but i do want to let you know that you are not guaranteed to make money when you invest you might even lose money even if you invest in an index fund you can still lose money which is why you always want to do your own due diligence and you never want to blindly listen to a random guy on youtube let me give you a few examples again these are just examples not things that you need to invest in so make sure you do your own due diligence if you wanted to invest in the general stock market you could invest in funds like voo or s-p-y these index funds give you exposure to the s p 500 which essentially means if you invest in voo or spy you are getting exposure to the 500 biggest companies in the united states now usually if the economy grows these 500 companies will grow which means these funds will grow along with the stock market if the economy is shrinking these funds will go down too if you're a big fan of technology and you want to get exposure to the technology sector and you can look at funds like vgt and qqq these funds will give you exposure to tech companies like apple and microsoft and paypal so if you want to get involved in tech this is a good way to go now both of these funds are going to give you exposure to different companies so what you want to do is actually research these funds just go to google and search these funds and you will get a whole bunch of articles explaining which companies these funds invest in so make sure you do your own research and then for those of you who like passive income you could look at investing in dividend etfs like v y m and s d y this y is all messed up these funds are investing in companies that pay out big dividends and so when you invest in these funds you're investing in a fund that invests in a whole bunch of dividend-paying companies and so now these dividend-paying companies are paying into this fund which pays you now the best way to actually invest your money is to create an automatic system where anytime you get paid a portion of your paycheck let's say 15 of your paycheck will go directly into the funds that you want to invest in that way now anytime you get paid your money will automatically go into the funds that you want to own that we don't actually spend your investment money if you do want to learn more about how to automate the system and how to find a brokerage that can automatically invest your money every month or every paycheck our team put together an amazing guide that goes through how to do this step by step so if you want to learn more about how to do that i will link it for you in the description below the second way to invest your money if you have a thousand dollars right now and more money coming is through real estate but not the traditional way of investing in real estate real estate investing is when you buy a property let's say a house and then you lease this house out to a person and then this person lives in your house and they're going to pay you rent every single month the problem with that is you cannot buy a house for a thousand dollars or at least not a very good house but thanks to the internet you don't actually have to buy physical real estate anymore to get exposure to real estate investments because you can use a crowdfunding platform when you invest in crowdfunded real estate now you can invest a small amount of money like a thousand dollars and now you will get exposure to a whole portfolio of real estate investments so now when these real estate investments make money through rent or when the property values of these investments go up you'll make money too the good thing about most of these crowdfunding platforms is they pay you with passive income because now when these properties get rental income you get your share of that through your passive income dividends the downfall is your money is not as liquid you can't just sell your investment as easily because when you invest in real estate now you own a physical property and selling a property is not as easy as selling a stock where you can buy and sell a stock in just a matter of seconds with real estate your money is kind of tied up for a number of years so if you like the idea of investing in physical real estate and you don't have the capital to buy actual properties and you don't mind having your money tied up for a number of years then using one of these crowdfunding platforms is a good way to go again if you do want to learn more about how to actually do this and implement this real estate strategy our team put together a guide on how to do it and you can read the article on our website and i'll link it for you in the description below you can also get indirect exposure to real estate through reits on the stock market reid stands for real estate investment trust and when you invest in a reit now you're not investing in actual real estate you're investing in a company that invests in real estate so it's kind of like indirect real estate investing because you're not getting exposure directly to the property you're investing into the company that owns the property the great thing about reits is reads tend to pay out higher dividends so you get your passive income because reads are required to pay out 90 of their profits to their shareholders you investors through dividends if you are interested in going into reits then you can look at investing and read etfs kind of like what we talked about before and a couple examples of re-etfs are v and q and usrt if you're not too interested in stocks or real estate then the third thing you can look at investing your thousand dollars into this year is paying down your debt early if you have a loan and you're paying four percent a year on this loan whether it's your car loan or your mortgage or your student loan well if you pay that loan off one year early that's a guaranteed four percent return you just got on your money because that's four percent that you do not have to pay to your bank so if you want to invest your money and get a return on your money but you don't want to put your money in stocks or real estate because you're not a big fan of risk and you don't want your money just sitting in your bank or a cd somewhere that's not earning your return then you can use your extra cash to pay down your debt early because that's going to give you a guaranteed return the faster you pay down your debt the less interest you have to pay and the faster you can be financially free because now anytime you make money you get to keep more of it [Music] the banking industry is one of those industries that makes more money off of you and other people when you do not understand money when you spend money that you don't have buying things that you don't need that do not pay you for owning them well now you're going to be going to the bank to borrow all their money and then you're going to spend the rest of your life paying off all the things that make you look rich but they keep you broke because all of your money is going straight to your bank now as soon as you get paid your bank is the first person to get paid not you but that's nothing new banks have been skinning people alive financially for generations but banks also do have a purpose like banks let you have a savings account and a checking account and banks are the go-to place for you to borrow money to buy a home and maybe even a car if you believe in financing your car but when it comes to building your wealth there are certain secrets that your bank does not want you to know because these are things that will make you money but they don't make your bank any money and that's what i'm going to be talking about in this video but before we get into that i need you to do me a quick favor and smash the thumbs up button below you got to start by understanding how your bank makes money and there are three general ways your bank makes money at least at the consumer level there are other ways your bank makes money but let's focus on these three number one is your bank makes money when you give them money second your bank makes money when you spend money that you do have and number three your bank makes money when you spend money that you do not have let's start with this when you give the bank your money when you give your bank a hundred dollars that you want to deposit in your checkings account what happens as soon as they give the bank this 100 bill they're going to turn around put this in their system that we got another hundred dollars and immediately they're gonna do whatever they can to lend this 100 out you get a receipt saying that you deposited 100 and that you can withdraw this 100 whenever you want but the bank as soon as you deposit this 100 is gonna turn around and they're gonna lend this money out to somebody else so maybe your cousin bunty can go out and buy himself a new wardrobe buy himself some food on his credit card using the bank's money the more money you deposit in the bank the more money your bank is gonna make because as soon as you deposit your money in the bank your bank is gonna lend this money out to somebody else and they're gonna charge this person three four five maybe twenty percent interest because they're charging crazy interest rates on credit cards while they pay you next to nothing in your savings account so when you deposit money your bank is paid and you get the peanuts now that your 100 is in your bank account your bank will also get paid when it comes time for you to spend your 100 thanks to the help of plastic things like credit cards and debit cards because when you go to walmart where you go to chipotle and you go and you spend your money you swipe with that plastic your bank is gonna charge walmart or chipotle a fee to process this transaction so walmart or chipotle are gonna have to pay your bank a one percent or two percent fee every time that you swipe your card and that's money your bank makes when you're spending money that you do have the fee that a company like walmart has to pay to process your debit card is less than the fee that it has to pay to process your credit card but it really doesn't make that much of a difference to you because whether you're paying with a debit card or a credit card or even with cash you're still going to be paying a hundred dollars if you buy 100 worth of groceries the only time a bank doesn't make money when you spend your own money is when you buy things with cash unless you have to pay an atm fee to access your own cash but it really doesn't make sense to buy things with cash if you can use a debit card or credit card because this fee that your bank gets doesn't really affect you that's something that the company has to pay and if you use a credit card you also get perks and cash back and rewards which is why i only use a credit card and if you want to learn more about why i'll link a video where i explain that in the description below if you're buying a hundred dollars worth of groceries from walmart it doesn't matter if you use a credit card or a debit card or cash it's going to cost you 100 each way sure walmart might save some money if you pay with cash instead of a credit card but on your end it really doesn't matter because it's going to cost you 100 each way assuming you know how to use a credit card and you don't buy things that you wouldn't buy normally with cash with a credit card and so if you know how to use a credit card the right way you're just going to get some more perks and benefits for using your credit card instead of using cash because it's going to cost you the same amount of money but things really change when you spend 100 at walmart buying groceries when you don't have a hundred dollars because now your bank is going to get paid from walmart because walmart has to process your credit card transaction and if you don't have a hundred dollars in your account to pay your credit card bill now you're spending the bank's money and the bank is going to charge you an insane interest rate because now you got to pay interest on your credit card balance it is your bank's dream to spend a whole bunch of money that you don't have and just spend this money using the bank's money because that means you're going to be in debt for the rest of your life and anytime you get paid your money is going to be going straight to the bank and interest payments leaving no money for you which is good for the bank because now they're making all this money through interest but it's also good news for you because now you're in debt for the rest of your life and you have no money to build yourself wealth even if you stay away from debt if you spend money you don't have with your debit card and your bank is going to charge you an overdraft fee and so you still gotta pay money for using money that you don't have that's why banks made something like 11 billion dollars in overdraft fees back in 2019. that's why the less you understand about money the more money your bank makes and we're gonna turn that around that way you can be the one making money not just your bank so now that you understand this what can you be doing with your money that way your bank isn't the one making all the money well the first thing you got to do is you got to get your money out of the bank and there's an ass just here because i want to make sure you understand what i mean when you put your money in the bank you deposit your money in your checking account your bank is going to turn around and they're going to lend your money out to everybody else everyone that they can get their hands on that way the bank can get rich well you get nothing because your savings account your checking account is sitting here it's flat well anytime you deposit a dollar in the bank the bank is gonna loan it out and they're gonna charge somebody two three four five or twenty percent interest depending on how they loan the money out so the first thing you gotta do is you gotta stop letting the bank lend out all their money and you gotta be the one getting that return on your money now there's a little asterisk here because you got to understand when and how much money to keep in the bank so i have a few different bank accounts i have a checkings account which is where i spend my money out of this is what's linked to my credit cards so anytime i spend money it's linked to my checkings account and my checklist account pays for all my bills i make sure that my checkings account has enough money for at least a couple months of expenses at any given time but then i also have a couple savings accounts i have a high interest savings account which is where i keep my savings fund this is where i keep my emergency cash because you always want to keep somewhere between three to 12 months worth of expenses in a savings account liquid this is money that if an emergency happens if you lose your job or if a kid gets hurt or something goes wrong with their car you can access your savings account money whenever you want there's a money i keep in a high interest savings account because this isn't money that i'm really touching and i'd rather have this money grow faster than it would at a traditional bank account so i keep it at a high interest savings account and then i have another savings account which is where i keep some cash that i want to invest usually for real estate and so anytime i got some extra cash i put it in here that way i can use this cash to go out and buy real estate with if you want to learn more about what a high interest savings account is and how you can find one our team wrote an amazing article on our website the minoritymindset.com i'll link it for you in the description below which explains what it is but my whole goal is i keep money in the bank that i need to spend in my checklist account and i keep money in my savings account for emergencies and then anytime i got extra cash i want to get this money out so the other savings account that i have to buy investments with wants to have enough cash in there i'm gonna use that cash to go buy something else i'm gonna go buy an investment property and that way i take my money out of the bank because my money in the bank isn't making me any money it's making the bank money but it's not making me any money i also have an automatic withdrawal which goes into my stock market investments because i don't want to keep too much money in the bank i understand i got to have my money in my checking account because i got to buy things i got to have money in my emergency savings account that way i'm protected from an emergency but everything else i want to get out your bank doesn't want you to know this because if you start taking your money and you move it into the stock market you're moving it to real estate they move it into cryptocurrency remove it wherever you get it out of your bank account your bank is not happy because now they have less money that they can lend out and they have less money that they can make money off of because now you are the one making money because when you take your money out of the bank assuming out of your check is account and out of your savings account your emergency savings you take your extra money out of the bank and now you're putting it to work that way it can make you money because when all of your extra cash is in the bank then your bank is using your money to make the bank money i want you to use your money to make you money which is why you got to get your extra cash out of the bank once you start to take your money out of the bank don't be surprised if your bank looks at you a little bit differently like the first time i moved my money my savings to a high interest savings account outside of my traditional bank i had a meeting with my bank manager over there and she was not very happy because i was moving a sizable chunk of cash out of the bank to a different bank that was paying a higher interest savings account and she was pretty upset i mean very visibly because i was moving this money out of this bank to another bank and the money was leaving this bank so now they had less money that they could use to lend out to other people and she called up a different bank manager and they both tried to convince me to leave my money in this bank and not take it out and move it to another bank that was paying me a higher interest rate on my savings and so when you take your money out of the bank now your bank isn't making money but you got to use it to make you money now i understand a high interest savings account isn't really going to make you money in the sense of beating inflation and as an investment but as you start to take your money out of the bank to buy assets and investments which are things that pay you for owning them your bank is going to be the one that's losing money because now they don't have all the extra cash that they can lend out to other people and so now you are the one making money not your bank the second thing you got to do is you got to stop financing liabilities because when you're financing liabilities you're paying interest to own something that's losing value and who's the one getting rich when you do that it's not you it's your bank liabilities are things that you buy that don't make you any money these are things like cars and shoes and clothes these are things that make you look nice if you have a bunch of nice liabilities but they don't make you any money they keep you broke and the issue here is we live in a culture where this is completely normal to finance your cars completely normal to now start financing your clothes because of things like a firm and after pay and so we're entering this really debt heavy culture where it is completely normal to just finance your everyday lifestyle but when you do that the person that's getting rich is not you it's your bank because now you're spending all your money trying to buy a whole bunch of nice things that make you look rich but you're going to spend the rest of your life paying these things off what you should be doing is using your money to buy things that will pay you instead of just paying your bank the reason why this is so hard for so many people is not because of the looks you're going to get from your banker it's because of the looks you're gonna get from all of your friends when you stop having a nice car when they stop having all the nice clothes because now you're buying everything with cash and so people don't get to see all the gucci stuff they don't get to see the fancy car they just see you driving things that you can afford with cash which isn't as attractive as buying things with the bank's money now there is a time and place when it makes sense to use the bank's money like if you want to buy a home sure go out and get a mortgage because most people don't have half a million dollars sitting in their bank account to go out and buy a home but if you want to actually use the bank's money you can use it to buy something that's going to make you money instead of just buying liabilities which are things that lose you money the most common example of this would be buying investment real estate because now if you can go out and borrow some money to buy a home or an apartment complex that you can rent out to other people now the goal is the people that are living in your property are going to pay your bills they're going to pay your taxes your insurance and maintenance and they're going to pay your mortgage and on top of that there should be some money left over to go into your pocket every single month so this is a passive investment that you don't have to really work to earn the money on because you have the tenants that are paying your rent and your tenants are the ones that are paying your mortgage and they're putting some money in your pocket every single month if you are using the bank's money to buy an asset which is making you money then sure it makes sense but if you're using the bank's money to buy liabilities which are keeping you broke for making your bank rich then it doesn't make sense because right now your goal should be to build your own wealth not to bake your bank rich and the third and final thing that i want to mention on this is that your bank and your banker is not your financial advisor it kills me to see this when people go to their bank and they ask them how do i spend my money and how big of a home can buy and how much money should i borrow it's like going to an insurance person and asking them how much insurance can i buy your insurance person is always going to tell you more your insurance person's job is to sell you insurance and so they're going to want to sell you as much as possible your bank's job is to lend you money and so their job is to get you in debt and to keep you in debt for as long as possible it is not your bank's job to look out for your financial wallet it is not your banker's job to make you money your bank is just trying to make money for the bank and so you gotta understand how to use your money the right way and understand who's on your side financially and who's not if you do want to talk to somebody about real financial advice talk to a financial advisor talk to an accountant talk to somebody who's going to be working on your side to help you build your wealth because your bank's job is not [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 you 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 bill 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 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 going to 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 he started with just a penny now i already know what you're thinking but just 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 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 a hundred and fifty thousand dollar property and you renovate it and now you sell it for 225 thousand dollars 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 i'm 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 a hundred 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 100 or a thousand dollars and you're going to grow it to 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 they'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 one thousand dollars 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 gonna let your money grow and anytime your money makes money you're gonna reinvest that money back into it that way this money that you have growing is gonna 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 if we write bank account you're not going to get a very good return especially nowadays uh savings account nowadays is going to pay you like 0.1 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 going to 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 hundred percent 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 you 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 compounding 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 can reinvest this dividend back into the stock market and buy more shares that way now your money is actually growing so you invest in a 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 gonna automatically reinvest this money if you wanna 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 anything 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 on amazon during the early years about being public never made any money because anytime 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 we invested more of a startup type company has more risk because there's a chance that 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 going to 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 if 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 going to 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 two hundred thousand dollars pay zero dollars in taxes and go out and buy a 200 000 property that's going to 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 at 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've 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 the 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 if you enjoyed this video on this page i got a video on real estate investing that i think you'll love and while you're at it join our free finance and business newsletter and as always keep hustling they might be more willing to negotiate on the price because now they don't have to pay all this money in fees there are a ton of ways to find these visible deals and this is kind of like a whole industry in and of itself because everybody is trying to find

Channel: Minority Mindset

Views: 3,447,439

Keywords: minoritymindset, minority mindset, minority123, jaspreet singh, rethink rich, financial education, financial literacy, passive income, cash flow, make money, invest money, investing 101, investing money, investing in stocks, investing in real estate, earn passive income, build wealth, real estate, stocks, real estate investing, stock market investing, real estate 101, stock market 101, how to invest, investing for beginners

Id: xGmh2fdui_Y

Length: 85min 30sec (5130 seconds)

Published: Sun May 02 2021