If You Have $5,000 Do These 5 Steps NOW

you've been being Frugal and you finally saved up five thousand dollars so now what do you do well these five suggestions might not make you rich although the last one could they will definitely make a difference before we get into some of the more fun steps where we actually start investing and growing wealth it's important to stop living like 64 percent of Americans and that is living paycheck to paycheck so that's why it is so important to build an emergency fund so that when you get a flat tire something goes wrong with your car you have a minor health issue any small expenses that doesn't create a negative snowball of debt that can make getting out of debt and actually Building Wealth and gaining some Freedom a lot harder so it's super important to start with a three to six month emergency fund so before you start investing or doing anything else that's what I always start with that could be anywhere from two to five thousand dollars and I'd like to keep that money in a high interest savings account that earns at least two percent ones like Ally earned 2.35 percent and I also use one called yada that has a pretty good percentage back and that's where I keep my emergency fund I just pretend that it doesn't exist it's just there for a rainy day if things go really bad I have that money there and that really starts building some piece peace of mind and also confident that will allow you to start building Freedom which we'll talk about later on in this video pay off your debt there is good debt and there is bad debt good debt would be debt that actually makes you money so if you have a rental property let's say and it's making positive cash flow on that debt every single month that's good debt you don't really even want to pay that off because it lowers your return on that investment however bad debt like credit card debt or any type of high interest debt will really you and make it extremely hard to do these later steps where you can actually start Building Wealth so that is super important to pay off as soon as possible before it gets more out of hand and then once you do have that paid off work extremely hard to stay out of ever getting into credit card debt and high interest Consumer Debt ever again the peace of mind and the reduced stress and the more options that you have from simply not having debt is unbelievable like you might have more flexibility to switch jobs to move you be able to start building up your credit and eventually maybe get a house or get an investment there's just so many more really good options and opportunity for people who are not in debt and it might be extremely hard to get out of but that's absolutely the first place to start now with all of this saving even more money especially every single month really helps us out so before we get into some ways that you can invest and start Building Wealth I wanted to tell you about a way that I have been saving money recently and that is with the partner of today's video mint mobile hey there it's Ryan Reynolds owner of mint mobile you might have already heard of knit mobile with their extremely funny ads from Ryan Reynolds if you haven't checked those out you got to check them out but they're more than just great marketing it's actually a really amazing service that I use myself I have switched over to them and it saves me a lot of money mint mobile offers premium wireless service starting at just 15 a month and you don't have to sacrifice any coverage speed or data in fact they're built on the nation's largest 5G Network and how they keep costs low is they sell direct to you and me online so they don't have storefronts they don't have sales people there's really just no reason to pay more for pretty much the exact same thing now switching to Mint mobile it is super super easy thanks to their digital e-sims cards you can sign up and activate immediately right on your phone from your couch you keep your same device you keep your same phone number you just easily switch over the service on top of that as an added savings between November 14th and January 15th if you purchase a three month plan you will receive an additional three months for free if you go to mintmobile.com Gabe you can also click the link down in the description or scan the QR code and this offer is available on all plans including the unlimited I use them Meredith used them some of my family and friends are starting to use them because it just saves money and it's just as good as anything else and way easier so check them out and thanks to Mint mobile for partnering with me on this video investing specifically in the stock market and more specifically using a Roth IRA but it's honestly going to depend on what your future goals are if you're planning on taking that money out in a couple years to maybe buy a rental or start a business business or if you're planning on keeping it in long term one of my favorite things about a Roth IRA is that your money will grow tax free and it doesn't really have to be complex I used to try to pick individual stocks and time the market and honestly I lost money on most of those instead I have switched over to completely low-cost index funds things like the S P 500 and btsax historically like the S P 500 has an 11.8 percent return since 1957. does that mean you should plan on 11 probably not you might want to plan on seven percent or eight percent or ten percent the really cool thing about a Roth IRA is that once you hit 59 and a half you can withdraw that money tax-free so let's say that you just put in five thousand dollars right now and that grew at 10 for the next 30 Years that one-time investment of five thousand dollars will have grown to 87 000 and the super cool thing is that would be tax free money so that's why it is so important to start investing as early as possible because you see the hockey stick of compound interest and the sooner you can get in the more money you will have once you reach later in life but if you ever want to draw that money out you can withdraw your contributions penalty free personally I opened up a Roth with Weeble really simple to use app if you sign up and fund an account you can get up to 12 free stocks I'll leave a link down in the description but if that's not something you want to do you could also just invest and not have it in a Roth or in a 401k or anything like that but as you start to gain money over the long run talking 10 20 30 years you will have to pay taxes on that I would also say it is super important to not just invest one lump sum and then kind of like ignore this but to make this a consistent thing where every month you put in as much as you're comfortable with whether that's fifty dollars or five hundred dollars and if you do that for an extremely long period of time it will be life-changing money at the end of your life which most people will not have just investing 500 a month for 30 years at a 10 return you will have invested a hundred and eighty thousand dollars over that time but after after the end of that time it will be worth just shy of a million dollars now by the way if you guys are enjoying this and getting any value feel free to subscribe it really it means the world to me investing into yourself honestly I think this is the one that will make the biggest change it made the biggest change for me and there's really like a few different ways that I did this the first was investing in my mental and physical health reading books that helped me mentally going to the gym consistently over the past almost 10 years now investing time and money to buy Quality Foods and to learn about health and fitness and you know waking up earlier spending time that I could have spent doing something else actually working on my health and going for walks and doing things consistently for a long period of time really a great way to spend your money especially long term but then also investing into your brain I would say this year I've spent almost four thousand dollars on my brain going to seminars I went to a conference in La buying online courses and books and audio books anything I can do to increase my knowledge of my craft will have the craziest Roi of anything else I can think of like well you can invest maybe a thousand dollars and you could earn 10 on that and gain a hundred dollars next year if you invest a thousand dollars into courses and books and you learn one thing that allows you to up how much you get paid by maybe double that can be worth way more than investing almost any other way I know for me once I learned a few things it almost doubled my income so if there's ever an opportunity to invest in your brain somehow that is the best way to invest your money in my opinion invest in a business or a side hustle I would say along with house hacking and real estate this is probably the best way to grow actual wealth for me it was the thing that grew most of my wealth and while five thousand dollars is not a ton of money this is kind of another way of investing into yourself there are so many different side hustles out there that can be started with with extremely low startups and can make you probably more than you're making you can either learn a skill like design or editing for relatively cheaply by maybe buying a laptop or some software or a course on the subject and then freelancing your timeout you could buy a lawnmower and start a lawn mowing business you could buy a vacuum and some cleaning products and start a cleaning business I'll use what I did for an example when I was getting started I invested a couple thousand dollars the first year buying a camera buying a microphone buying a computer buying editing software buying courses on how to edit on that editing software and for me investing into my business is one of the best rois that I can make although you don't have to go extreme with this and overdo it especially when you're getting started people like to throw money at the problem instead of actually building a skill and actually taking action so you can start a YouTube channel with just a phone and nothing else and edit on the phone and shoot on the phone you can start most side hustles for extremely cheap and then as you grow and you build and you decide this is something you like doing you can reinvest that money back into it to help it grow a lot faster and in return make you a lot more money if you guys have any cool side hustles actually I'd love to hear about them down below in the comments and if you enjoyed this video don't forget to subscribe you can also check out Weeble and get some free stocks with the link down in the description and I'll uh I'll see you next week

Channel: Gabe Bult

Views: 226,821

Keywords: how to invest, how to save money, saving money, financial independence, frugal, frugal living, gabe bult

Id: ZHNpoosXbtE

Length: 9min 40sec (580 seconds)

Published: Fri Dec 09 2022