The 5 SECRETS To Becoming A MILLIONAIRE

but the majority people think of money they related to stuff how much stuff can my money buy me and the next thing you know your money is gone because that stock went out of business they're making a lot of money but they're spending all the money that they make the first thing you got to do is you got to stop living in your feelings what's up everybody i am jasper padilla singh from the minoritymindset.com where money minds really think rich becoming a millionaire goes way beyond just what degree you got or what job you work or how much money you make it's what you do with the money you make and it's the financial education you have that's why in this video i put together some of our best clips to give you the financial education you need to become a millionaire let's get into it i think we can all agree that most people want to retire a millionaire that way you can enjoy your golden years time to sit on the beach relax and order some extra guac the problem is most people don't retire millionaires on second thought why don't you just hold the guac retiring wealthy is really just about consistency and preparation and the sooner you start the richer you'll become it's a lot more accessible than you might think if you do it correctly you can start with just a hundred dollars a week and retire a millionaire don't just take my word for it kevin o'leary mr wonderful did an interview with market watch where he talked about how you can retire a millionaire by investing just a hundred dollars a week in case you don't know who kevin o'leary is he is one of the sharks or investors on shark tank and he's probably the most savage shark there is if you don't hit that thumbs up button you're dead to me anyways today i want to talk about kevin o'leary strategy for how you can retire a millionaire but before we get into that smash that thumbs up button below subscribe to the minority mindset youtube channel and if you want youtube to actually let you know when a new financial news and education videos are released hit that little notification bell too kevin started the interview by talking about how the whole idea of retiring at 65 doesn't make sense anymore because our economy doesn't support it and because most people aren't doing enough to retire by 65. a hundred million americans have zero dollars nothing invested for retirement right now and this became painfully true during this 2020 pandemic as soon as the economy shut down people panicked not because they were worried about what was going on with the pandemic but because so many americans were living hand-to-mouth they made a dollar and then they spent a dollar and actually for a lot of americans it was you make a dollar and then you spend a dollar plus a quarter with the help of your credit card when the economy shut down lots of businesses that kevin o'leary's a part of and invested in were trying to get money or loans from the government and that's when he found out that a lot of the companies that he's investing in have these business owners that have great companies but these business owners have no money invested or saved for retirement that's why according to him the first step to getting that million dollars is by doing what he calls the 90-day test look at every dollar and every penny you earned over the last 90 days this could be from your job your side hustle your business your investments whatever add up all the money you made over the last 90 days then do the same thing with your expenses pull out your bank statements and your credit card statements and add up all the transactions you made over the last 90 days and look at how much money you spent now compare the two numbers most people are spending just as much money as they're making or they're spending more money that they're making through the help of their credit card right now they have to make up this difference by paying 15 20 25 interest to the credit card this spending habit of spending more money that you're making is destroying your net worth because your money is constantly going out and it's compounding for your credit card company making them rich while it's keeping you broke once you see where your money is going that's when you can do something about it most people are spending a lot of money on stuff that they don't need according to kevin most people should be able to cut down their expenses by a minimum of 15 percent by just doing one thing buying less crap but just breathe my cousin bunty told me that gucci is an investment unless you're getting paid to wear it it's not an investment then put aside a hundred dollars a week minimum and invest it so you can retire a millionaire and now we're gonna work backwards to see how to do that the average life expectancy for somebody in america is between 75 and 80 years old and if you want to retire at 65 you need to know how much money you're gonna need to retire that way you don't run out of money to keep things simple let's say that you and your spouse need fifty thousand dollars a year after taxes to be able to live free and maintain your lifestyle when you turn 65 you better have an investment fund big enough that you can pull out fifty thousand dollars a year after taxes for the rest of your life to make that happen you should not be pulling out more than six percent of your assets a year but you also got to calculate taxes if you pull out six percent of your assets the first thing you're going to have to do is pay the government because the government wants to get their fair share out of your retirement too so if you pull out six percent of your assets you're really only gonna keep four percent because two percent is going to go to the government i know all these vague numbers are getting confusing so let me put some numbers on this so it makes more sense if you need fifty thousand dollars a year after taxes to maintain your lifestyle that means you gotta be pulling out something like seventy five thousand dollars a year before taxes that way you're left with fifty thousand dollars after taxes the five thousand dollars that you're pulling out a year should not be more than six percent of your total assets because you want to make sure that your investment fund your whole nest egg is going to last you for the rest of your life so if seventy five thousand dollars is six percent of your total assets then you do seventy five thousand dollars divided by six percent and this tells you that you will need 1.25 million dollars in order to be able to live your life for the rest of your life at this lifestyle there's other ways to fund your retirement besides just having a big nest egg you can invest a million dollars into something that produces cash flow or passive income like real estate but you got to just find what's right for you now that you actually know how much money you need how can you start off with 100 a week and turn it into a million dollars for one you do not have to be a stock picker okay most people should not be in the business of trying to pick stocks to begin with most people who invest their money in the stock market by trying to pick stocks lose money not because they pick bad stocks but because they get emotional tesla i love you but why does your stock keep breaking my heart the way that a lot of newer investors who don't have investing experience invest in stocks is they buy into a company that they think is cool and then the stock starts to go up which is great and then something happens the stock goes down for a little bit and now you see a portfolio in the red and now people start to panic they get worried they get anxiety and so they panic sell their stock because they cannot stand seeing their investment at a loss there's a lot more to investing in stocks than just picking good stocks a simpler way to invest your money is to invest the bulk of your investment money into a low-cost index fund that just matches the market and then use a little bit of your investment money to invest into individual companies and stocks that you like an index fund is a fund that invests into a bunch of different stocks now instead of you trying to pick the best company to invest in you can invest your money into this fund and this fund is now going to invest into a bunch of different stocks so now you're getting exposure to a whole bunch of different stocks instead of just one back in the day the common way to invest into a fund that gave you exposure to a lot of stocks was by investing your money into a fund that was managed by a very experienced but very expensive money manager these are called actively managed funds and they have their place but they are very expensive and there are better options now your money manager is going to take a big chunk of your assets every single year whether you make money or you lose money and if they're making money they're now also going to take a quarter of your profits and if that wasn't bad enough the vast majority of money managers cannot beat the market over the long run so you're paying huge fees to get average returns that's when low-cost index funds came into the picture which allow you just to invest into the stock market so if the stock market goes up your index one goes up the stock market goes down your index fund goes down and now you don't have to worry about paying a whole bunch of money to an expensive money manager there are funds that you can buy off your stock brokerage that will give you exposure to literally the top 500 companies in the stock market so when the stock market goes up so does your fund now the bulk of your money is going into your investments instead of your money manager's pockets are you guaranteed to make money no investing has risks you are never guaranteed to make money when you invest you might even lose money which is why you should always do your own due diligence and never blindly listen to a random guy on youtube but let's do the math using some historical numbers if you invest a hundred dollars a month that's fifty two hundred dollars a year goldman sachs did a study where they looked at the stock market over a period of 140 years and what they found is that over any 10-year period the stock market grew by on average 9.2 percent past performance is not a reliable indicator for future performance so let's say the stock market continues to go up on average over the long term not by nine point two percent a year but by something like eight percent a year now you're investing fifty two hundred dollars a year and you're getting an eight percent return on your money every single year on average and if you start this when you're 25 years old and you do this until you're 65 your 100 a week will grow from 100 a week to more than 1.4 million dollars this doesn't mean that the stock market is gonna always go up this number factors in the fact that sometimes the stock market's going to go down and sometimes it's going to go up big so it's the average if you are older and you have not started planning for your retirement or putting money away for investments you're not out of luck you just have to be more strategic you can be more aggressive with your investments that way you can try to get a better return on your money or you can try to earn more money that way you can double or triple maybe even quadruple your weekly investments the best case scenario is to obviously start investing as soon as you get your first job but the reality is most of us are never taught about money or investing when we're growing up i was the same way that's what pushed me to start minority mindset you have to make deal with what cards are dealt then you got to understand the numbers work backwards and make a plan to make it happen before we get into the next clip if you are interested in learning more about money management and investing our team put together an amazing guide that i think you'll love and you can get this guide for free when you sign up for a daily newsletter if you want to read a free guide i got the link to where you can do that in the description below the stock market is one of the most accessible wealth building tools that you can access but lots of people never actually end up making money or building wealth in the stock market there are essentially two ways that you can invest in the stock market you have the cool way oh yeah and then you have the boring but profitable way oh yeah when most people invest in the stock market they're trying to find the next amazon or tesla they're trying to be cool it's the cool way to invest because you want to find the next hot stock and buy it before it gets big you can make a lot of money doing that but it takes a lot of time and it takes a lot of research and most people don't actually put in the work to do it they're just gambling and there's a lot of people especially when you first enter the stock market i get really allured by this idea of being able to flip a stock very quickly for a huge profit like you see this penny stock trading at four cents a share and you think whoa what if i buy a thousand dollars worth of this stock and it goes up to eight cents a share that's not that big of a jump if that happens i'm gonna make a thousand dollars and if the stock goes up to a dollar i'm gonna have 25 000 doing nothing and the next thing you know your money is gone because that stock went out of business trust me i know i've been there even if you're too smart for penny stocks and you're investing in well-established companies chances are you felt the pain of investing in a company and then you see your stock go down i mean that's why so many people are searching why do stocks go down when i buy them on google so now you have a lot of people that are investing in companies and losing money and then you also have this big group of people that are scared to invest in stocks because they see all these people lose their money but there is another way that you can invest in stocks that doesn't have as much risk where you don't have to try to find the perfect company where you can build sustainable wealth the downfall with this is is kind of boring it's not as cool as trying to find the next amazon so what is the secret system index funds index funds not to be confused with indexed fingers or index cards are a simpler but boring way for you to invest in stocks and build profit over the long term while compounding your wealth that's why in this video i'm going to be going over index funds and more specifically vanguard index funds and you'll see what i mean in just a minute but before i 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 that thumbs up button then youtube is much less likely to show you and other people our financial news and education videos and index is a group of stocks is a segment and a fund is something that you can invest in so as a simple example let's say you really like tech companies but you don't know how to find the best tech stock so let's create a tech index fund so remember an index is a group of stocks and in this we're going to create one right now let's put in amazon amz and these are the ticker symbols facebook google what's another tech stock apple aap so now we have just created an index which is a group of stocks now if you want to invest in this group of stocks and you don't want to individually invest in all these companies you can invest into this fund so now this has just become a fund this fund invests in these individual stocks and you can buy shares of this fund now you're not going to be the person that's actually creating the fund because there's a lot of complexities into that and they get a lot bigger than this i'm just showing you kind of as an example of what an index is but you as an investor can invest into a fund which invests in a bunch of stocks that way you don't have to try to find the best company to invest in the reason passively managed index funds have become so popular is because back in the day the only way that you could invest in funds was by investing in what's called actively managed funds here's the thing someone or something has to manage this index of stocks because if facebook goes out of business because people don't want facebook anymore and people stop buying apple iphones then what's going to happen to this fund you're going to have only some stocks they're doing well in all these stocks that are going bankrupt and if that's the case your investment is going to tank so someone or something is going to have to actually manage this fund to make sure that the stocks in here are doing well and you're not going to be the one doing that because the whole point of investing in this fund is so that you don't have to do all the work in actively managed funds what would happen is you would have this person right here manage this index so let's draw a nice mustache on this person and this person probably went to yale for undergrad and they went to wharton for business school for their mba and to most people that means they're probably very smart now to me i'm sure they're very smart but what that means to me is they're probably going to charge you a whole lot of money and that's exactly what these money managers did so they would create this fund and then they would charge you a whole lot of money so this is you the investor and a lot of your money would go right into this person with a mustache's pocket so if you wanted to invest in stocks but you didn't want to put in the time and effort to research companies and to manage your stocks then what you would do is you would hand over your money to this money manager with a mustache who went to yale who went to wharton who is now going to charge you a whole lot of money to take your money and put it into this index or fund that they are managing and if your index your investment goes down they're still going to charge you a lot of money this model is why index funds as we know them today were created now i have nothing against mustaches but i really like the idea of people being able to invest their money without paying all their money and fees the way it worked is instead of having this guy with a mustache manager money how about let me raise the mustache and the person how about we just have a computer manager investments because computers are a whole lot cheaper to manage and we can just tell the computer hey why don't we just create this investment where this thing this fund invests in the top 10 tech companies and now if facebook goes bankrupt this computer can automatically kick facebook out and put in a new company so this was automation coming into the money management and investment game because now instead of paying an expensive money manager people can create an algorithm of what type of companies they want to invest in and so if you want to invest in the top 10 tech companies and one company goes below that threshold this computer will automatically kick this company out of the fund and bring in a new company like if facebook goes out maybe snapchat will come in this computer will automatically calculate that and make these transactions that way your fund has the stocks that you have in the algorithm two things happen when you do this first you as the investor you get to save a whole lot of money because managing a computer is a whole lot cheaper than paying a money manager who went to yale and who went to wharton to manage your money and second you get to take the emotion out of investing the reason so many people including high paid money managers lose money in the market is because people are emotional beings when the 2020 pandemic hit and the stock market crashed do you want to know what a lot of expensive money managers did they sold they were selling stocks out of their fund out of fear if your fund manager makes bad trades and you lose money you lose money in your investment but you also have to keep paying your money manager look there's a time and a place for actively managed funds but if you really want to get the good money managers you need a lot of money to invest with them so now we're talking millions of dollars if you don't have millions of dollars to invest chances are you're not going to get access to the greatest money managers passively managed funds let you invest your money into stocks while paying low fees and a lot of times these passively managed funds will get you better returns than actively managed funds and you get to pay way less in fees but in order for index funds to build you wealth and really make you money you have to invest in them the right way because this isn't one of those things where you can just invest in an index fund on monday and expect to be rich by wednesday index fund investing is a long-term wealth building tool and the way you make the most money and build the most wealth by investing in index funds is by investing money consistently into the index funds and investments that you have so this is investing money every week or every month into your funds now investing has risks okay you are never guaranteed to make money when you invest you might even lose money so make sure make sure you always do your own due diligence and never blindly listen to a random guy on youtube but let's take a look at this so voo is an index fund created by vanguard and voo invests in the top 500 companies in the stock market okay so voo is that index fund and invest in these top 500 companies so now what you can do is you can invest into this fund again i'm not telling you what to buy just an example and this fund gives you exposure to the top 500 companies between november of 2010 and november of 2020 vo this index fund returned an average of 13 a year over the last 10 years this doesn't mean that the fund went up by 13 every single year consistently it means some years it went up more than 13 percent some years it went down by 13 but on average over those 10 years this fund went up by 13 a year let's put this in perspective let's say you had ten thousand dollars and you put this money into the bank and i'm going to be very generous and i'm gonna say that your bank paid you a half of one percent a year in interest if you did that over ten years your ten thousand dollars would grow and it will grow to a whopping ten thousand five hundred dollars after one decade if you put your ten thousand dollars here into this index fund that gave you general exposure to the stock market then your money would have grown from 10 000 all the way up to 33 000 and this is on the side without you doing any work you just put your money in and then you go do something else now i get it hindsight is 20 20. of course it's easy for me to look back and say hey you should have done this but this is the reality of how investing works okay if you don't take risks your money is not going to grow again past performance does not indicate future performance but let's just assume for a second that you can maintain that 13 return that we just saw in the previous example but let's say that you don't have 10 000 to put into an investment so instead of putting 10 000 cash into an investment you do something a lot smaller you do 250 a month now whether the fund goes up or down you're gonna put 250 a month every single month into your fund and you're gonna do this no matter what and they're gonna do this for 10 years so for the next 10 years you're going to keep putting 250 a month into your investment and over those 10 years you will have put 30 000 dollars into your investment but assuming you get the same average return your 30 000 will have grown to 63 000 on the side but let's keep going let's say you do this for another ten years now you will have put aside sixty thousand dollars so this is ten years another ten years over twenty years into your investment money but because you're investing this money you will have grown this money to over 270 thousand dollars you got more than a quarter million dollars in your investment count because you're investing this money passively again this is assuming you got a 13 return but i got this number from the last 10 years of how the stock market has grown and how these index funds that match the general stock market have grown i'm not saying this is what's guaranteed but i'm showing you what's possible if you invest your money and the great thing about this is this investment is passive you're not trying to find the best stocks you're not trying to research other companies you're just putting your money into an investment that's investing in stocks for you the reason so many people don't do this is because investing in passively managed index funds is not as cool and it's not as hot as trying to find the next tesla or amazon the reality is building long-term sustainable wealth and growing it in the stock market is not easy yeah it looks easy when you're in a bull market because everybody's making money then it's easy you can just throw your money anywhere and you're going to make money but when things go bad and times get rough which will happen you have to anticipate this this is where you have to have a strategy and if you are investing in index funds it's all about just consistently investing every week or every month and letting your investments grow and compound over time now i'm going to be talking about some of the different index funds that there are out there for you to invest in but before i do that i want you to be aware of tools that you can use that can help you passively invest your money like a sponsor m1 finance the way it works is simple you're going to create a free account and then you go in and you're going to create a pie which is your investment portfolio where you can enter in what stocks and funds you want to invest in so here's an example of what you can do let's say you slice up your pie into five different slices and now you can divide it up however you want you can have fun one fun two from three four four and let's say you really like chipotle so you throw one chipotle in there too so now what's gonna happen is anytime you invest money into your pie it's gonna automatically be divided up into these five different things into the proportions that you created so i know my numbers are really rough because this pie is really kind of just lopsided but let's say 35 of this is 1 1 25 fun 2 and on and on and on so what happens is if you invest 100 into your pie 35 is gonna go to fund one twenty five dollars fund two ten dollars to chipotle ten dollars to fund three and twenty dollars to fund four the cool thing is you can automate this process however you want so you can create an automation where every single month two hundred and fifty dollars is withdrawn from your bank account and automatically gets put into this pie the way that you created it plus it costs you nothing to do this because it's free to create an account and they don't charge you money to invest your money automatically through their passive system so if you want to learn more and start passively investing for free i got the link to where you can do that with m1 finance in the description below minority mindset is a paid partner with m1 finance so if you use them we will get compensated but there's no additional cost to you it's free to create an account and they don't charge you to do the sort of passive investing so if you want to learn more start passively investing i got the link to where you can do that with m1 finance in the description there are index funds for almost anything you can imagine you have a general stock market funds like vo which i talked about voo was created by vanguard but you have other ones like spy which are not created by vanguard both of them invest in the top 500 companies in the stock market but you also have sector specific funds so these are a little bit more narrow so these are things like tech funds and growth stock funds and real estate funds and dividend stock funds vanguard was the first company to really go out and create these type of index funds but now lots of companies have them now i know this might be a little bit confusing but finding an index fund is actually a lot easier than you might think let's say you want to invest in tech stocks but you don't want to actually find the best tech company to invest in so you want to go this fund route so what you could do is you go to google and you just search best tech index funds and what's going to come up is you're going to see all these lists of tech etfs all an etf means is it's a fund that you can buy through a stock brokerage digitally remember back in the day you couldn't always buy these funds digitally you had to call up a broker and manually do it so an etf just means you can do it digitally two things that you want to make sure you pay attention to are what companies your fund invests in and what the fees are again this is very easy to do you just gotta google it going back to voo if you go to google and you search voo details it's going to take you to the vanguard website and you can see the list of all the companies that voo invest in and the different percentages that they invest in and you can also see the fees which is called the expense ratio at the time we're recording this video you'll see that the voo expense ratio is 0.3 which means for every 100 you invest into this fund they're going to charge you three pennies as a fee for every hundred dollars you invest so this isn't a lot of money because they're using a computer to help manage your fund they don't have this fancy guy an expensive guy with a mustache who you have to pay a ton of money to to invest your money and manage your money the key here is having the right mindset because you want to be investing for the long term because this is a long term wealth building play it's also very important for you to stay up to date on what's happening in the top finance of business news that way you can make smart decisions with your money and if you're looking for an easy way to do that that's why we created the free market briefs newsletter where our team first breaks on the top finance and business news and then we show you how this news affects your wallet that way you can be smart with your money this newsletter is completely free and you can subscribe to our free finance and business newsletter by clicking the link up here or by clicking the link in the description below there's a difference between wanting to become wealthy and actually wanting to become wealthy everybody says they want to be wealthy i mean who doesn't who doesn't want to have an extra million dollars but if you want to actually be wealthy then you gotta actually want to become wealthy and do the five things that i'm gonna be talking about in this video that we can actually become wealthy you can really see the difference between somebody who wants to become wealthy and somebody who actually becomes wealthy by your actions like if you get a raise and you make an extra thousand dollars a month now what do you do well if you just want to become wealthy and you're making this extra money you're gonna say oh well let me celebrate a little bit right now and let me start investing later because i got to enjoy my life right now so you got this extra thousand dollars a month and you have this plan where you want to start investing and you want to start building your wealth but you kind of want to enjoy this money right now because you only live once right and you're only young once so what do you do you buy yourself a nice car you go on a nice vacation with your family and you go to chipotle and celebrate with some extra guac but if you actually want to become wealthy then what are you gonna do they're gonna take all of this thousand dollars that you're making extra and they're gonna put it towards your investments right now that way you can achieve this wealth sooner because you understand that this is a short-term pain that you're going through that way you can achieve that long-term financial freedom the thing that everybody gets confused here is they assume that if you want to become wealthy you have to have a hundred thousand dollar year job or quarter million dollar a year job or a million dollar a year job but it doesn't really work like that there's a lot more to becoming wealthy than just having a big salary i mean it can help but if you don't know how to use your money or if you don't have the right mindset or if you don't know how to pay yourself or if you don't have the right patience then it doesn't really mean anything it's all about what's in here before you make the money if you actually want to become wealthy there are five things you need to do now what you got to understand is that these five things are not easy so if you're not willing to go through short-term pain then it's not going to work for you and if you are going to get caught up in your feelings and get triggered any time something is hard or something goes wrong then it's not going to work but if you're willing to go through the short-term pain and if you're willing to put in the sacrifice and if all of these five things then you will be able to become wealthy the first thing you got to do is have the right mindset about money i bet you thought i was gonna say smash that thumbs up button below didn't you having the right mindset is fitting because you know we are the minority mindset which is all about having the mindset of thinking different than the majority of people but when it comes to having the right mindset about money and building wealth the first thing you got to get right is understand the difference between becoming wealthy and being rich now i know some of this is just syntax but when people talk about being rich a lot of times what they talk about is your appearance the way you look having the nice cars having the nice watches having a nice home that's looking rich being wealthy is more about being free having the time to do whatever you want because you have the financial freedom you can look rich and be broke i mean you can have a nice car nice close a nice home going nice vacations but still be living paycheck to paycheck and have really no free time for yourself because you have to work your butt off in order to make the payments on all the things you have being wealthy is being able to live your life financially free without having to worry about the payments because you understand how to use your money you understand how to invest your money you understand how to grow your money so you're able to live your life the way you want and have the time to do the things you want because you have that wealth my goal is for you not just to have all the nice things i mean i want you to have the nice things that you want but i want you to be able to afford the nice things without having to worry about the payments that's why i want you to understand how to become wealthy that way you can make those sacrifices today that way you can buy all the nice things you want without worrying about the price if you do want to learn more about the difference between being rich and being wealthy i already made a video talking about that so if you want to watch that i will link it for you in the description below the second thing when it comes to your mindset is if you want to become wealthy you got to stop hating the idea of becoming wealthy i mean we are living in this culture nowadays where it is just commonplace to hate people because they are wealthy why because they're wealthy but if you really want to become wealthy yourself instead of hating the person that has become wealthy you need to be one of the people that is learning how they became wealthy that way you can apply those strategies and techniques to your life hate it or love it the reality is we live in a society where the producers are the ones who are rewarded and the consumers are the ones that pay the price so if you really want to become wealthy you got to understand this shift and you got to start being a producer that way you're the one that's making money when everybody else is spending money so if you really want to become wealthy you got to understand it and you got to stop hating people from becoming wealthy and understand the game and win at the game now if you don't like the system then what you should do is become wealthy and then use your wealth to give back and help other people that's a good thing and now you can inspire other people to do that okay but if you really want to become wealthy you got to have the right mindset because if you hate the idea of becoming wealthy you are never going to become wealthy the reality of the game is the more money you have the more you can do if you're broke you can sacrifice your time and you can help people but if you have a million dollars now you can help a whole lot of people you can feed a lot of hungry people and you can shelter a lot of people who need shelter if you're broke you can't do that yes you can sacrifice your time and you can serve people and you can help people and you should we should all have the mindset of wanting to give back and taking care of our community that's very important that's important to me too but the more you have the more you can do so if you want to be able to help more people you got to understand how wealth plays a part in that because if you have the money and you have the resources you can do a whole lot more good for yourself your family your community and your surroundings the third thing you got to understand about your mindset when it comes to money is that money is just a tool having money doesn't make you a good person and it doesn't inherently make you a bad person having money just gives you money having money gives you the opportunity to send your kids to a better school having money gives you the opportunity to go on better vacations having money gives you the opportunity to buy better gifts for your spouse having money gives you the opportunity to feed more hungry people having money gives you the opportunity to drive a better car okay having money is a tool it does not make you a better person it does not make you a good person it's just a tool and you as the owner and the holder of your money get to decide how you get to spend that money so you got to understand that money it does not make you a good person it doesn't make you a bad person it just gives you money that you can use as a tool and the last thing you gotta understand about your mindset of money and wealth is you gotta stop blaming luck for the reason why people become successful because that's one big lie everybody says that oh this person became wealthy just because they had rich parents or because they got lucky or whatever but the reality is that's just not true i mean fidelity did a study where they looked at millionaires across the board and what they found is that there was a portion of millionaires out there that inherited a big chunk of their wealth but it wasn't everyone i mean it was only 12 percent of millionaires out there that inherited 10 or more of their wealth so yeah there is a factor of luck involved but for 88 percent of millionaires out there these are people that did not get this wealth inherited to them or do not have rich parents they did not grow up going to country clubs they did not have a trust fund these are people that created their millions themselves now this is not to say that there's no luck involved in becoming successful or wealthy there is some luck involved but what you have to understand is that the majority of people who became wealthy these are not people who were just given their money these are people who worked hard and found a way to become wealthy and what you find out is the harder you work the luckier you become because luck happens when hard work means opportunity and so the harder you work the more prepared you will be and the more ready you will be when the opportunities come your way are there some people who have the money just fall onto the lap yes some people just win the genetic lottery or some people just win the actual lottery and some people just have the money given to them but that's the exception to the rule that's not the rule the majority of people who become wealthy are people who created themselves by understanding the mindset and the four other things that i'm about to talk about when you see somebody who has become wealthy all you see is the tip of the iceberg you see where they are now you see the car that they're driving and you see where they live and it looks nice and it's easy to say that they became lucky but what you don't see is all the sleepless nights all the hard work that they went through and all the kind of pain that they went through to get to where they are today and so if you want to become lucky you got to look a little bit deeper and look beyond just the tip of the iceberg and see what it really takes to get there and you got to stop blaming other people for becoming wealthy and understand how you can do it yourself the second thing you got to do is work on your income so this is where things get a little bit tricky because first we develop the mindset and now once you've got the mindset you got to start earning money now there's a couple things you got to understand about your income the first thing i understand is it's not just how much money you make it's what you do with the money you make but having more money can accelerate your path to becoming wealthy and this is where you got to make some hard decisions about yourself if you're not happy with the amount of money that you're making then you gotta do something about it look at yourself in the mirror and ask yourself why are you not making the money that you deserve is it because you don't have enough skills not enough degrees or are you working a job where you're just getting underpaid if you're not happy with the amount of money that you're making you got to stop complaining about it and you got to start doing something about it if you don't have the skills and you don't want to go back to school or if you don't want to learn a new skill then maybe you got to take on a new job maybe you got to learn a new side hustle maybe you got to start a side business and do something to supplement your income if you're just complaining about it and you're saying man i wish i made more money i wish they would just raise my wages for doing nothing more except what you're doing right now and then just playing the emotional game and hoping that luck is gonna come through the door and put a million dollars on your lap if you're not happy with how much money you're making ask yourself why and then do something about it depending on where you are and who you are that might mean adding a second part-time job to your routine and i know that's hard and it takes a lot of work but i've been there i went to law school full time and i was running my business full time and i went to acting school in the evenings it is long it is hard but it's a sacrifice that you got to be willing to put in today if you want to achieve more income so you got to know what you want and if you're not getting what you want ask yourself why and then figure out what you got to do to get the income that you want the second thing that you got to understand when it comes to your income is that there's a lot more to becoming wealthy than just how much money you make i'm going to talk about this in the third point but having more income only does good if you know how to use the money that you're making if you're just making more money to drive a better car to live in a bigger home you're just spreading yourself thinner and now you have to work even harder to keep making all of your payments so what you got to understand about your income is there's a lot more to becoming wealthy than just making a lot of money it's what you do with the money you make there's a reason why so many high income people so many high income doctors so many high paid athletes so many people who won the lottery still live broke because they're living paycheck to paycheck they're making a lot of money but they're spending all the money that they make so you got to understand how an income plays a part in your life yes having a big income can help you accelerate your path to wealth but it can only do that if you're using your income the right way and that's what i'm going to talk about right now number three you gotta pay yourself and stop spending all of your money so americans have an issue where when they make money they feel like they deserve to spend this money and they deserve to have these nice things because it's very hard for americans to go through the short-term pain for the long-term freedom that you can get from not spending all of your money i mean it's just a strange culture that we live in where everybody feels like they need to have the newest iphone they feel like they need to have the newest laptop they feel like they need to drive a brand new car they feel like they need to live in a big home they feel like they need to have all the newest things and all these things keep costing you money and now you look really good on instagram and you have all these nice things but you have no money left to pay yourself because you're playing in this game living off your feelings where you spend money based off of what you think will feel good right now instead of what's good for your wallet long term the vast majority of americans are living paycheck to paycheck now if you ask these people why everybody will say it's because they're not making enough money we say it's an income problem but that's like the government talking the government always says they're not making enough money but we never look at how much money we're spending there's also a spending issue there's two sides of the coin it's how much money you make and it's what you do with the money make we can keep blaming us how much money you make and sure that might play a part in it but that goes back to what i just said before if you're not making enough money why is it can you work a second job can you do something else can you learn a new skill can you make more money sure that might play a factor but on the second side of the coin is how are you spending your money if you're living paycheck to paycheck and you drive a brand new car and you have air pods and you have a brand new iphone then chances are there's more to this problem than just how much money you're making you got to look at what you're doing with the money you make if you've been watching my videos chances are you've heard me talk about guacamole a million times on our channel now the reason i talk about it so much is because i love guac and i have the money to afford an extra side of guac no problem but when i go to chipotle i never order an extra side of guac because it makes no sense for me to pay three dollars for a small little exercise guac when i can go to kroger and pay a dollar to get a whole avocado and now i got four sides of guac for a fraction of the price yeah people keep going to chipotle and buying the extra guac now i know what you're thinking oh just breathe a three dollar side of guac is not the reason why people are living paycheck to paycheck yeah i get that a three dollar side of guac is not the reason why it broke and spending four dollars on a coffee is not the reason why it broke but it's not having the right mindset because you're spending money on things that you should not be spending your money on right now because right now what you need to be doing is paying yourself because if you're complaining about living paycheck to paycheck and not having enough money yes we can look at how much money you're making and you should you should work on how much money you're making to work to increase that but you also got to look at how you're spending your money are you spending your money on things that you don't need because that's the easiest way for you to have some more money left over to start paying yourself right now is just by not spending all your money if you look at things strictly financially do you know how rich people get rich and how wealthy people stay wealthy it's pretty simple they spend less money than they have they live like they're broke they don't spend every dollar that they make on nice cars and clothes and shoes they spend some money on themselves and when i say pay yourself what i mean by that is you're saving some of your money for an emergency and you're investing some of your money that way your money can grow and make you more money if you are not paying yourself if you're not spending some of your paycheck every month to go directly into your savings account and if you're not having some of your paycheck go directly into your investments every single month then you are not paying yourself and you are doing yourself a disservice because all of your money is going up making everybody else around you rich but it is leaving you broke the issue is we live in this culture where we all live in our feelings like we feel like we worked really hard so we deserve to reward ourselves by going on this really nice vacation and we deserve to reward ourselves by buying this really nice car buying this watch now these things are nice i want you to have a nice vacation i want you to have a nice car i want you to have a nice watch but i don't want you to sacrifice yourself from paying yourself because then you're going to pay the price in the future i want you to have these nice things but i also want you to be able to afford it first let me let you in on a little secret nobody who's worth a million dollars is flying on a private jet unless you're one of those people on social media that's uh taking pictures on a private jet that way you can sell more of your course on how to be rich by living your life and doing whatever it is you do but nobody who's actually worth a million dollars is flying in a private jet because people who are actual millionaires understand what it took to become a millionaire and they're not going to just blow all their money on something that's not going to help them keep their wealth and grow their wealth you got to stop living this instagram flex life where you're living life just to show off your income what you got to do right now is live below your means and pay yourself first that way you can use your money to build your wealth use your money to build your savings that way you can be free and once you pay yourself then you can live your life the way you want without worrying about the price i probably should have put a trigger warning in the beginning of this video where if you're easily triggered don't watch this video but i did tell you that you got to step away from your feelings in order to really do these things so let's move on to number four you got to stop the payments if you want to become wealthy now look there's two types of perspectives when it comes to your payments and the way you live your life on one side you have the dave ramsey approach which is the no debt no financing anything approach whenever you want to buy anything you got to buy with cash whether it's your investments or your liabilities no matter what you want to buy you got to buy cash on the other hand you have robert kiyosaki who is essentially like finance everything never pay for cash for anything and then use your money to buy investments and have your investments pay for all of your stuff both of these options can work obviously one is less risky than the other and one is harder to achieve than the other because now you have to afford everything in cash but what you really got to understand now is the difference between an asset and a liability and when are you stretching yourself thin by financing something because when it comes to things that are not making you any money you should not be financing it because when you're financing your clothes now you're paying interest on something that is not making any money and something that is depreciating in value so not only are you paying top dollar you're paying interest on that and this thing is just losing your money kind of like what i mentioned a minute ago one of the easiest ways to keep more money for yourself is to stop having money leave your wallet and one of the ways that you can do that is stop financing things and pay off the debts that you do have that way you don't have money constantly leaving i mean you can think of it kind of like a cup and at the bottom of a cup you have a hole this hole is your payments now the more debts that you have and the more payments that you have you have your car payment you have your mortgage payment you have the financing payments for your clothes you have your furniture payments you have your credit card payments the more payments that you have the more holes that you have and now when you take your income which in this case would be like a glass of water and you pour it into the cup the more holes that you have the harder it is for the water your money to actually stay in this cup so if you want to keep the money in the cup what you got to do is you got to seal the bottom and you got to stop having those payments that way water can stay in your cup and it can start flowing upwards that way now you have the money to create more income coming into your cup so when i say stop the payments that means one on all the reliabilities the things that are not making you any money your credit card payments your car payments these are things that you got to pay off quickly that way you have less money leaving your account second when it comes to buying more things no more financing anything that does not pay you and number five is you got to have patience because you got to understand that building wealth is a marathon it's not a sprint this is not something that's going to happen overnight and when you want it to happen overnight and you want it to happen quickly you're more easily to get caught into one of those get-rich-quick schemes and falling into risky investments where now you're spending a whole bunch of money on things that are not making you any money because when you jump into those get rich quick schemes the only person you're making rich is the person selling that get rich quick system now if you do want to accelerate your wealth there's nothing wrong with that but you just got to know how to do it the right way on one hand you got to work on earning more money and now as you're earning more money you got to use more of your money to actually pay yourself that means saving your money for in emergencies and putting more money towards your investments that way you have more money working to actually build your wealth so if you want to do that hey great work on earning more money but understand that takes patience too building a business building a side hustle getting the raises doing all you got to do to earn more money does take time i mean think about like building a youtube channel you don't build a youtube channel overnight these are things that take time to build you want to build a business it takes time to build these are things that take years and so if you really want to become wealthy you got to have the patience in your mind and you got to understand that this is not something that's going to happen tomorrow this is something that you're working on for your lifetime that way you can live wealthy and live free it's not something that's going to happen next week next month next year this is something that we're building for the long term so you got to have the patience the patience in order to build the [Music] wealth if you went out when you asked the majority of people how do most people become millionaires they'll tell you that it's because of rich parents or being gifted or having a trust fund or winning the lottery or getting really lucky you need to have one of these five things if you want to become a millionaire but that's just not true 88 of millionaires were self-made these are people that created their wealth and their money themselves that did not have everything gifted to them yeah you had 12 percent of millionaires that had rich parents or had money given to them or had all these privileges but the vast majority of millionaires created their wealth themselves so if you want to understand how to become a millionaire yourself you got to understand what these people did out of the people that became self-made millionaires there are three general categories or ways that people became millionaires the first is start a very successful business number two is earn a very high salary or a third and invest a little bit of your money every time you get paid look some of the most successful people in the world are people that start and build their own businesses but the reality is building a business is not easy and it is not for everybody it looks cool and looks attractive because entrepreneurship is fun but it is hard work and you do not get weekends off you do not get evenings off building a business is hard and it's not for everybody and so that is not the path to becoming a millionaire for the majority of people and if you look at trying to earn a super high salary like people earning two three four five six hundred thousand dollars a year or more that's not really accessible for most people either because maybe you can need a special degree maybe you got to go out and become a doctor or maybe you got to go and become a ceo a big company but yeah that's possible for some people but not everybody so i guess both of these two options are out for most people but the third option investing a little bit of money every time they get paid is actually how most people become millionaires it's a slow and gradual process where every time you get paid regardless of how much money you're getting paid you put aside a little bit of money and you keep slowly investing it and you let this money that you're investing grow and compound and as this money is growing on compound you keep fueling the fire because every time you get paid you're just putting more and more money into this ball that's growing and building your wealth that way you can become a millionaire in your lifetime by letting your money go out and work i'm going to show you a few different ways that you can do that but before i get into that i need you to do me a quick favor and smash the thumbs up button below let's go over some quick numbers let's start by going over something that most people should be able to do let's assume that you can put aside ten dollars a day which is right around three hundred dollars a month if you take this ten dollars a day three hundred dollars a month and you keep investing it every single month i'll talk about where and how to invest in just a little bit but let's assume that you can get a seven percent annual return on your money on average so this is a below average return okay something conservative but if you keep investing that's 300 a month over the next 45 years so if you do this from 21 to 66 the 300 a month is going to grow to 1.1 million dollars on the side now if you're saying that you don't got 10 a day or 300 a month yet you also have a 300 a month car payment or more then you might want to rethink where and how you're spending your money if you want to be a little bit more aggressive and now you can put aside twenty dollars a day or six hundred dollars a month and you can get the same seven percent return which is below average below the historical average then you will be able to grow this money to 2.2 million dollars over a lifetime on the side and let's have some fun what if you could be even more aggressive and you could put aside a hundred dollars a day which is right around let's say three thousand dollars a month if you can do that and you can maintain the same below average return and over your lifetime you will be able to grow your money to 11 million dollars on the side now while this all sounds good in theory it's still theory because now the question is how do you actually make it happen because me sitting here saying that if you put 300 a month into your investments that you would have grown it to 1.1 million dollars it's kind of like the people who say things like if you invested 45 cents in tesla or bit killing then the 45 investment would have been worth 4.4 million dollars today so you are very not smart for not making that 44 investment 20 years ago it's impossible to predict what is going to happen so the question is what do you do today to actually build these millions in your lifetime how do you do this practically and how do you make it happen well the first part of making it happen is you got to work on this side of the equation how do you get this extra cash how do you find this extra cash every single month and there's two things you got to do on the mental side of how do you actually get this cash the first thing you got to do is you got to stop limiting your feelings we live in a culture where people live in their feelings where when people want something they want it now and when you want it now you're gonna do whatever it takes to get it and when i say do whatever it takes i don't mean but in the hustle and get the cash to actually be able to afford it i mean do whatever it takes like put it on your credit card or finance it or pay it off in installments if the way your mind works is i just made a thousand dollars so how can i spend this thousand dollars i can go on this vacation i can buy these shoes i can go out to eat here you will never have a chance to achieve this it's not possible okay because the first thing you gotta do is you got to break out of your feelings and understand that now anytime you get paid does not mean that you got to go out and spend this money anytime you get paid means now you have more money to invest because you got to put some money aside towards your investments so the first thing you got to is you gotta stop living in your feelings and then you gotta stop spending all your money you gotta figure out what that right investment amount is for you i recommend 15 of your incomes anytime you make a dollar 15 cents should go towards your investments but i'm just a random guy on youtube you got to make your own decisions the second thing you do after you start putting some extra money aside is now you got to start growing the pot you got to start earning more money the thing that bugs me about traditional financial planners and traditional financial planning is that traditional financial planning focuses just on pinching pennies but the thing that you got to understand is that at the end of the day a penny saved is just a penny yes you should not be blowing all your money yes you should not spend your money as soon as you get it yes you got to be smart with your money but i also want you to work to grow the pie instead of just working to figure out how can you squeeze some extra pennies because at the end of the day there's a limit to how little you can spend but there's no limit to how much you can earn so once you understand how to spend your money once you understand how to live below your means once you understand how to build the system where anytime you get paid 15 of your paycheck is automatically going to get invested the next thing you got to do is worry about how can i grow the pie how can i make the buy bigger because if you're making 40 000 a year and you're investing fifteen percent that's good but if you're making four hundred thousand dollars a year and now you're investing fifteen percent that's even better again going back to the beginning of this video most people are not going to be able to start their own business and most people are not going to earn a doctor's salary but what you can do is you can supplement your income if you're not happy with how much money you're earning maybe you can earn a second job maybe you can ask for a raise maybe you can get a promotion maybe you can start a side hustle or do something to earn some extra cash there are a lot of ways that you can supplement the income that you're getting right now that way you have more money to grow this pot that way you have more money going towards your investments so the first thing you got to do if you want to get this is you're going to work on this that means you got to stop living in your feelings and you got to find a way to earn some more money that way you have this cash to grow once you got this cash right here the next thing you got to figure out is how do you make this interest this return on your money what do you do with this extra cash that you're investing by the way if you're interested in learning more about my 15 rule and how to build a financial system that works to build you wealth to build your savings that way you understand how to use your money i already made a video on youtube where i explained how all of that works so if you want to watch that video i will link it for you in the description below but let's talk about how actually invest your money now the whole idea of investing is you want to create this machine that is printing your money without you physically having to work but in order to create this machine you got to invest one of two things either you got to invest your time or you've got to invest your money now for a lot of people either you're not going to have the time or you're not going to want to put in the time to do it so i'm going to focus it on the passive investments because a passive investment is where all you're doing is you're taking some of your cash and you're putting it towards creating this machine that is printing your money without you physically having to go to work because you're going to work to get paid now you're getting this paycheck and you're going to take a piece of that paycheck and you're going to put it towards buying this machine that's going to print you money now it's not an actual money printing machine because you can go to jail for that but it's a kind of a theoretical machine that's going to print your money through your investments the whole idea behind making money is the more value that you can provide to the marketplace the more money you're going to make that's why doctors earn more money than cashiers because doctors provide more value to the marketplace than cashiers do now this doesn't mean that your life is not valuable or that you're not a valuable person as a cashier this just means in the economic marketplace a doctor provides more financial value so they attract more money than a cashier does so now when it comes to your investments the whole idea here is you want to put your money in a place that is going to create value or attract value so you want to use your money as a tool to kind of create this value thing that way it can continue to pay you without you having to physically work to continually build value so maybe there's other people involved or there's a team involved where this machine is now working to build value and create value for you because you have put your money towards it and your time is out doing something else the most accessible way to do that is by putting your money in the stock market because the stock market is a place where you can go out and invest in big companies so amazon mcdonald's facebook these companies trade on the stock market so when you go out and you buy shares in a company like amazon or mcdonald's you'll become one of the owners of amazon or mcdonald's now you don't get to tell amazon and mcdonald's how to run the company and you don't got to go to work for amazon or mcdonald's but when these companies make more money so do you maybe your stock price will go up because if you buy a stock for 100 a share and it goes up to 200 a share and you sell it you just made 100 the second way you can make money is through dividends when a company like mcdonald's has a whole bunch of cash in their bank account at the end of the year they can take some of this cash and just give it away to the shareholders people like you investors through dividends and so these dividends are literally just cash payments that you get every three months every quarter for doing nothing except owning the right company between 1926 and 2018 the average return for the s p 500 which is an index in the stock market which all it means is it's a group that represents the top 500 companies in the stock market this s p 500 over those years grew by an average of 10 to 11 a year on average this doesn't mean that every single year the stock market's going to go up by 10 to 11 that means over the long run the stock market has grown by 10 to 11 a year for almost the last hundred years but this also includes the fact that sometimes you're gonna have stock market crashes and other times you're gonna have stock market rallies over the long run you've seen the stock market grow by around 10 a year for the last century so if the stock market continues to grow at its previous rates and you can just invest your money and even get a below average return then retiring a millionaire is no problem because you can just throw your money into the stock market and hopefully get the same returns and boom there you have it the millionaire status except there's a couple issues with that the first issue is many people do not believe that the stock market is going to continue to grow at the same rate that we saw happen over the last century because our economy is a whole lot bigger so it's not as easy for our economy to grow as fast as it once did which is why we might not see the same returns in the stock market over the next century the second issue is you gotta know how to actually invest your money in the market because if you just take your money and you randomly put it in some stocks then that doesn't mean you're gonna meet the stock market return right because the s p 500 is an average of 500 companies in the stock market it's not the entire stock market during the last century you had a lot of stocks go bankrupt and go bust and so if you invest in a company that goes bankrupt or bust then you lose your money and you won't get these returns even though the stock market went up because the company you invested in went down so now given these circumstances how can you still get a good return in the stock market if our economy isn't growing as fast as it once used to and how do you invest your money in the stock market without worrying about the company you invested in going bankrupt let's start with this when it comes to investing you got to first understand the correlation between risk and return because in general you can get a better return if you're willing to take on higher risk and so if the general stock market sees lower returns in the future you can still try to get higher returns but that might mean you have to take on higher risk now one of the ways that you can mitigate risk meaning lower the risk is by having the right education and understanding what you're doing because if you have more knowledge then you can kind of lower some of this risk but you got to understand yes you can still get higher returns but you got to understand how to kind of manage this risk too so the s p 500 index the one that i just talked about a minute ago that was averaging 10 to 11 returns a year the s p 500 is a group of the 500 largest and most established companies in the stock market and so when the company is large and established it's not going to be able to grow as fast and so if you want to get better returns then you're going to have to invest in a company that's a little bit more innovative that's trying to grow because now these companies have more room to grow because when a company is already large and it controls the entire market and it doesn't have that much more room to grow it can't grow as fast versus a company that's smaller and trying to innovate and grow there's a whole lot of room for opportunity and so they can see much better returns so if you're trying to get better returns then you can't be making the same investment decisions that people were making 30 40 50 years ago because back then in the 70s if you wanted to invest your money all you had to do was invest your money in the general stock market and you knew the united states economy was booming and you knew the united states economy had a lot of room to grow and so these big established companies still had so much room for opportunity and growth which allowed this easy general stock market funds to grow and boom which allows people to grow their money and compound their money very quickly you might not have the same opportunity today just because our economy is so big and these companies are so big they don't have the same room for growth as it once did or at least that's what people think and so if you want to continue to get that same growth you got to be a little bit more innovative that means instead of just investing in your traditional large blue chip companies and these funds that give you exposure to the general stock market maybe you got to start looking at innovative companies or value companies or growth companies because these are smaller companies that are kind of like more of your startups that have a lot of room for growth now obviously there's more risk here because if you're investing in a startup there's a chance that this company will fail but if you want to continue to get those higher returns you got to start educating yourself here that way you can make smarter decisions that way you can get the better returns does it come with more risk yes because you are never guaranteed to make money when you invest you might even lose money so make sure you always do your own due diligence and never blindly listen to a random guy on youtube now when it comes to actually investing your money and putting your money to work there's a couple different ways that you can invest your money in the stock market the first way is you can find individual companies to invest in so you can go out and invest in individual companies like mcdonald's or tesla or facebook or whatever but when you invest your money in these companies you take on all the risk because if you invest your money in mcdonald's and the mcdonald's executives run the company into the ground and the company goes bankrupt now your investment account is bust so one of the things that you can do to protect yourself especially if you're not planning on becoming a full-time investor or if you don't plan on spending at least a few hours a week researching your investments and one of the things that you can do instead of investing in individual companies is just invest in etfs and etf is a fund that gives you exposure to a whole bunch of companies that way now you don't got to worry about trying to be in the stock picking game because you can invest in a fund that gives you exposure to a whole bunch of different companies you can buy or sell shares of an etf the exact same way you do stocks the only difference between an etf and a stock is when you invest your money in a stock you get exposure to one company but when you invest your money into an etf you get exposure to a whole group of companies so kind of like what i talked about before if you just wanted to get general exposure to the stock market then you could invest in an etf like v-o-o or s-p-y both of these etfs give you exposure to the s p 500 and both of these etfs give you exposure to the top 500 companies in the stock market now again this goes back to the concern like we just talked about yes this will give you exposure to the top 500 companies but we just don't know if the stock market in our economy is going to be able to grow at the same rate that we saw happen over the last century maybe it will maybe it won't but the thing that you have to understand about these is these typically come with less risk because if the economy continues to grow and chances are our big companies are going to continue to grow which means chances are these funds are going to continue to grow so less risk and less potential return however is more of a safer investment over the long term yes you might see market crashes which makes it kind of risky in the short term but over the long term if you believe in the united states economy then these are generally kind of your safer investments if you're looking for more value type investments where you can hopefully try to see bigger returns but also come with more risk and you can look at investing in funds like a r k k this is arc and q q q again these are just examples make sure you do your own due diligence and as a quick disclaimer i do have some my own money nvo and arc so these are a couple examples of etfs that are trying to invest in more of your value companies more of your innovative companies that way you can hopefully see bigger returns over the long term but again it comes with more risk so you got to do your own due diligence and understand how to balance it out the key for this type of stock market investing to work is you got to understand that this is not a one-time investment that you're going to make this is something that you got to keep consistently investing like i talked about the 15 rule earlier or anytime you get paid a portion of your paycheck is going to go directly to your investments that way you're consistently investing a little bit of money that way investments can compound here your money keeps growing here and you keep adding fuel to the fire because anytime you get paid you're adding more money to the buyer you're adding more money to this machine that is working to make you more money before i move on to the next way that you can invest your money if you do want to learn more about how to do this and how to create a passive system that where money can automatically be invested and how to find a brokerage that can do this for you for free our team broke down how to do this on our website the minoritymindset.com and you can read that article by clicking the link in the description below the second way that you can invest your money which is actually my favorite way to invest my money is by investing your money in real estate the way real estate investing works is you can go out and you can buy a property like a house and when you buy this property so let's say this is me i'm gonna go and i'm gonna buy this property got to drive me a nice mustache i go out and buy this property and then i'm going to rent this property out to somebody else i'm not going to live here i'm going to let this person come here for their family they're going to live in this property they're going to use my house they're going to live there and in exchange for them living in my property every single month they're going to send me a one thousand dollar check because that is the rent payment and now out of this one thousand dollars i'm going to use this to pay my taxes my insurance my maintenance my management fees my vacancy costs and then if i have any debt on the property it's also going to pay some debt and if i do this the right way i'm going to have some money left over every single month and these profits go into my pocket for my investment the thing that really differentiates real estate investing like this and investing in stocks like i talked about before is when i invest my money in real estate i am looking for passive income i am looking for cash flow the most important thing here is not how much i think this property is going to be worth in five years or 10 years in the stock market that's what a lot of people are looking for they're looking for companies that are going to be worth a whole lot more that way they can sell their stock for a big profit here i'm not really interested in that the most important thing here is this this cash flow how much money do i got to invest today and how much money am i going to make every single month so it's a different investment strategy because here my goal is that passive income is that cash flow and my investment goal is on a low end seven percent but typically i'm looking for an eight percent annual return on my money so if i invest a hundred dollars today i want to get eight dollars back next year and the year after that and on and on and on so these are the type of returns that i'm looking for when i invest my money in real estate and this is in the form of passive income or cash flow the thing that makes real estate a little bit more difficult is in the beginning while this is called passive income it's really not passive especially in the beginning because you got to jump over this hurdle to understand how real estate investing works and you got to find the team i mean you got to find your real estate agents your property managers your contractors you got to work with city officials and so if you don't know how any of that works it's going to be a big time commitment and you need a lot of capital like this property might cost you 100 000 so you're going to need either a lot of cash you're going to go out to the bank and you've got to borrow some money versus if you're investing your money in the stock market you can start with 100 and it only takes like five minutes here buying a property can take you months you have this element of non-passiveness because you got to find the deals you're going to render with them you got to get them leased out but once you get the hang of things and once you get this property ready to go he can hand over the keys to a property management company and then they can be fully passive if you know how to do it and so it takes that hurdle to jump over but once you jump over that then it can be completely passive now again the key here to succeed over the long term is to keep compounding your money that means when you have this money growing in this real estate property you've got this passive income coming in you can do a couple things with it you can use this money to go out and go on a nice vacation or you can reinvest this money to go out and buy a new property so that means over the years you're going to save some more cash to buy another property and then you're going to use this cash to buy you more properties as well so this cash should help you fuel you to buy more properties quicker that we can increase the amount of cash flow and passive income you have so it's kind of this compound interest game whereas how fast can you accumulate these properties and how fast can you grow this passive income but now once you understand all the things that i talked about first you got to understand the mental game where you got to stop living in your feelings and you got to stop spending all your money and then you got to work on how to grow the pie how can you attract more money that we have more money to invest then it's all about investing your money and you got to know your goals now you got to invest your money into places where you're going to grow your money and now it's just a math question where can you invest your money what type of returns can you expect and how long is it going to take you to hit that million dollars based off of how much money you're investing once you understand the whole system and it's just a numbers game where you got to just keep following the system and you got to just keep pumping your money into your investments that way you can build this nest egg that's growing to make you wealthier before we get into the next clip if you are interested in learning more about money management and investing our team put together an amazing guide that i think you'll love and you can get this guide for free when you sign up for a daily newsletter if you want to read a free guide i got the link to where you can do that in the description below [Music] if i told you that i am budgeting my money right now that way i can live off of seven thousand dollars a year you're probably gonna think that i'm never gonna eat guacamole again or i'm gonna live in a box or i'm gonna move to a third world country but here's the thing about 50 years ago if you were living off of seven thousand dollars a year he'd be living pretty decent i mean seven thousand dollars a year 50 years ago is like 50 000 a year today this is where people think about building wealth and retirement and financial freedom all wrong because people always talk about okay when i become financially free my goal is to be able to live off of fifty thousand dollars a year but your fifty thousand dollars a year that you're thinking of is today's money fifty thousand dollars a year today is very different than fifty thousand dollars a year fifty years from now just like how seven thousand dollars a year today is very different than what seven thousand dollars a year was back 50 years ago so when we're talking about building wealth and investing your money for retirement or this financial freedom or whatever you want to call it you got to understand two things one you gotta understand how your money works that way you're using the money right way and the second you gotta know how to invest this fifteen percent and why you need to be investing this fifteen percent but before i 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 that thumbs up button and youtube is much less likely to show you and other people our financial news and education videos when the majority people think of money they related to stuff how much stuff can my money buy me if i make a thousand dollars what is this thousand dollars worth if you ask the majority people you relate a thousand dollars to how many nights can i go out how many vacations can i go on how many nice clothes can i buy how many times can i buy extra guac so the majority people when you think about money is what stuff can i buy the reason we call ourselves the minority mindset is because we think differently than the majority of people when i want you to think about money i want you to think about money in terms of how many assets can you buy an asset is something that makes you money and so now when you have a thousand dollars or ten thousand dollars or a hundred thousand dollars i want you to ask yourself okay now that i have this cash how many assets investments can i buy which are things that are gonna make you more money when i was younger and i made money the question that i had was how can i use this money to improve my car i started by tinting my windows and i got new rims and i got subwoofers put in then i got all this other stuff put in and it was always this kind of like balance of okay i made a thousand dollars what can i do with my car oh i made two thousand dollars how can i upgrade my car so anytime i made money before it was how can i spend this money in a way that's gonna better my car or whatever i have this completely changed when i started investing in real estate because after i bought my first real estate investment property it was making me something like 250 a month in profit every single month and once i got it up and running and going it was 250 a month passively which means i wasn't doing any work every month 250 was being deposited into my account now all of a sudden the way i thought about money completely changed because now i'm thinking in terms of houses and real estate instead of cars because now in my mind i'm thinking okay if i can make 250 a month from one property that means from two properties i could make five hundred dollars a month with ten properties i could make twenty five hundred dollars a month with a hundred properties i can make twenty five thousand dollars a month every single month passively without me having to do any work as you grow you'll start to realize that there's easier ways to do this like you might not have to buy 100 single-family homes maybe you can buy an apartment complex and some properties are going to pay you more per unit than others but in general that mindset is true now i'm thinking about assets instead of liabilities i'm thinking okay when i make money what investments can i buy what assets can i buy how can i use my money to make myself wealthier how can i use my money to build more assets how can i use my money to create more value instead of just using my money to spend on nice things you want to have your nice things i understand that but when you make money i want you to think about it in terms of assets instead of liabilities first once you start changing the way you look at money it is going to be so much easier for you to start investing your money and put more money aside to investing because before putting this money aside was a chore because now you are sacrificing a nicer car you were sacrificing another vacation you were sacrificing all these nice things but now you're not making that sacrifice now you're working more towards your goals of buying more assets because that's the way you're looking at money now you look at money as a tool to buy you more assets which allow you to have nicer things and now when you change the way you look at it it's easier for you to make more of these sacrifices to buy more assets that way you could have more freedom have more wealth and then ultimately have more of the nice things and nicer cars and nicer vacations now let's get into the numbers because if you're subscribed to our channel chances are you've heard me talk about our 75 15 10 plan which says for every dollar that you earned 15 cents is the minimum you should be investing 10 cents is the minimum we should be saving and 75 cents is the maximum you should be spending now i'm going to go over the 15 investing why 15 and what the numbers actually look like when it comes to building your wealth here's the thing investing is the real secret to building wealth for regular people it is not building the next amazon it is not finding the next hot stock before it pops it is not winning the lottery it's not having a job that pays you a million dollars a year yes these things can help but they are the exception to the rule they're not the rule so if you really want to build wealth the secret secret is investing your money and the issue here is so many people are not doing this even though i think we should know this by now it's hard because on one hand we're never taught about money like we don't go to school learning about how money works how budgeting works how investing works how to build wealth and on the second side we just don't really have kind of a a good financial culture when it comes to spending because we live in this debt culture where it is completely normal to finance your wardrobe and so this is kind of the culture that we live in and the only kind of financial education that people get nowadays is you go to your job and then your job gives you this packet which says here's your 401k information that's why right now half of america is not investing any money not a single penny at all and on top of that the people that are investing most of them are only investing their money in their 401k even though your 401k was never intended to be your sole retirement or investment plan so if we kind of diagram this out if this pie represents america that's a very lopsided pie if this pie represents america only half of these people so these people are not investing any money only half these people are investing any money at all now out of these people that are investing any money the majority of these people so something like this are investing their money only in their 401k this is the only people that are investing their money in their 401k and out of their 401k these are the only people that are creating their own wealth and retirement outside of what's kind of just given to you out of these people that are only investing their money in their 401k which was never intended to be your sole retirement or wealth building or investment tool out of these people the average 401k contribution is just seven percent of your income so you have a huge chunk of americans that are not investing any money and then you have this big chunk of people that are investing their money but they're only investing their money in their 401k and the average contribution is just seven percent which means you have only a few percentage of americans that are investing more than seven percent of their income every single year towards their wealth towards their retirement towards their financial freedom if you really want to become wealthy you got to invest more than seven percent of what you're making now let me show you why investing a minimum of 15 of your income is so important let's assume that now when you're 21 years old you go out and you get a job paying you just 30 000 a year so you are making 30 000 a year and let's assume that you're investing 15 of your income every single year before taxes so that means you are investing right around 4 500 so i'm also going to assume that you're working a job where your salary is going to grow over time and let's assume that your salary just grows by an average of 3 a year now i know over time hopefully your salary will grow by more than this but let's assume just three percent a year because sometimes you're gonna get a raise sometimes you're gonna go to a new job maybe you'll get another bump there maybe you get a promotion but every single year you get a three percent annual bump and as you continue to make more money you continue to invest just 15 of your income if you do that between the age of 21 and 65 you are going to save so at 65. you continue to do this you are going to put aside 400 000 over these 44 years now if you just saved this cash and you started living off of let's say 30 000 a year then this 400 000 would last you about 13 years after 13 years this 400 000 would go away but you also got to remember that this is 400 000 about 44 years from now this 30 000 a year in 44 years it's not going to have the same value as 30 000 today i mean by the time you're 65 if you continue to grow your income by 30 a year you're gonna be making more than a hundred thousand dollars a year so if you want to continue maintaining your lifestyle at 65 that means you got to pull out a hundred thousand dollars a year here so your money's only going to last you four years by the time you're 70 you're gonna be broke so this saving model doesn't work which is why i want you to invest this fifteen percent a year if you invested just fifteen percent a year and there's four hundred thousand dollars put into investments and you got a below average return for the course of your life and you only got a four percent and the return on your money if you were able to get a four percent average return on your money over your lifetime then this four hundred thousand dollars will grow to right around nine hundred thousand dollars quite a bit more but you gotta remember this is still quite a bit below average if you got an average return of seven percent a year then this four hundred thousand dollars you invested over your time would grow to 1.9 million dollars on the side for you to now use however you want and if you could grow your money by 10 a year which is just a little bit above average especially when you account for inflation then your money would not grow to 1.9 million dollars it will grow to 4.8 million dollars but the only way this is going to happen is if you're investing 15 of your income every single year now look this is where you got to really understand money because so many people make this mistake that when they're planning for wealth or retirement or financial freedom they're thinking in today's dollars they're thinking okay i'm young today i'm hoping that i can live off of thirty thousand dollars a year or fifty thousand dollars a year a hundred thousand dollars a year because they're relating that to today's money but thirty thousand dollars a year today is not going to be the same as thirty thousand dollars a year forty five years from now that's why your income is hopefully going to be adjusted with inflation and go up by a couple percent or a few percent a year if you're 21 today and you're making 30 000 a year by the time you're 65 if your income grows by 3 a year you're going to be making something like 106 000 a year by the time you're 65. so if we assume that a hundred and six thousand dollars is what it takes for you to keep the same lifestyle as 65 as you do in 21 that means you got to be pulling out a hundred thousand dollars a year when it comes time for you to retire in order to keep the same lifestyle that you have today now depending on how much money you're making that might seem like a whole lot of money or not enough money but what you got to understand is that in 45 years 100 000 a year is not going to be as much as a hundred thousand dollars a year today so you got to kind of plan for that with your money and so if we're looking at this kind of income and you're thinking all right if i want to maintain my lifestyle i got to be pulling out a hundred thousand dollars a year if you have four hundred thousand dollars sitting there that's not gonna cut it you're not gonna have a very nice retirement or financial freedom because after a few years you're broke now here if you get the four percent a year now at least you have some more money and what you got to also understand is because this money is invested you're hopefully going to continue growing it after you start pulling money out too because you're not going to pull out all 900 000 at once at least hopefully not you're going to pull out a hundred thousand dollars let the other money grow pull out another hundred thousand dollars let the other money grow and kind of go on like that that way this can last you more than nine years and here assuming you can just get an average return now you really have money put aside for the rest of your life because now you got money for at least the next 20 years because even if you're pulling out a hundred thousand dollars at a time that means you have your money growing for another 18 years after you pulled this money out so you pull out a hundred thousand dollars your money continues to grow the next year because you only put out a hundred thousand you still got 1.8 million in there then the next year you pull out another 100 000 you have 1.7 million growing for you so as long as you got money in the account your money will continue to hopefully grow i want you to be an aggressive investor actually i need you to be an aggressive investor because social security is becoming a thing of the past and pensions are becoming history and so if you want to be able to take care of yourself and take care of your wealth and take care of your family and your finances you got to be the one to put it in place and you got to be the one to start taking action because you cannot rely on the government to take care of you because the government national debt is skyrocketing they have their own problems it is very hard and very painful to rely on somebody else especially the government to take care of you which is why i want you to be an aggressive investor that way you can take care of yourself and take care of your wealth that way you can live your life the way you want not worrying about what the government's going to give you now there are different ways that you can invest your money that way you don't have to actually sell your assets in order to have money in your hand like if you invest in rental properties investment real estate now you're creating passive income cash flow that way you can get cash in your hand every single month without you having to actually sell a property and if you're investing in dividend paying stocks now you're making money every quarter or every year from your stocks and you don't have to actually sell your stocks to get paid but i'll get to that in just a second now here's the thing most people don't start investing the money as soon as it turned 21. what you need to understand is the older you are the more aggressively that you need to invest just because you're older and have a start idea doesn't mean that you can't start it just means you got to be a little bit more aggressive there's in general two different ways that you can invest your money you have one way investing your money which is through retirement accounts this is through things like a 401k or an ira and then the second way that you can invest your money is through non-retirement accounts this is through creating your own stock brokerage account and investing your money in stocks or through investing your money in physical real estate not through a retirement account and so this is money you're not doing in a retirement account versus retirement accounts they can give you some tax benefits the whole purpose of a retirement account is literally to help fund your retirement because when you invest your money in these accounts you can kind of get a tax deferral right now and then your money can grow tax-free until it comes time for you to retire unless you use a roth then you're paying taxes today and then you don't got to worry about taxes when it comes time for you to pull your money out i'm not going to get into too many details on this but the whole purpose of this is for you to invest your money that way it can grow tax-free but you cannot touch your money until it comes time for you to retire if you want to learn more about that i will link a video where i've already discussed this in the description below the point that i'm trying to hammer home here is your retirement accounts are typically not enough because your 401k and ira has limits and you got to make sure now that you're not investing your money based off of what the government limits you at you got to be investing your money based off of the way you want to live your life in retirement that's why i say a minimum of 15 of your money needs to go towards the investments some of that money can go towards their retirement accounts but if that's not hitting the 15 percent then you got to be investing your money on your own too that means maybe you got to create your own stock brokerage account or maybe you got to start investing in your own physical real estate that way you can get passive income but here you got to know what your goal is first if you want to see your money grow quickly and you don't mind taking on more risk then you should consider investing your money in the stock market especially in growth companies and these kind of more startup companies where these companies are trying to grow as quick as possible as fast as possible there's more risk involved because startup companies can fail and they might not work out but you have the opportunity to see your money grow a whole lot quicker because these are companies that are working really hard to grow as big as possible and as fast as possible if you just want to see slow and steady growth in your money then you can look at investing your money in more blue chip companies these blue chip companies are your bigger established companies that have already been there for a long time they already have their systems and you're just investing your money in this company that way you can see your money grow slowly the advantage with this is you have less risk because these companies are already established you already know how they're making money and you can kind of reasonably predict how much money they're going to make and how fast they're going to grow so you have less risk and so you get lower potential returns one thing that i do want to mention about investing your money in the stock market is that the stock picking game is not for most people because picking stocks requires a lot of work a lot of research and a lot of upkeep if you're not willing to do that then instead of investing your money in individual companies like trying to find the next amazon or google or facebook then what you can do is invest in something called a fund like an index fund or an etf because these funds give you exposure to a whole bunch of different companies and so you have less risk you can put in less work but now you're kind of growing with the stock market i already made a video where i talked about that so if you want to learn more about how to do that i will link it for you in the description below if you're looking for income where now you can create cash flow or passive income coming into your account every month or every year where now you can have money in your hands without selling your assets then you want to be investing your money in things like dividend paying stocks because dividend paying stocks typically pay you a check every three months or you can invest your money in real estate because now if you own a house or you own an apartment complex now every single month the people that are living in your real estate or using your real estate have to pay you rent every single month because they're using your asset so now when you own these assets like a dividend paying stock or rental properties now you're making money consistently without you having to physically sell your asset real estate is also a really good store for your money because if you have a lot of cash and you want to put it somewhere safe then real estate is a good place to do it because now you own something physical and tangible that you can see feel and touch and that's creating income now i know real estate prices don't always go up you could see a real estate crash but in general if you own a property in a good area and you own something that people need that something they want and that you can see feel and touch the key for any of this to work though is you got to be consistent and you got to keep investing your money because investing is not a one-time thing it's not like you can just take ten thousand dollars and throw it in the market or go out and buy one investment property and say all right i'm done investing now it doesn't work like that you got to keep investing your money consistently if you want to continue to build your wealth yes if you see a market crash then come and buy as much as you can then because that gives you the opportunity to buy assets for pennies on the dollar but in general you got to keep consistently investing if you want to build this wealth because you had to keep putting more and more money towards your investments now for a lot of people they don't want to be in the game of trying to find the best companies and do the research and find the best time to come in and buy which is why i say do it every time you get paid just create a system anytime you get a paycheck 15 of that should be automatically invested that way it kind of happens without you having to think about it and that way you don't accidentally spend this money there are apps out there that can automate this whole process for you that way anytime you get paid a portion of your paycheck will automatically be invested into whatever funds or stocks that you wanted to go to that way your money is constantly just going out without you even seeing it and that way you're not even tempted to touch your money if you want to learn more about how to actually do that our team wrote an amazing article on our website the minoritymindset.com and i'll link it for you in the description below building wealth is really a game where you got to juggle time and how much money you have to invest because the more time that you have on your side the more your wealth can compound and the bigger your wealth can grow and the more money you have to invest the faster that you can grow your wealth but the tricky thing about this if you look at it practically is most of us make more money when we're 50 or 60 than we do when we're 21. and so you kind of get more of your money towards the end of your career but you have more time in the early part of your career which is why you got to balance it out you got to start investing aggressively early that way you can put more money and have the time on your side that way you can kind of grow your money and have more money working for you and as you start to make more money you continue to keep investing 15 of your income month after month after month that way you can continue to compound that wealth and continue to keep growing your money again don't take what i'm saying as the ceiling i want this to be the floor because right now the average person is investing nothing or very little i want you to kind of up the minimum and make it so you're investing a minimum of 15 percent of what you make once you get the hang of that then i'll put up 20 maybe 25 depending on what you're making the more you can invest the faster you can build that wealth and the faster you can build this wealth the more assets and income that you'll have that way you can live the life you want without worrying about the price because you got your assets producing income which can fund and buy you whatever it is you want if you enjoyed this video here's a video on cryptocurrency that i think you'll love and while you're at it join our free finance and business newsletter and as always keep hustling these buyers are pushing real estate prices up so fast that home prices are growing way faster than wages so you have home prices that are shooting up you have lots of people out of a job and this is being fueled by low interest rates because everyone's trying to take advantage of these cheap mortgage rates

Channel: Minority Mindset

Views: 179,718

Keywords: minoritymindset, minority mindset, minority123, jaspreet singh, rethink rich, financial education, financial literacy, INVESTING, investing 101, investing for beginners, investing in the stock market, investing in real estate, real estate investing, stock market investing, cryptocurrency, bitcoin, crypto, passive income, passive investing, etf, stocks, real estate, wealth, become wealthy, build wealth, how to become wealthy, how to earn passive income

Id: ssTxY5m83VU

Length: 89min 1sec (5341 seconds)

Published: Sun Apr 25 2021