The 5 Steps To Be Good With Money - Money Management MASTERCLASS

if you don't know how to spend your money it doesn't matter how much money you make you are going to continue to be broke i'm trying to say you got to understand that all of us face problems i just wanted to have a sweet ride i drove a toyota and one of the first things i did was i put on custom rims on my car what's up everybody i am just pretty sing from the minoritymindset.com where money minds rethink rich money is one of those things that most people hate talking about yeah it's such an important part of our life because all of us go to work every single day to get paid and all of us are working really hard to save money invest money and build their wealth that's why you need to know the things that you can do to actually become wealthy and be good with your money and in this video i'll put together some of the best clips that way you know what you can do to be good with your money let's get into it the stock market is one of the most accessible wealth building tools that we have but the issue is most of us are never taught about how to use the stock market the right way for a lot of people stock market investing is finding a hot stock throwing your money into it and then watching your money disappear oh not again if you really want to understand the stock market there's five things you need to know first you need to understand what is the stock market in this section i'm going to be going over what's the dow jones nasdaq s p 500 why does the stock market exist and how do stocks work after that we're going to be talking about how you can make money so this is the difference between making money through dividends and appreciation what causes the stock to go up then we're going to talk about different investing strategies you might have heard people talk about fundamental analysis technical analysis i'll be talking about active investing and passive investing in this section then i'm going to be talking about some of the different investment options you have you might have heard people talk about things like growth stocks blue chip stocks reits we're also going to be talking about mutual funds index funds and etfs and then we're going to wrap it up by talking about how do you actually research the stocks and take action so this is looking at things like 10ks 10 qs researching stock charts this is where you actually are making the money because now you're taking action i'm gonna be going over these five things in this video but before i do 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 let's start with this what in the world is the stock market the stock market is a place where you and i regular people can go and invest in companies when you invest in a company you become one of the owners of a company so if you go out and you buy one of the shares of the mcdonald's stock you'll become one of the owners of mcdonald's now if you just buy one stock you're not a major shareholder i mean you only own one 750 millionth of the company but you're still one of the owners of mcdonald's and as an owner you actually get the right to vote on some of mcdonald's business decisions a company that trades on the stock market is known as a public company because this company is publicly traded meaning anybody can go and buy shares of this company on the stock market you can compare that to a private company kind of like ours minority mindset because you can't buy shares of minority mindset on the stock market if you wanted to buy an ownership stake in minority mindset you would have to call me up and i would say sorry we're not selling the reason the stock market exists is it's a way for companies to finance the future growth so if you are a big company and you need more cash to grow then what you can do is you could sell 20 of your company now instead of to private investors to the public market on the stock market by now giving this 20 of ownership to the public on the stock market now you are a publicly traded company and everybody knows how much your company's worth and people have the opportunity to buy shares in your company when you hear people say things like the stock market is up or the stock market is down what they usually mean is an index like the dow jones or the s p 500 or the nasdaq is up or down so these are called indexes because they're essentially baskets or groups of stocks the dow jones is a group of 30 very big companies the s p 500 is a group of 500 of the largest companies on the stock market and the nasdaq is a group of tech companies so they're called indexes because they're groups of stocks and they essentially just give you a sample of what's going on in the broader stock market when you invest in the stock market you can invest into individual companies like mcdonald's i mentioned that just a minute ago or you can invest in an index and get exposure to the broader stock markets but i'll be talking about that in just a little bit second how do you make money in the stock market well in general the goal in the stock market is to invest in a company that becomes more profitable and makes more money that way you make money but the way you make money is one of two ways when you invest in the stock market you can make money through appreciation or dividends appreciation is when you invest in a company and the value of a company goes up so if you invest in a stock and you buy the stock at a hundred dollars a share and two years later the stock goes to 200 a share and you sell it the hundred dollars of profit that you just made is called appreciation other times you can also make money through dividends dividends are literally just cash payments that a company gives you because you invested in a company so if you go out and invest in a company that's trading for a hundred dollars a share sometimes this company is gonna send you a five dollar check every single year just because you own shares of this company you can think of it this way when a company is mature and they have a lot of cash and a lot of profits there's three things that they can do with their extra cash they can save this cash for an emergency they can invest this money back into their business that way they can grow bigger or they can reward you the shareholders the investors by giving you some cash that way now you're happy for investing in this company and this will attract more investors to want to invest in this company most dividends are paid quarterly meaning every three months so if you invest in a company that pays a dividend you're gonna get a check every three months or if you want you can have this cash reinvested into your stock that way now instead of getting a physical check you are getting more stock in the company now dividends sound cool i'm a big fan of dividends but there are a couple drawbacks with dividends that i want you to understand first when a company pays a dividend you have to understand that means the company is not necessarily going to grow as fast because if a company is paying out a billion dollars in dividends then that's a billion dollars the company is not using to actually grow the company to make more profits and make more revenue so if you have a company that's paying out a lot of dividends you're typically not going to see as much appreciation as you would if a company was using this money to spend on dividends to actually grow the company so if a company is paying a dividend they're usually more stable companies and they're bigger companies because they have a lot of cash that they don't really want to invest back into the company so they're rewarding their owners with the dividends second with dividends you have to pay taxes on your profits so this is kind of like your pro and con you have to pay taxes on all of your income but with dividends if you are reinvesting your dividends back into the company you're not getting this cash in your hand but you still have to pay taxes and the profits that you got not every company pays a dividend so if this is something you're interested in you have to look into the actual company and see if they're paying a dividend or not and like i was saying before the companies that pay dividends are typically your larger kind of more mature and established companies because your smaller companies your growth company the tech companies the ones that are really trying to grow fast they're investing every dollar they can back into the company because their goal is to grow as big as possible as fast as possible so companies like that their goal is to grow the stock price as fast as they can the advantage with that if you're investing in a company that's investing heavily in their growth is you don't have to pay taxes on dividends because you're not getting any dividends a company is investing their money back into the company so hopefully you have a big stock price and you don't have to pay any taxes on your appreciation until you actually sell your stock so that's one of the advantages of appreciation but one of the downfalls is it also comes with more risk because there's a chance that the company will fail and if the company fails you don't have anything to show for it because you didn't get any cash through dividends so they both have the pros and cons and as an investor you need to know why you're investing are you investing for this or this the question now you might be wondering is what causes a stock price to go up well on a very broad level and a very simple level stock prices go up based on supply and demand if you have a lot of demand to buy a stock and there's not a huge supply of stock then the price of the stock is going to go up because you're going to have buyers that are fighting each other to buy the stock and this is going to push the stock price up and if you have a lot of supply but no demand because nobody wants to buy the stock then you're going to see the price of the stock fall in the short term the supply and demand is really fueled by emotion like people might think oh my god tesla is the future and everybody gets behind tesla and then you see this huge demand to buy tesla so the price of tesla stock goes up but in the long run what really affects the stocks price is its fundamentals that's how much money is the company making how are their profits looking are their revenues growing are their profits growing how is the management and are they innovating for the future so these are the things that really affect the company's stock price over the long term but in the short term a company stock price can be really volatile based off of people's emotions because the stock market is emotional if you want to invest in stocks it is very simple all you have to do is open up a free account with the stock brokerage and then you can buy or sell whatever stocks you want back in the day it wasn't so easy back in the day if you wanted to invest in the stock market you'd have to call up a stock broker and then the stock broker would then have to make a deal with wall street and then buy or sell whatever stock you want it was a very long and difficult process but now it is very simple if you do want to learn more about how you could find a good stock brokerage to use based off of your financial goals our team has articles on this on our website the minoritymindset.com and i'll also link an article for you up here and in the description below third let's talk about investing strategies because there's more than one way to invest in the stock market and this is one of the biggest mistakes that people make when they invest in the stock market because for a lot of people their strategy is invest in a company that i think is going to be big and then when it goes down sell it for a loss there's a lot of ways to invest in the stock market and you need to have a strategy on how you're going to make money if you want to be a stock market investor then when you buy an investment your goal should be to own your investment for at least a year because if you don't own your investment for at least a year then you're also going to be subject to higher taxes because the way that the tax code works if you own an investment for longer than a year and that's categorized as long-term capital gains and you get lower tax rates but if you buy a stock and sell it for a profit in less than a year then you're going to be subject to higher taxes called your ordinary income taxes because the united states government and the irs doesn't look at that as an investment because now you're just trading you're flipping stocks this isn't to say that you cannot make money trading stocks this is for you to understand what your goal is as an investor because if you don't know what your goal is as an investor you're not going to be able to come up with a strategy on the very highest level there are two different kinds of investment strategies there is an active way investing in the stock market and a passive way an active investment strategy means that you're now actively researching companies and stocks and you're buying based off of that and passive means you're not really doing much research you just have some money automatically being invested for you every week or every month now within this type of active investing there's a whole bunch of different strategies that you can use but they ultimately come down to doing two different types of research you can either do fundamental research some call it fund or technical research or you can also do both depending on what strategy you have but those are the two types of research you can do fundamental or technical as a passive investor you're mainly going to be looking at the fundamental type of research fundamental research means you're looking at the company itself you're looking at how much money a company is making what their profits are who the management is and how they're innovating technical research means you're looking at stock charts you're looking at momentum you're seeing oh this company looks like it's about to go up because of all these indicators and so you buy based off of that warren buffett is a fundamental investor he likes to look at companies he likes to read financial statements and he wants to find a company that's undervalued and he wants to own it for a long time that way he can make a profit over the long term and he is an active investor because he does the research to actually find the companies to invest in and he is the one that's picking these stocks and doing this research and he makes these decisions when he thinks it's a good time to invest you can compare that to a passive fundamental investment where now you can pick a few stocks or a few funds that you want to own and then every single month you have 100 or a thousand dollars or ten thousand dollars whatever you can afford you have this money going into your investments being divided up into your three or five funds whatever you have and this is just passively happening without you actively trying to find new funds it's just every month or every week more money is just being invested into your account technical trading is now when you're looking at stock charts and you're looking at momentum you're looking at different indicators that tell you that you think the stock price is going to go up maybe you're looking at how many people are buying the stocks of the volume maybe you're looking at moving averages to kind of see the trend of which way the stock price is moving so you're looking at different indicators to tell you that you think the stock market is going up at least in the short term if you don't like the idea of putting time into the stock market or if you don't care about studying companies or if you don't care about stock charts then passive investing is probably best for you because this one requires the least amount of work you find a few stocks or funds that you want to invest in and then every week or every month you are just going to continue to put money into that if you like the idea of looking at companies but you don't like the idea of looking at stock charts or looking at these moving averages if you just want to invest in a company like warren buffett does because you want to find an undervalued company and invest in it for the long term then being an active fundamental investor is probably best for you if you don't like the idea of waiting years to potentially see a profit then technical investing is probably better for you now while technical investing can make you the most money in the short term it also comes with the most risk because your goal is to make money in a shorter amount of time a lot of technical investors are buying and selling stocks within a year fundamental investors are usually looking to make money over the long term so now we're talking multiple years and so there's less risk but also less opportunity to make a whole bunch of money very quickly for the vast majority of people who don't care about studying companies or reading financial statements or spending time learning the stock market passive investing is the right way to go now i already made a video where i went over passive investing in good detail so if you want to watch that video i will link it for you in the description below fourth let's talk about the different types of investments on the stock market because one way you can invest in the stock market is by investing in stocks but that's not the only way that you can invest in the stock market you can invest in the stock market and make money in the stock market by investing in individual stocks you can invest in mutual funds you can invest in index funds and you can invest in etfs if you are subscribed to a youtube channel you've probably heard me talk about these things before and if you're not subscribed to our youtube channel you should probably do that stocks are when you're investing in individual companies this is what i've been talking about most of this video so if you invest in the mcdonald's company or lululemon or on tesla or an amazon or an apple now you're investing in individual companies and within the stock segment there are different types of stocks out there like you can invest in blue chip companies these are your more stable more established your larger companies you can invest in growth companies growth companies are your startups your smaller companies these are companies that are investing heavily into their growth so growth companies are not companies that are paying out dividends these are companies that are spending every dollar they have back into their company to grow as big as possible as fast as possible so more risk but the opportunity to see more appreciation you have things like read stocks read stocks stand for real estate investment trusts these are companies that pay out high dividends because these companies make money through rent and the law says that reid stocks are required to pay you 90 percent of their taxable income through dividends so reads give people exposure to real estate and you can make income through dividends without having to go out and physically buy real estate so these are a few ways that you can invest in stocks and again you want to invest in stocks based off your investment strategy your investment goals but this isn't the only way to invest in the stock market because the downfall with investing in stocks is if you invest your money in a stock let's say amazon and amazon starts to fail they start losing money and they go out of business then all of your money goes down the drain now you might be thinking oh amazon's never going to fail but you know companies do fail and if you invest in a company that fails then all of your money is gone that's where these options come in handy mutual funds are indexes so a group of stocks that are managed by a very experienced and usually a very expensive money manager so when you invest in a mutual fund you are paying this money manager to find you a portfolio and investment of stocks and this person is going to manage your stock portfolio and their goal is to help you beat the market and in exchange you're going to pay them a fee index funds work very similar to mutual funds except with index funds you're not paying a money manager to manage your account this is passively managed by a computer so essentially with an index fund you can invest into an index like you can invest into an index that gives you exposure to the top 500 companies on the stock market and now if these top 500 companies go up your index fund goes up if these top 500 companies go down your index goes down the advantage with index funds is you tend to have low fees you tend to have less risk and you can typically match the returns of the stock market the downfall is you typically have less potential upside because you might have some great companies in your fund but they're going to be balanced out by the losers but this can be a good way for you to invest and get low fees and get exposure to the general stock market an etf is an exchange traded fund and this is kind of like a basket statement because all this means is this is a fund that you can buy and sell on a digital stock brokerage so the reason the word etf even exists is because a lot of mutual funds cannot be bought and sold on the stock market if you want to buy a lot of mutual funds you have to call up a broker and purchase shares of a mutual fund manually with an etf it's all electronic so you can buy and sell shares of this etf kind of like you would any other stock now look i am just a random guy on youtube okay so you should always your own due diligence and never blindly listen to a random guy on youtube because investing has risks and you are never guaranteed to make money when you invest but a couple examples of index funds that give you exposure to the general stock market are voo and spy if you invest in one of these two funds you will get exposure to the top 500 companies in the stock market and now you don't have to go out and try to find the best stock to invest in now you're investing in the general stock market i want to kind of give you an idea of what long-term returns in the stock market look like when you play the stock market for the long game so over the long term the stock market typically goes up by somewhere between 7 and 10 a year now this doesn't mean the stock market always goes up and this doesn't mean that it always goes up by seven to ten percent a year this means on average it goes up by seven to ten percent a year some years it'll be more some years it'll be less sticking with the lower end of the equation let's say you invest 10 a day or three hundred dollars a month and you can get a seven percent return on your money and let's say you do this for 45 years so you start doing this when you are 21 years old and you continue to do this until you retire at 66. if we do this and every single month you invest 300 you will retire with 1.1 million dollars from your 10 a day investment the reason i want to show you this because let's say you start a little bit later let's say you start investing not at 21 but now with 31 and you continue to do this until you're 66 so now this is 35 years but you're still doing the same investment you're still doing 10 a day or 300 a month now if you do the same investment you're not going to retire with 1.1 million dollars you're going to retire with 535 000 still a lot of money but you're leaving a lot of money on the table because your money doesn't have as much time to compound time is very important when it comes to investing your money over the long term because every single year your money has more time to grow and compound and the longer you let your money grow the more wealth is going to build you if you want to grow your money even more then there's two things you can do you can either invest more money or invest your money more aggressively meaning get a better rate of return so let's assume now that you're investing 20 a day and you continue to get the 7 return a year if you do this for 45 years so you start when you're 21 and you continue to do this until you're 66 then you're gonna retire with over 2.2 million dollars from your 600 a month investment if you cut 10 years out of the equation because you didn't know about investing until you're 31 so you do this for 35 years now you will only retire with one million dollars now i know only one million dollars one million dollars is still a lot of money but you're leaving a lot of money on the table by not starting sooner this is where a lot of people say things like oh i didn't start investing when i was younger did i miss my shot at becoming wealthy is it too late for me to start investing no it's not remember what i said before if you want to get better returns you either have to invest more money or invest more aggressively maybe you have to invest more money or maybe you have to be a little bit more active with your investments that way you can get a better return so now let's go through this example again where you're investing 20 a day and now you're a little bit more aggressive so you're trying to get a 10 return if you do this for 45 years just to show you the example now you're going to end up with 5.5 million dollars if you start a little bit later at 31 years old and you do this for 35 years now you're going to end up with 2.2 million so you're still a millionaire and if you start this at 41 years old now you only do this for 25 years you're still going to end up with 750 000 in retirement so time and consistency are very important for you to build this wealth over the long term and if you're trying to make up for this lost time then you need to either invest more aggressively or invest more money and if you don't have extra money to invest then you might have to look into doing something like a side hustle or starting your own business that way you have extra cash to invest that way you can build your wealth and this is also more of a passive investing structure right now you're not trying to get amazing returns you're just trying to match the market by passively investing your money into a fund that gives you the same returns as a stock market active returns can get you better returns but again it comes with more risk like if you had invested ten thousand dollars in amazon back in 2010 that 10 000 investment would have grown to 170 000 in 2020 but that again comes into a risk because there's a lot of companies that didn't get the same returns as amazon now when it comes to research and taking action on your investments you have to understand that the investors that make the most money are not the investors that invest on a motion it's the investors that invest on financials a lot of people are investing in the stock market when they feel excited because they think oh my god so many people are making money in this stock so let me buy in and then when the stock starts to come down they panic and they sell if i had to diagram it out for you it looks something like this so you see a stock go up like this then somebody at this point gets excited they get greedy and they say oh everybody's making so much money because the stock has shot up so much so now they're coming and buy at the peak and then people realize that oh this stock might be a little overvalued so they start taking off their profits right here and what do you see happen the stock price starts to come down and now when the stock starts to come down people start to panic sell and now this is where you sell because you panic you get worried you see your stock in the red and so people sell i do not want you to be an emotional investor i want you to be a financial investor which means you need to know how to do the research that way you can find the information you need to actually invest in a company for the long term to make money when a company is publicly traded so it's on the stock market it is required by the sec to release certain information about the company that way people like you investors can make smart decisions one of the things that a company is required to do is every three months or every quarter it is required to have an earnings call where it releases something called a 10-q a 10-q is its quarterly so every three months a quarterly financial statement this statement will tell you how much money a company made how much revenue it made how much profit it made how much money it lost this is how much money it made over the last quarter that it's reporting for but what you need to remember about the 10q is these are unaudited statements so these are statements just released by the company a 10k is an annual statement released by a company so every single year a company is going to have to compile all of their financial data for the last year how much money they made how much money they lost where their money is going and all of that information and they're going to compile it into the 10k the interesting thing about the 10k is this is supposed to be a little bit more accurate because these are financially audited statements you want to be reading the information that's on these documents now if you don't want to actually read these actual financial statements what you can do is go to a stock website like seekingalpha or finance.yahoo.com i'll link these for you in the description you can go to these websites and they're going to break down the information that's in these financial statements so you can go there and see how much revenue a company is making how the revenues have been growing how the profits have been doing and everything else and they will list it out for you that way you can look at the financials of a company when it comes to doing technical analysis that's when you're going to want to be looking at stock charts so you can go to a website like stockcharts.com and then you can look at different indicators for a stock there are tons and tons and tons of different indicators out there and so what you want to do is create a strategy that you follow because one indicator might tell you to sell and another indicator might tell you to buy so you need to make sure that you have your own strategy and look at the indicators for that and follow your investment goals based off of your strategy because if you don't then you're going to go down this rabbit hole of never knowing what to buy and when to sell and it is going to be very overwhelming before we get into the next clip i want to let you know that if you are interested in money management and investing our team put together an amazing guide that you can download for free that walks you through how to manage your money the right way and how to invest your money and how you can build your wealth over the long term so if you want to download this guide and start learning how you can be better with your money and how you can start investing for wealth you can download this guide for free when you subscribe to our daily newsletter and i got the link to how you can download this guide in the description below we live in a society where it is completely normal for people to go out and finance their lifestyle your finance and your car your financing your clothes you're financing your shoes because that's normal and you want to fit in with everybody else and look cool and so now you're spending the rest of your life making everybody else rich and your bank rich while leaving nothing for you you look rich but you're actually just fake rich but you don't think like the majority of people i mean that is why you're here at the minority mindset and in this video i'm gonna be going over seven signs that you are fake rich so you can send this video to your fake rich friend but before we get into that i need you to do me a quick favor and smash the thumbs up button below and a quick word from our sponsor policy genius if you are interested in getting a free life insurance quote you can do it on their website in just a few minutes so if you want to learn more and see how you can get a free quote i got the link to where you can do that in the description below the first sign you're fake rich is you are paying 500 a month for your brand new car but you don't got 500 put aside for your investments the average person with a new car is paying more than 530 a month every single month to drive their brand new car that doesn't include your gas or your insurance or your car maintenance that's 530 a month just to drive your car now this wouldn't be as big of a deal if people were actually putting some money away towards their investments right now you have 41 percent of americans putting away less than 5 of their income towards their retirement or towards their investments and you have almost 7 out of 10 americans putting away less than 10 percent of their income towards their investments yet so many people are paying 530 dollars every single month just to drive the car let's do the math let's say you want to buy this 35 000 car right here and you put a little bit of money down that way you can make your monthly payments to be 530 a month well after five years this 35 000 car is going to be worth 13 000 and hopefully around this time you'll pay off the car but after five years your thirty five thousand dollar car will only be worth thirteen thousand dollars after ten years i'm sure by this time you'll probably get a new car because anytime somebody finishes paying off their car they go out and they start the car payments all over again but after ten years this thirty five thousand dollar car would be worth a whole 6 000 after 20 years your car is going to be worth nothing and after 30 years your car is going to be worth nothing and chances are after you get rid of this car you're going to get another car with another car payment so you're going to have car payments for the next 30 years because you just keep flipping cars you finish paying off one car you go get another car and then another car and another car but after a while what you realize is your cars are not worth anything but now let's get a little bit crazy let's assume that now instead of you paying 530 every single month to your car company or to your bank make it damage let's assume that you take this 530 every single month and you pay yourself so this is money that you're taking and you're gonna invest it every single month and let's assume that you can get an average seven percent return a year so we're talking below average returns and this assumes that now you're going to go and you're going to buy a used car because you still need a car that you can drive so you go out and you buy a used car with cash and now instead of taking us 530 a month and paying it to your car company you're paying it to yourself by putting it directly towards your investments if you can get a seven percent annual return on your money after five years this 530 monthly investment will now grow to 39 000 after 10 years is going to grow to 95 000 after 20 years it's going to grow to 280 thousand 000 and after 30 years your 530 monthly investment will grow to a whopping 650 000 just take a look at the map which one would you rather have here you got a nice car which makes it look rich for 30 years but here you're actually rich if you're putting 500 every month towards your car but you don't have 500 to put towards your investments something's wrong your priorities are in the wrong place and you are fake rich it looks nice you have a car that makes everybody go but you have no money you have no wealth to show for it your car is a liability it loses you money it doesn't put any money in your pockets and so before you start spending money on liabilities you got to have some money in assets which are things that are going to pay you for owning them ideally you want your assets to pay for your liabilities if you have these assets that are paying you every month with your rental income or every quarter with dividend income now you have this passive income coming in and you can use your asset income to pay for your liability costs if you do that now you're financially free because now you have your assets paying for your lifestyle but if you're spending all of your money paying for liabilities like a car but you have no money going towards your assets you my friend are fake rich when it comes to your car you want to make sure that you're driving your car you don't want your car to drive you the second sign you're fake rich is when you have to keep telling everybody how rich you are we all know somebody like this somebody that's constantly looking for validation by always telling you how rich they are yeah so i just bought myself a new gucci scarf gucci belt also dang monty nice i just went shopping on amazon basics these are the people that spend all their energy and time trying to look successful instead of actually trying to become successful they also have this name to constantly name drop famous people or celebrities that they say they know even though they might have only just been in a room with them one time these are also the same people they need to take pictures of how much money they're making so they can post it on instagram or they're taking pictures of their dad's bank account and saying it's theirs so they can put it on snapchat or they're posting pictures of them holding a stack of cash on instagram if you want to know a little secret wealthy people don't need to show off they don't need to boast about how successful they are or how much money they're making because they're confident they know they're successful they know they're making money they know they have assets and they don't need to tell the world about it because they know that they're doing it people who are actually wealthy and rich are actually trying to stay under the radar and they don't want people to know how much money they have because then everyone's asking them for money but when you're fake rich you're trying to tell everybody how rich you are so people think you're rich the third sign of fake rich is you're following the yolo lifestyle the you only live once lifestyle life is short none of us know how much time we have so you want to enjoy the time that you do have right so you want to go on vacations you want to go out to eat you want to party with your friends and you want to enjoy a life but if you're spending all your money on enjoying your life but you have no money left over to take care of your family after you're gone or to take care of the cost after you're gone then yeah you're fake rich look you only live once yolo but if you're spending all of your money on yellowing and you're not keeping any money to take care of your family's costs or to take care of your cause after you die you know because funerals are expensive then your yellow is backwards if something tragic were to happen who's going to take care of your spouse and your kids and your debts and your funeral costs and so you want to start thinking about this before you start yoloing all your money away the simplest thing that you can do to protect your family financially is to get life insurance because now if something were to tragic happen and you die now your insurance company would come in and they would give your family a big check that way at least your family is okay financially and life insurance doesn't have to cost that much either like if you're a healthy 30 year old guy you can buy a million dollar life insurance policy for less than a dollar a day so if you want to learn more and see if you get a free quote i got a link to our sponsor in the description below and i'll also put a link to an article that team wrote breaking down how life insurance works if you want to read that i'll got the link in the description below the fourth sign of fake which is if you have the new iphone or the new macbook or airpods or a smartwatch and you're trying to play the lottery to get rich if you're subscribed to her youtube channel you heard me talk about the time where i went in the gas station to get some gum and there was a lady at the cashier that i was checking out and she had air pods in her ears the brand new ones she had the brand new iphone the one with all the cameras and she had this bedazzled mask on her face and she was trying to buy hundreds of dollars worth of lottery tickets on her credit card and when her credit card got denied because she didn't have enough money to pay for the lottery tickets she started throwing this huge fit i know you can't do this everywhere but in my estate you can buy laundry tickets on your credit card and it's kind of funny because when you go to gas stations they'll have advertisements talking about how you can go and buy lottery tickets on your credit card really strange situation but that's what you can do and so now if you're trying to get rich by spending your money on lottery tickets but you're also at the same time blowing your money and all these things that don't make you any money something's wrong if you ask the majority of people what is your biggest financial issue all of them will tell you is an income issue that they don't make enough money but that's only one side of the coin sure maybe if you made more money that would help but there's also a spending issue here because so many people are spending all their money on things they don't need and then they wonder where all their money went it's like trying to talk to the government about money the government knows how to spend money but they don't know how to manage the money they have which is why they always need more money earning more money can help you become wealthy but it can only do that once you know how to spend your money the right way if you don't know how to spend your money it doesn't matter how much money you make you are gonna continue to be broke spending all their money on these fancy accessories is gonna make you look rich today and it's completely normal because everybody does it but that's what's holding you back from becoming wealthy it's not the fact that you're losing the lottery is the fact that all your money is going to places that's not making you any money the fifth sign of fake rich is if you cannot tell the difference between being able to afford something and just being able to make the payments i'm an investor and i'm an entrepreneur and i love finance but one of the things that's really concerning me about fintech which is the financial technology space which is something that i love is the real growth of these buy now pay later apps because these new technologies are getting so much funding and they're gaining so much traction because people love using these buy now pay later systems like after pay and a firm the way it works is you go shopping online and you find yourself on your wardrobe or some furniture that you want to buy you go to the checkout page you enter in your credit card information and then there it is right there is a little button that says would you like to pay for this item later or in installments you just check the box and boom now you don't have to have 500 leaving your account right now you can pay this off in four easy installments with just a little bit of interest now you got the nice clothes and the fancy furniture which help you look rich but you also got payments for the rest of your life you know what while we're on this let's take a look at some more numbers let's assume now that you're investing just 123 a month and let's assume for the sake of this example that you can get an 18 annual return on your money after 10 years of investing 123 a month which isn't a ton of money your 123 monthly investment will grow to right around 40 000 in 20 years it will grow to right around 260 000 and in 30 years your small investment will grow to right around 1.4 million dollars now i know what you're thinking just bleed where in the world am i gonna get a consistent 18 return on my money good question one way that you can get a consistent 18 return on your money is by starting a credit card company or one of these buy now pay later companies because now if somebody doesn't pay their stuff on time they're going to be paying you 18 to 25 interest on everything that they don't pay back on time these buy now pay later programs or as we like to call them broke down broke later programs lure you in with the idea that you don't have to pay any interest or if you do it's a very small amount and so now you can just pay this thing off in installments but what they don't tell you is if you don't pay it off in time you are going to be skinned alive with a crazy interest rate and so what happens you go shopping and you spend a few hundred dollars online and you don't have to actually spend any money today because you can buy now and pay later and you're like wow i still have a lot of money in my bank account so now you go shopping even more and you buy more furniture and then you buy more clothes and you never actually spend any money today because you can just buy now and pay later and now three months go by and it comes time for you to make all these payments and you realize oh it looks like i spent a little bit too much money it's okay though i'll just keep paying it off in installments over time and now you're taking on a whole bunch of interest it might not seem like that big of a deal because it's just a small monthly payment but if you look at the interest and you look at how fast your money would grow if you were the one getting the interest then you can really start to see the cost of paying all this interest because this is money that you're paying to your bank or to these companies so they get rich well you're the one paying the price you get to look rich though because now you get to have nicer clothes and you can have more furniture you can have more stuff because you can buy more things today but you're actually just fake rich because well you don't got the money to afford it all you could do is just make the payments the sixth sign you're fake rich is you care more about what other people think than what you're getting i'll admit to this when i was in high school and early college i bought myself some fake watches and even some fake shoes just because they looked cool and they had the logo on it but they weren't the real thing i used to really be into shoes so i bought some fake jordans and i got myself some fake watches i don't even know what brands they were it wasn't like a rolex or a bright link it was just some random fake watches that looked really cool when you're buying this type of fake stuff you're doing it just so other people think you're rich not because you're actually rich and so you want to just put off this perception and you're putting out money so people think that you have certain things that you don't actually have fake rich people are all about putting out a statement it doesn't matter what the statement is the statement could be a complete lie but fake which people just want to put out the statement so people look at them real rich people want a real thing they want the value they want the luxury they want the actual thing and they're the ones that are actually going to pay the price because they can afford to and the seventh sign you're fake rich is you're all talk but no go these are the people that every six months they have a brand new million dollar idea that is guaranteed to succeed and every so often they're calling you asking you to invest in them or put some money in them because they have this amazing idea that's gonna make so much money and if you don't get behind them you're gonna look like a loser being fake rich is all about perception it's all about the way people think about you and the way people look at you or at least the way you think that people look at you because if you keep telling everybody that you're working on this million dollar idea and if you keep telling everybody you're doing these big business deals and you keep telling everybody that you're buying these fancy clothes then people have to think that you're rich right and so this what you're doing is you're trying to give people this perception of you of you being rich which is actually just you being fake rich when you're trying to become real rich or wealthy you don't got time to care about what people think about you you're working to actually build whatever it is you're doing and you're working hard to grow your wealth when you're fake rich it's all about face level that's what people think and what people see that's not actually what you do [Music] if you don't want to be poor financially you got to ask yourself why do you want to have more money what is the driving force inside of you that wants to have more money what's interesting is how your answer changes over time like when you're young chances are you want to have money that way you can have a nice car you can show off on instagram that way you can have all the nice things but as you get older those nice things start to have less value and the freedom that money provides you starts to have more value that way you can just enjoy life have money to spend time with your family and just be able to be free a simple kind of exercise that you can do with yourself to understand the importance of having money is just asking yourself what does not having money do what does not having money bring because when you don't have money that comes with stress now you got to worry about how you're going to pay your bills that comes with financial pain because now you can't get your spouse what they want you can't send your kids off to college without a whole bunch of debt and you can't go on those nice vacations with their family so if you don't want to not have money you gotta avoid the five habits that are keeping you poor in the first place that's the five things that i'm going to be going over in this video but before i do that i need you to do me a quick favor and smash that thumbs up button below the first habit that keeps so many people poor is having a poor mindset you might have heard people talk about the difference between being poor and being broke where being broke is a financial thing you just don't have any money right now but being poor is deeper being poor is where you have a broke mindset when you have a poor mindset it doesn't matter what you do out here doesn't matter how much money you make it doesn't matter if you achieve wealth on paper you are not able to live your life because you're still poor up here so if you want to become wealthy the first thing you got to do is break out of this poor mindset and one thing that you got to do to do that is you need to stop finding the problems with everything you need to start finding the opportunities you know i don't consider myself the smartest person or the most talented person but one quality that i think i do have is the ability for me to find the opportunity when i see a problem i mean that's the whole reason why minority mindset started in the first place i was working on a stock business and i got scammed by a fake marketing company and i lost a lot of money and then i had to make a decision okay what do i do about this do i just complain about it and cry about it or do i do something about it and so i decided to come on to social media and create this instagram page called minority mindset where i help people launch a business without getting screwed over and i created this class on udemy which is no longer there on how to launch a business without getting screwed over that eventually grew our instagram page grew and then we grew to like 17 000 followers on instagram when i had the idea okay maybe i should start a youtube channel so now i start a youtube channel and interestingly as soon as we hit like 17 400 followers on instagram our instagram page got hacked and it was deleted now i had almost no subscribers on youtube i had no instagram page no following left a minority mindset i could have ended the thing right there but i was like you know what this is an opportunity for me to now work even harder on youtube so now i dove even deeper onto youtube and now we have a youtube channel with close to 900 000 youtube subscribers and we're building a whole financial media company all because of a problem that i faced now i'm not trying to say look at me look at what i did that's not what i'm trying to say i'm trying to say you got to understand that all of us face problems i talked about my worst real estate deal ever on youtube that way you can see the problems that i faced in real estate now i've been able to do much bigger deals because that problem showed me the opportunity and how to do real estate the right way i even talked about when i got sued in real estate that was a problem and then i learned how to protect myself legally and i learned how to be a better real estate investor we are all going to face problems that's a part of life now we cannot change what this problem is but we can change how we react to it and the way you react to it is going to determine how you live your life are you gonna live a wealthy life whether we're talking about financially or just happily or are you gonna live a poor life look this is reality we cannot change what happens out here but we can change how we react and so if we just beat yourself up and you just blame everybody else for every problem that you have going on in your life you are not going to improve anything okay so now just ask yourself when something goes wrong what can you do you can complain about it you can point fingers or you can do something about it these are typically the only three options that you have and i want you to look at what can you do about it to better yourself because complaining about things and blaming others doesn't get you anywhere but doing something about it can find you more opportunities to help you live a better life the second habit that is keeping so many people poor is you are getting too comfortable with debt i was at the mall a few years ago this image just like burned into my brain and i was at the checkout counter and in front of me were these two girls who are buying some clothes and they go up to the cashier and they check out and the cashier says can i interest you in a brand new store of credit card if you get approved and you open it today i can save you 15 off your order the girl said yes that would be great and then he goes away to go see if they can get approved and the girls literally started praying in front of me saying please god help us get approved for this credit card the guy comes back and he says good news you've been approved and you can save 15 off your order today and the girls started jumping up and down because they just saved 15 on their order because of this brand new credit card no credit cards can be a great tool like i only shop with my credit card but when you're getting a credit card just so you can save 15 off your order chances are you're not using a credit card for the right reasons chances are if you're one of those people you're gonna be going into credit card debt because a credit card to you is just a free money printing machine and now you can buy whatever you want and pay it later and you know what this is the society that we live in and it's only going to get harder there are more and more companies coming out to help this whole idea of you being able to buy something now and pay later which means you get to be broke now and broke later you've probably seen it if you shop online when you go to the checkout page there's a little button that says would you like to pay for this order in installments what does that mean now you don't got to pay all this money today you just pay it off in six months and add a little bit of interest on top of it back in the day you'd hear people talking about getting big mortgages and then financing the car and then maybe using a home equity line of credit to buy a boat nowadays it's a little bit different because people are not just financing your home your car and your boat but your financing your clothes your furniture your electronics your cell phone your laptop and everything in between and let's not get started with student loans i graduated with kids who had six figures more than a hundred thousand dollars with the student loans graduated school making 14 an hour this habit is going to be hard to break away from because our society is going deeper and deeper and deeper into debt where it's just completely normal to be drowned and in debt that's just what everybody does and so now if you want to go on a nice vacation you don't got to wait until you can actually afford it you just put it on your credit card or you just finance it or pay it off in installments because that's what everyone else is doing you want to go on a nice vacation go ahead pay for it later now you're spending the rest of your life paying off that trip to cancun plus interest but at least you got to eat some guacamole the third habit keeping you poor is sticking around in a toxic environment the internet is great because it has opened the doors to opportunity and education to everybody in the world who has access to the internet but the downfall with the internet is if you get sucked into this negative or toxic environment you get sucked into this deep rabbit hole where it gets really hard to get out because now you're surrounded by people not just in your real life but also in this digital life of everybody who just keeps talking about gambling and blowing their money and spending their money and all these things that are not helping you achieve wealth they're just keeping you poor we all want to have a sense of community and i'll talk about our physical real life communities in just a minute but we all want to have this community in our digital life too and so people get drawn into these digital communities whether it's in investing or sports betting and the communities that get the most traction that are the most hot are typically the ones that involve the most risk you have a lot of people jumping into the stock market which is great but you have a lot of new people entering the stock market to trade these high margin option trades even though many of these people have never traded a stock or invested their money a day in their life it's the same with sports betting we have this whole new industry of sports betting with companies like fanduel and draftkings that kind of create this community around people betting their money on sports when you gamble it doesn't matter what the odds are at the end of the day the house always wins if the people all around you either were talking digitally or physically in your real life are all broke all drowning in debt and are all making bad financial decisions what do you think you're gonna do because when you're in that community when you're in that toxic environment these things are normal it is normal for you to be paycheck to paycheck and it's abnormal for you to save money and invest money and so now when you're in the toxic environment it is just normal to continue being broke and continue complaining about life but if you can transplant yourself from this environment to a different environment where people are talking about investing and living smartly especially when it comes to finances now if you're talking about gambling and living paycheck to paycheck you're not going to fit in this community because this environment doesn't want people like that that's why your surroundings and your environment plays such a big part in how you live your life and if you want to go from this toxic environment to this growth environment the first thing you got to do is you got to start learning because if you just start going into these other people they're not going to know who you are they're not going to want to talk to you so the first thing you got to do is start learning start reading books change this environment you're in in the digital world start watching good youtube videos where you're actually learning things you know minority mindset start learning things that will help produce a more growth mindset and a wealth building mindset because now you're going to start thinking differently you know i think we all kind of have to go through this transition phase and kind of change who we're around because the people who were around when we're younger might not be the people that's best for us as we start to grow because when i was younger when i was in college a lot of my friends were all about blowing their money having all these nice things having this kind of real exotic looking life and as i started to realize this now for me that's when i had to start taking a step back and distancing myself and i did that especially after i started reading these books talking about this other life that i have never experienced and that's when i started looking i kind of started this new journey and new people started coming in my life naturally plus the easiest thing that you can do is change what digital environment that you're in what are you absorbing on the internet because as you do that you're going to find new digital communities that will help you grow the fourth habit keeping you poor is your priorities are all in the wrong place because what happens to a lot of people is they prioritize making money but you don't understand how money really plays a part in your life because yeah money is important but at what cost because you know what there's other assets in our life that are more important than money like time you can always make more money there's no limit to how much money you can have but there's a limit to how much time that we have and so now one of the things that you got to do if you want to stop being poor is you got to start valuing your time more because your time is your most valuable asset if you do not treat your time wisely it doesn't matter what you're doing with your money there's a couple ways that i want you to look at this the first is really just a straight financial perspective if you can make twenty dollars an hour from working at your job or wherever you're working and you are spending a lot of your time doing things that are not making you at least twenty dollars an hour in value like you're mowing the lawn which you don't like doing and you can pay somebody else to do that for ten dollars an hour now you are losing out on the opportunity to make an extra ten dollars an hour because you can just pay somebody ten dollars an hour and work an hour and make twenty dollars so the first thing you gotta do is start putting the price on your time because if you're spending all your time doing things that are not producing any value for you while they're talking about cutting the grass where you can hire somebody to do it at a cheaper cost than you could do it or we're talking about playing video games all day well now you got to put a price on your time and see how much money you're throwing away by not using your time the second part of this coin is you got to know how to use your time in the most efficient way possible because there's only 24 hours in a day and you cannot work 24 hours so you got to understand how can you extract the most value out of your time that way you can attract the most money this is where you got to understand the difference between active money and passive money because active money is where you're physically working to earn money this might be you going to your job there's a limit to how many hours you can work because you got to sleep you got to go to the bathroom you got to spend time with your family so there's a limit to how much active money that you can earn but there's no limit to how much passive money that you can earn because when you talk about passive money this isn't money that you're physically working to earn this is money that you're attracting thanks to your money so when you earn this active money you want to take some of this money and send it off to attract you this passive money that way now you have more money coming in and you're using your time the best way possible because you're using the time to attract this active money but you're also getting this passive money without having to physically invest more of your time but in order for you to attract this passive money you got to understand the number five thing that's keeping so many people poor you're not paying yourself interesting right we're talking about the habits that keep people poor and only now are we talking about how you pay yourself when the majority of people make money they get paid then you got to pay your taxes because the irs wants to cut and now with the money that you have left you're going to pay your rent or your mortgage you're going to pay your car payment you're going to pay your student loans you're going to pay for your utilities you're going to pay for your phone bill you're going to pay for your laptop you're going to pay for your furniture financing plan you're going to pay to go out with your friends you're going to pay for this vacation that you went on last year and then if there's any money left you're going to save it but that's why we don't think like the majority people i mean that is why we're the minority mindset because if you want to not be poor you got to know how to use your money the right way and that includes paying yourself before you pay everybody else around you and before you make everybody else rich when you pay a housing payment do you want to know who's getting rich it's not you it's your bank or your landlord when you pay a car payment do you want to know who's getting rich it's not you it's your car company or your bank when you pay your phone payment do you want to know who's getting rich it's not you it's your phone company when they go out to eat do you want to know who's getting rich it's not you it's the restaurant before you go out and you make everybody else rich i need you to start using your money to make yourself rich first and that means paying yourself before you pay everybody else now when i say pay yourself first i'm not saying reward yourself i'm not saying go over to the mall go to the gucci store and buy yourself a brand new scarf because the person that's getting rich when you buy that brand new scarf is not you it's the gucci store i mean pay yourself that way you are getting rich first so when i say pay yourself the first thing you got to ask yourself is who's getting rich when i pay myself the answer is supposed to be you the way you do that now is every time you get paid i want you to take a little bit of money and put some aside for your savings that way you have cash in case an emergency happens that we never have to worry about going into debt again and then i want you to take some cash and put it towards your investments because now you want to buy some assets some investments that are going to pay you for owning them an asset will be something like investing your money in the stock market or investing in real estate investment properties or investing in a business now when you're investing your money in these assets you're doing it for the purpose of making money because now when you own these assets you are the one that's getting paid you can compare that to something like a liability which is where now you're going to the mall you're buying yourself a brand new wardrobe or when you buy yourself a nice car or where you go on a nice vacation these things are nice and they make you look rich but they keep you poor because now when you buy these things you are giving the money to somebody else and you have no money coming back with an asset you're giving your money to this thing that way you own this asset that way now you can keep having more money come back to you this is the financial part of becoming wealthy because if you do not do this i don't care how much money you make i don't care if you make a million dollars a year you're gonna continue to be poor because when you're paying everybody else before you pay yourself even if you make a million dollars a year you might have really nice stuff you might live in a big house you might drive a fancy car you might wear expensive clothes you might go on exotic vacations but you have nothing left for yourself because if their income went away if your money went away what are you left with nothing you have a whole bunch of liabilities that you cannot get your money back from because when you own a liability you buy yourself a brand new car guess what if you go to sell that car three years later you're gonna get pennies for what you paid for it wealthy people get rich and stay rich by living below their means and always no matter how much money they make always putting money aside to pay themselves first because if you want to become wealthy and if you do not want to be poor you have to you have to prioritize your wealth before you prioritize everybody else's wealth so before you pay apple before you pay lulu lemon before you pay chipotle for the extra walk before you pay gucci you got to put that money in your wallet you got to put that money in your assets that way you can build your wealth before you make everybody else rich [Music] have you ever looked at your friends spending decisions and wondered wow what a dumb way to use your money are you kidding me i judge my friends all the time well how many times do you think your friends are secretly judging you did bunty really just spend 500 on the new playstation he's 20 thousand dollars in credit card debt some bad financial decisions are more obvious than others that's why in this video i'm gonna be going over five dumb ways that people use their money some of them from personal experience that way you do not waste your money doing these five things so make sure you watch this video until the end because you don't want to miss any of these five things but before we get into that i need you to do me a quick favor and smack the thumbs up button below because the way the youtube algorithm works if you do not smash the thumbs up button then youtube is much less likely to show you and other people are financial news and education videos first you get so used to the spending that you don't know what it would be like to not spend your money has this ever happened to you you go to the mall to buy a pair of jeans and you think it's going to cost you 100 and you go and buy the jeans and that's when you find out the jeans are on sale for 50 so you got to save 50 now you have this extra 50 in your hand and you tell yourself hmm i'm going to take this extra 50 and i'm going to put it in my bank and save it or i'm going to take this extra 50 and i'm going to invest it yeah well lots of people say that but not many people actually do that people in america don't like the idea of taking extra cash that they thought they were going to spend and then saving the money or investing the money instead they like to take this extra cash that they thought they were going to spend and they spend it what do you have on sale for fifty dollars oh that's 75 i'll take it studies show that when gas prices fall from four dollars a gallon down to two dollars a gallon or below two dollars a gallon people could save 10 20 30 40 a week depending on how much you drive but what actually ends up happening is people create this imaginary budget in their mind where they think oh i have to spend 50 a week on my gas so when gas prices come down people actually end up spending more money on gas because they start using premium gas because you have this imaginary budget that says you need to spend more money on gas so gas prices come down and you make up for this discount by pumping more expensive gas ah i have no use for an extra 20 a week anyways credit card debt in america is breaking a record high and almost half of americans have credit card debt and the average american who has credit card debt has over six thousand dollars with the credit card debt so that 10 20 30 40 you could have saved every single week could have saved you a ton of money and interest on your credit card payments when you create this imaginary budget in your mind where you tell yourself you need to spend 50 a week on gas it's very hard for people to only spend 25 so you need to break out of that system start saving that cash and using it to build your wealth second don't confuse your liabilities and assets an asset is something that makes you rich and liability is something that keeps you broke so assets are things like investments stock investments real estate investments things that you buy for the purpose of making money i talk a lot about this on our youtube channel so if you haven't subscribed yet make sure you do that and liabilities are things that keep taking money away from your pockets when i was in high school i was making pretty good money for a high school kid i mean i was working at auntie anne's pretzels so i was making pretzels and working the cashier that was like my regular hourly job i also worked at weddings on weekends and i was kind of starting up my own event planning business so i was making some decent money as a high school kid it wasn't a whole lot of money but for a high school kid it was pretty good and when i made this money i would invest my money into my car anytime i had some extra cash i parked this money in my car because i just wanted to have a sweet ride i drove a toyota and one of the first things i did was i put on custom rims on my car then i put on tints on my car and then i got the sound system put in my car but i didn't pay the 99 to upgrade it that way i could have bluetooth in the sound system because i didn't know what bluetooth was at the time then i put subwoofers on my car and then the first time i had four thousand dollars in my bank account i was gonna go out and put lamborghini doors those butterfly doors on my car the ones that go up but my cousin was like just you're an idiot don't do that i used to watch a lot of pimp my ride when i was a kid and i was all about customizing cars and thankfully i was not driving around in a toyota with butterfly doors i spent probably thousands of dollars on my car thinking i was investing this money but i was actually investing this money into a live ability so it's not really investing but all that money went nowhere because the car became worthless but if i had actually invested that money into an asset something that makes me money well then i would have turned my couple thousand dollars that i invested into my car into something a whole lot more because every dollar you spend on something that is a liability could be worth two dollars if not a whole lot more in the future so if i spent two thousand dollars upgrading my car yeah i spent two thousand dollars but i also lost out on the opportunity to make four thousand dollars the reason i say that every one dollar you spend on a liability today is two dollars you could have in the future is because if you invest one dollar today and you get an average rate of return that one dollar will be worth two dollars in a decade third you save all your money this one goes against pretty much every indian person's teachings because every indian person teaches the kid that you need to make a dollar that way you can save 80 cents and spend 20 cents because the indian mentality is to save save save save save and spend as little money as possible i'm speaking from personal experience here growing up spending unnecessary money was almost as bad as doing drugs so you can imagine how people felt when they saw me spend money on my car you said the video game is fifty dollars yeah i'll take that uh what do you think you're doing oh uh nothing i i was just doing some drugs okay i thought you were wasting money wait what i don't do drugs i don't drink i don't believe in doing any of that and maybe that was a little bit of a stretch but in an indian house you were kind of raised with the saving mentality now look saving money is better than blowing all their money on video games and clothes and cars but saving money isn't using your money to its full potential everybody needs to have savings okay you need to have an emergency savings fund if you do not have any money saved for emergencies then the very first thing you need to do is save money as fast as possible that way you can save some money for emergencies once you have some money saved for emergencies once you got six months worth of expenses saved now it's time for you to really use your money if you save an extra ten thousand dollars when you're 20 years old and that money does nothing except just sit in your bank you are losing out on the opportunity of having two hundred thousand dollars when it comes time for you to retire because you could invest at ten thousand dollars instead time is so important when it comes to investing because if you take that ten thousand dollars and you invest it when you're 20 by the time you're 65 that ten thousand dollars can grow to over two hundred thousand dollars but if you start when you're thirty and you take the same ten thousand dollars and you invest it now that ten thousand dollars is only going to grow to a hundred thousand dollars you need time on your side that way you can grow your money and build your wealth but that will never happen if you are saving all of your money the longer you invest your money the more aggressively you invest and the more money you invest the more wealthy you will become which is why you need to have savings but you need to also be investing your money save enough money to protect your finances that we never have to worry about going into debt when an emergency happens once you do that you need to start investing aggressively that way you can really build your wealth i made a youtube video where i talked about how you can invest a thousand dollars and start generating passive income if you haven't seen the video yet i will link it for you in the description below fourth you don't value your time when you're in college a dollar is very valuable and one thing that i thought was very interesting was how much people were willing to sacrifice to save a dollar or i guess in this case three dollars on my college campus there was a ben and jerry's ice cream parlor and every single year they would do this promotion where they would let you get a free cone of ice cream i think it costed like 2.99 if you bought it but if you come on the specific day they will give you a free 2.99 ice cream i think that price is a little bit deceiving though because if you go and get that free scoop of ice cream they don't give you a whole scoop they only give you half but people will get so excited behind the idea of getting a free cone of ice cream that they would stand in line for three hours that way they could get a free cone of ice cream when you're only getting a dollar fifty cents worth of ice cream now look i'm an entrepreneur and from a business standpoint that is amazing marketing because ben and jerry's get so much buzz and so much pr giving people free ice cream cones but let's look at this from a financial standpoint you are trying to get a three dollar ice cream cone i rounded it up for free and you're waiting in line for three hours so if we do the math three dollars for three hours that means you are valuing your time at three divided by three one dollar an hour now i know you're just a college kid but still i think your time is worth a little bit more than one dollar an hour but this doesn't just happen when we're in college this happens all around us how many times have you seen your friends spend hours and hours and hours trying to find a coupon so they can save twenty dollars or how many times have you spent months trying to figure out how you can save an extra 500 on your car saving your money is great you should always try to negotiate and get the best price possible but you also have to value your time if you can make twenty dollars an hour at your job is it really worth 30 minutes worth of your time to save five dollars sometimes it's better for us to pay a little bit more and spend our time earning more money that way we can grow the pot and have more money and then worry a little bit less about the price fifth you let sales people make financial decisions for you i used to be a real estate sales person and i was the best worst sales person there was i don't mean to brag but i'm pretty good at real estate and i'm pretty good at selling but i hated the idea of selling something to someone that they couldn't afford i'm a financial person and i'm always thinking of affordability which is why the sales process for me was kind of really hard even though i love selling sales is a lot of fun you get to learn about persuasion and you get to learn about people and you get to help people make buying decisions but sales people are not in the business of looking out for your financial health a sales person's job is to make money not for you but for the company that they work for when a salesperson tells you that you're getting a great deal what that means is it's a great deal for their commission check it's the same with your bank when you go to the bank and you ask them how big of a loan can you get or how big of a house can you afford their job is not to look out for your financial health their job is to make money not for you but for the bank you need to be a salesperson for your wallet your job is to keep more money in your pocket because your job is to make yourself the most money now this doesn't mean that all sales people are evil or that they're bad this is the business that they're in and so you need to understand how to protect your finances that way you can build your wealth first before we get into the next clip i want to let you know that if you are interested in money management and investing our team put together an amazing guide that you can download for free that walks you through how to manage your money the right way and how to invest your money and how you can build your wealth over the long term so if you want to download this guide and start learning how you can be better with your money and how you can start investing for wealth you can download this guide for free when you subscribe to our daily newsletter and i got the link to how you can download this guide in the description below [Music] when you spend money most of the time you are a consumer like if you go out to mcdonald's and you buy a burger and you buy some fries and you eat it you are consuming their products when you invest your money you become a producer now instead of you being the person that's buying the burgers you're the one that's selling the burgers speaking of mcdonald's one way to do that is by actually investing in buying one of the mcdonald's franchises now you own a mcdonald's store so people are buying mcdonald's sandwiches from you you're the one making money the other way you can do that is by investing in the mcdonald's corporation the actual stock if you go on to the stock market and you buy one share of mcdonald's you'll become one of the owners of mcdonald's now if you just own one share of mcdonald's you're not going to get to tell them what to do and how to run their business but you do get to share in the profits when mcdonald's makes money now the difference between being a real investor and being a flipper or a trader is how long you plan on owning your investment for like if you stick with mcdonald's if you plan on just buying and selling their stock in three months to make a quick profit you're not an investor you're a trader if you plan on owning this investment for longer than a year now you're classified as an investor so if we draw this out when you invest your money you're using your money to be a producer not just a consumer remember when you're a consumer you're just eating the product or using the products when you're the producer you're the one that's making money off of the product so you're investing in being a producer and when you invest your money you have a time span of having your money invested for at least one year what i want to talk about in this video is not just your regular investments i want to talk about the investments you should be holding for your entire life because they're a little bit different than what you might think i'm going to be going over five different investment types in this video so make sure you watch this video until the end 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 the first is real estate for residential purposes for reasons that you might not expect now when i say real estate for residential purposes i'm in real estate where people live in so this can be homes or apartments i'm not calling it residential real estate because when people say residential real estate that typically means we're talking about single-family homes or small multi-family units up to four different units when i say real estate for residential purposes this can mean single-family homes or this could mean big apartment complexes where people live in the way real estate investing works is like this let's say you find this house right here on sale for 100 000 and you go through the property and you think it's a good property in a good area so then you come in so i'm gonna draw you right here and i'm gonna draw you with a nice mustache of course you come in and you buy this property for a hundred thousand dollars now you own this home right here but you're not gonna live in this home yourself instead what you do is you are going to lease this home out to this person right here and maybe their family and they're going to live in your property but in exchange of this person living in your property they're going to pay you 1 000 a month in rent every single month for them living in your property now you can continue working your job like normal or you can go on vacation or do whatever you got to do and you will continue making this 1 000 a month every single month because this person needs a place to live and where they're living they're living in your home the reason i say you want to own real estate for residential purposes for life is because people will always need a place to stay no matter what happens in technology and no matter what happens in the future people will always need a home you can compare that to the past where people used to look at shopping malls and strip plazas as the thing to own in real estate well as technology came and amazon came and the shopping dynamic of the world changed then shopping malls didn't become as attractive there were people who made a ton of money in the strip mall and the shopping mall business but now that industry is kind of dying because the whole shopping industry is changing same with office real estate real estate investors back in the day used to say that companies will always need a place to work but then came the 2020 pandemic and then people realized that they can work from home which made office real estate not so attractive residential real estate is a little bit different because people will always need a roof over the heads people will always need a bed to sleep on and people will always need a home to stay in that makes it a lot easier for you to own real estate for the rest of your life because the only reason people won't want a home to live in is if people decide that they're more comfortable living on the streets now let's talk about why or why you don't want to own real estate for the rest of your life so for the sake of this example let's say over here you have a single family home and here you have an apartment complex both of which you can buy for one million dollars and let's assume for the sake of this example that if you rented out both of these properties after paying all of your expenses you would be left with 70 000 at the end of a year so you buy each one of these and each one of these make you let's just say 200 000 a year in rental income and then you pay for all your expenses your property tax the insurance your maintenance your management fees after paying all of your expenses you are left with 70 000 worth of profit and we're assuming that there's no debt you're buying these properties with cash only that means both of these properties are paying you a seven percent annual return because here you're buying this house for a million dollars and you're making seventy thousand dollars a year in rental income profits and here you're buying this apartment complex for a million dollars and you're making seventy thousand dollars a year in profits but you also have to remember that just because you made seventy thousand dollars doesn't mean you get to keep seventy thousand dollars because the irs wants to cut you gotta pay taxes on this money however real estate does come with some legal tax loopholes when you own real estate as an investment meaning you're not the one living here you are renting out your property to somebody else then you get to tell the irs hey this property that i own is one year older so i deserve a tax break called the depreciation deduction on my taxes and so you get to take a tax break on both of this income right here because you own investment real estate but the size of your deduction is going to be different here and here because this single-family home is considered residential real estate and this apartment complex is considered commercial real estate residential real estate so single-family homes two families three families and four family units lets you depreciate your property for 27 and a half years while commercial real estate so anything over four units lets you depreciate this property over 39 years i'm gonna explain what this means so now what you're going to do is you are going to take the value of this building not the land the building itself and divided by the number of years that you can depreciate it on your taxes so for the sake of these examples let's assume that when you buy this one million dollar property 200 000 of which is going towards the land value because you know these properties sit on some land and eight hundred thousand dollars is for the building so you paint two hundred thousand dollars for the land that this property's on and eight hundred thousand dollars is for the actual building once you know that now you can do eight hundred thousand dollars divided by twenty seven and a half which is one second eight hundred thousand dollars divided by twenty seven and a half twenty nine thousand dollars so over here you get a twenty nine thousand dollar tax break every year for twenty seven and a half years and over here eight hundred thousand dollars divided by 39 this is about 20 000 so here you get a 20 000 tax break every single year for 39 years what this allows you to do now is you buy this property you make 70 000 a year but you only pay taxes on seventy nine thousand dollars minus twenty nine thousand dollars so right around forty one thousand dollars you're only paying taxes and forty one thousand dollars worth of income for the first twenty seven and a half years after twenty seven and a half years you don't get this deduction anymore same thing here here you make seventy thousand dollars but you only tell the irs that you made fifty thousand dollars and you get to do that for 39 years after 39 years you don't get that deduction anymore which is why a lot of people invest in real estate but they have the goal of never holding it longer than 27 and a half or longer than 39 years however you also get some benefits if you own real estate for your entire life so this is the reason why you wouldn't want to own real estate for your entire life because after 27 and a half years or after 39 years you no longer get this tax break and so now you have to pay more money in taxes and so if you don't want to pay more money in taxes you might want to sell your property after 27 and a half years or after 39 years that way you can take advantage of all these real estate tax breaks however let's go over why you might want to own real estate for your entire life so now same example you buy either one of these properties for one million dollars and you own it for some time and you're making rental money every single year but now a few years go by and you find out that your property is now worth five million dollars so you got a lot of equity in this property because you bought it for one million and now it's worth five million dollars and now you're thinking yeah i want to give this property or this money to my kids now one thing that you can do is you can sell this property and get five million dollars worth of cash but now you have millions of dollars with a profit because you bought this property for one million dollars and you're selling it for five million dollars so you're gonna have a pretty big tax bill where you're gonna have to give a big chunk of this money to the irs in taxes the alternative assuming you do not sell this property for cash when you're alive and you own these properties either one until you die now when you die your estate gives this property either one to your ears your kids now what happens is your kid is gonna get this property and the government is going to say that your kid got the property they bought it for five million dollars so if your kid went out and they sold this property today for five million dollars after you die they will get this five million dollars of cash and they don't have to pay any taxes on this money because to the government it looks like they bought the property for five million dollars this concept is called stepped up basis and essentially what it's saying is if you die with this property then the person you give this property to essentially can say that they bought the property for how much it's worth when you die so now if you get here you don't have to worry about selling your property for a profit and then paying taxes and then giving this cash to your kid what you can do is let this property live with you for the rest of your life and then when you die you give this property to your kid and now what you have to worry about is estate taxes but you get a much bigger kind of cushion with estate taxes because you have to be gifting millions of dollars before any estate taxes come into play now i do got to let you know although i am an attorney i am not your attorney so if you have specific tax questions or legal questions talk to a professional in your area the last reason why i say real estate is an investment that you want to own for your entire life is because with real estate you own something tangible that you can see feel and touch and this is something that can continue to provide you income and income growth for the rest of your life because if there's demand for this property wherever it is then what you're going to see happen is more people are going to want to live there which means the rent that you charge can go up to so now as things become more expensive because of inflation the amount of money you make every single year also increases because there's more demand to live in the property that you own second thing you want to own for life is the stock market in general and when i say the stock market in general i don't mean investing in stocks the way most people talk about investing in stocks i talk a lot about investing on a youtube channel from real estate investing to stock market investing which is why if you haven't subscribed to our channel yet you should do that but when most people talk about stock market investing they're trying to find the next hot stock how can you find the next tesla or the next amazon or the next apple before it makes it big now you can make a lot of money if you find the next hot stock but that might not be something you want to own for the rest of your life because well tesla could fail amazon could go bankrupt and people might stop liking iphones now i know what you're probably thinking oh just breathe amazon can't ever fail they're a powerhouse how could anything be bigger than amazon well that's exactly what people used to think about sears sears used to be the monster retailer and back in the day people used to think that there would never be a serious competitor because they were so huge well now times have changed technology has changed and sears is bankrupt companies will change technology will change people will change but one thing if you believe in the united states and if you believe in the american economy one thing that won't change is the economy so if you believe in the american economy what you want to be better on is the american economy because while companies like sears might come and fail and jcpenney might come and fail and circuit city might come and feel and hurts my common feel and california pizza kitchen mccomb and feel the american economy has continued to grow the closest way for you to get actual exposure to the american economy is to invest in the broader stock market as a whole and that would be through funds like v-o-o and s-p-y these are two different etfs exchange traded funds which allow you to invest in the broader stock market because both of these funds give you exposure to the top 500 companies in the united states so both of these funds give you exposure to the s p 500. now i want to give you a little caveat here because the united states economy and the stock market are similar but two different things the economy is the economy this is our companies and this is how many people have jobs and this is how well our economy is doing the stock market is where people bet their money based off of how well they think the economy is doing so while they're similar they are different because when people put their money in the stock market they're betting that the economy is going to do well in the future the way you invest in these funds is the same way you invest in any other company you just go into stock brokerage and then buy these funds as opposed to buying something like tesla or amazon now i should also remind you that when you invest your money you are never guaranteed to make money you might even lose money when you invest which is why you should always always always do your own due diligence and never blindly listen to a random guy on youtube but when you invest in funds like these now what you're doing is you are essentially betting on the growth of the american economy you're not trying to get rich overnight you are just betting on the slow and steady growth of the economy if the economy is growing and our companies are growing and companies are making more money well then chances are these funds are going to continue to make you more money too by the way if you do want to learn more about how to actually invest your money in the stock market and grow your money and find a good stock mortgage to use our team put together a very comprehensive article that goes over all of that and you can read it on our website the minoritymonster.com and i'll also link it for you in the description below the advantage with owning something like this for the rest of your life is now you don't got to worry about changing trends because like i said before companies will change people will change and technology will change but the economy will continue to grow so as companies come and go these funds will kick out the companies that are not doing too good and they will add in the companies that are doing better so if a company is no longer one of the top 500 companies it will get kicked out of these funds and then these funds will add in a new company who is now one of the top 500 companies now the difference between owning something like this and owning real estate is with real estate typically you're investing in real estate for passive income so you're gonna make investing decisions based off of how much money you're making every single month here you do get some passive income from dividends but it's not going to be as much as the amount of passive income you're getting from real estate however you do get the stepped up basis here like you did in real estate so if you invest 1 million dollars here and over your lifetime this goes up to 5 million dollars well you could sell your investment and pay taxes and then give this money to whoever you want to give it to or you can own these investments for the rest of your life and if you don't have to use this money and you die with these assets well now they can go to your kids or whoever you want it to go to and they will own these assets and when they sell it if they sell it for five million dollars which is how much it's worth when you die they won't have to pay any capital gains taxes on that the third thing you want to own for life is gold with an asterisk because there should be a small partner portfolio no more than five to ten percent of your entire portfolio because gold is not there to make you wealthy it is there to protect you against a worst case scenario type of situation your stocks and real estate are what you own to fund your retirement to create more passive income and to build your wealth your gold is almost like financial insurance is there to protect you against something horrible happening in the economy there's a few different ways that you can invest in gold you can invest in companies that mine in gold now you're not actually investing in gold you're investing in companies that mine in gold and as gold prices go up these companies make more money because there's more of a demand for gold or the second thing you can do is invest in gold certificates so now you're investing almost like gold stocks you're investing in a fund that gives you exposure to actual gold so a company owns physical gold and now you're investing in a fund that this company created which gives the exposure to their actual gold so it's a little bit of a derivative but it gives you exposure to physical gold and the third thing that you can do is invest in physical gold bars so if we're talking about owning gold the ideal thing to do is own the physical gold bars because that gives you the most insurance because this is something you can see feel and touch and it's something that you can control again this should not be a huge part of your portfolio and this should not be something you're stressing about and if you don't have any other investments you should not be worried about buying gold right now the first thing you need to be worried about is buying the real estate buying the stocks buying the things that are actually going to make you money once you establish yourself and once you have some real financial assets that's when you can think about adding some gold remember asterisk adding some gold to your portfolio gold comes in handy in worst case scenario type of situations so when we talked about investing in stocks we're betting on the american economy because if the economy continues to grow well then the stock market is going to grow but if the economy completely fails and our dollar becomes worthless and people have no money well this is where gold could have value gold is the original currency and a lot of people believe that if the dollar were to fail then people would revert back to gold if you remember back during the great depression there were countries in the world that saw hyperinflation where people would have to take literally a wheelbarrow full of cash in order to afford a loaf of bread because then gold became so expensive and so the thought is if the worst case scenario type of situation happened and the economy crashes and the dollar goes to nothing well then people will go back to things like gold because this is a tangible currency and this was the original currency you know people have been betting on a doomsday situation like that for decades and decades and decades and to date they've been wrong every single time which is why you want to make sure you're investing in your wealth first but you always want to protect yourself because yeah there's a chance that things could go really bad which is why you want to own some gold going along with that the fourth thing you want to consider owning for the rest of your life is some cryptocurrency so this is what's considered the new digital gold gold was the original currency and many people believe that cryptocurrency and blockchain will be involved in our future currency now look there's a lot of speculation around cryptocurrency and there's a lot of guessing around what cryptocurrency will be in the future and nobody can predict the future which is why again we got this asterisk here because this needs to be a small percentage of a portfolio okay this is not something you want to bet your entire life savings on this is something where you want to put some money because there's a lot of potential for cryptocurrency and there's a lot of potential for blockchain however there's a lot of uncertainty around it again this should not be your first investment get the things that are proven first out of the way own your stocks own your real estate all the things that are going to make you wealthy and pay you with passive income then once you do that you can put some money here and fifth the last investment we're talking about that you want to own for life are commodities that you need to survive so one way to kind of think about this is you might have heard examples of super wealthy people and rich people that have these bunkers in their homes that protect them against any nuclear blast and inside of these bunkers they have food and rashes that will survive them for years now i'm not saying you need to spend a million dollars building an underground bunker below your home but you should consider investing in some commodities that people will need to survive so one example of this is water if you've ever seen the movie the big short great movie by the way which talks about the 2008 real estate collapse at the end of the movie they talked about how this guy was investing in water because we have a limited supply of water in the world and our demand and our needs for water keep going up we need water in order to survive it's a commodity to survive and so this is not something that's going to make you rich overnight but if the demand and the need for water go up and a supply of water is limited well this could create a real problem in the future and so you want to be kind of a proactive thinker and start thinking about things on how to take care of yourself and your finances in this case and one way that you can get exposure to that is by investing in again companies that clean or store water or investing in water etfs that give you exposure to the water commodity another thing that you can potentially consider is look at investing in a farm an actual farm for your family just in case because we never know what's going to happen in the future i mean we have a lot of tension in the world and let's say things go bad if you have a farm well now you can kind of be self-sufficient you can grow your own food and have things to take care of yourself and take care of your family again this is a commodity to survive is this something that's going to make you rich overnight no but you're protecting yourself against anything if you enjoyed this video here's a video on how to never be broke again that i think you'll love and while you're at it join our free finance and business newsletter and as always keep hustling assets are things that put more money in your pocket these are the things you need to buy if you want to build wealth liabilities are things that make you look rich but they keep you broke

Channel: Minority Mindset

Views: 73,052

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

Id: y9WXR91Z4IM

Length: 88min 49sec (5329 seconds)

Published: Sun May 30 2021