The Secret To Not Being Broke

people are spending 400 on an umbrella when they have no job they're going into debt credit card debt to buy lottery tickets because some states let you buy lottery tickets on a credit card and then they're praying to get approved for a store credit card so they can save 15 off of their order and now you're wondering why you're broke [Music] what's up everybody i'm just playing singh from the minoritymindset.com and welcome to the minority mindset 78 of americans are living paycheck to paycheck that means if you walk out of your house right now and you look down the street and you look at your neighbors 8 out of 10 of your neighbors don't have a couple thousand dollars in their bank account right now to protect them from a financial emergency it doesn't matter where you live this is the reality of what's going on in america right now the majority of people are broke i know this is going to hurt a lot of people's feelings but there's a lot more to this than just how much money you make i've talked about people like earl crowley on our youtube channel who make minimum wage and yet have built a multiple six-figure investment and savings account while having kids while living a life and then on the other hand i've also talked about people like henry's if you remember henry is an acronym that stands for high income earner not rich yet and it's this movement of people that make at least six figures a year that are broke because their goal right now is not to save money or invest money but to live this lavish lifestyle where they're spending all their money to look rich this is where the vast majority of people get kind of offended and they put up the smoke screen and they say things like oh you shouldn't talk about money like that then you shouldn't worry about money when in reality we all use money every single day if money really didn't matter then why are you going to work every single day to get a paycheck now i get it there's a lot more to life than money okay money is just one small aspect of our life but if you don't understand money and if you don't have money you'll become a slave to money because now you're drowning in debt and you have all these payments that you can't afford so you're going to work every single day not to enjoy your life not to do something fulfilling but just so you can make and back payments but if you understand money and you know how to use money and you can grow your money now you can build your wealth now you can take care of yourself and your family financially and you have more money to help other people and to help your community because you have the resources to do that if you're broke you don't have the resources to help other people when you're broke and you're drowning in debt the only person that you're helping is your bank because you're paying these insane rates on money that you borrowed to buy things that you didn't even need so many americans put a lot of weight on luck when it comes to success and i'm speaking strictly financial success right now they see somebody who's become wealthy or rich and they say oh this person must have become wealthy they must have inherited the wealth or they must have just got lucky with their business or their investments or whatever luck is the reason why they're successful if that was the case why is it that 88 of millionaires are self-made that means these are people who did not have millionaire parents these are people who created their millions themselves 9 out of 10 millionaires out there that are millionaires made it themselves this is where you can say oh they had an advantage or they had this or they had that we can spend the rest of our lives looking for advantages that other people had as to why they could become successful or you can spend that same time understanding how to use your money the right way that way you can build your wealth because there's a system to understanding how to use your money the first thing you got to do is get your mindset right i talked about this a little while ago on youtube but i was at speedway getting gas and speedway actually had this video on their screen i was talking about how they let you buy lottery tickets with credit cards and i went in because i needed to get a pack of gum and there was a lady there who was frantic who was freaking out because her credit card got rejected when she was trying to buy like 150 worth of lottery tickets she was buying dozens and dozens of lottery tickets because this was her kind of hope of becoming successful spending all your money on lottery tickets or financing this lottery tickets is gambling and it's a straight path to broke not only are you not going to win but now you're going to be spending all your future paychecks paying off these bad decisions wealth is a long-term game and if you really want to know the secrets to not being broke and the secrets to becoming wealthy there's five things that you need to understand these are the five things you have to understand first you gotta stop living in a net zero life second you gotta avoid the money traps that are out there third you need to know how to grow your money and grow your wealth faster fourth you gotta stop living in this game of the fake flex and five you need to understand the game of how money works these are the five things i'm going to be going over in this video so make sure you watch this video until the end first let's talk about living this net zero lifestyle because this net zero lifestyle is keeping the majority of people broke and it is holding you back from becoming wealthy the way it works is like this the majority of people think okay i have a hundred dollars in my bank account right now and if i have a hundred dollars in my bank account that means i can go out and i can spend a hundred dollars on a pair of shoes because i have a hundred dollars on a bank account if i have a hundred dollars i should be able to spend a hundred dollars this is net zero thinking because if you have a hundred dollars you can spend a hundred dollars this mindset kills people's wealth because if you have a hundred dollars you cannot afford to spend a hundred dollars this is why i keep saying that your income is now what determines if you're going to become wealthy or not and your income is now what's going to determine if you're going to live broke or not it's what you do with your money if you make a hundred thousand dollars and then you spend a hundred thousand dollars guess what you're broke if you make twenty thousand dollars a year and you spend twenty thousand dollars guess what you're still broke the very first thing you have to understand is you are not allowed to spend every dollar that you have because some of your money needs to be saved to protect you from emergencies and some of your money needs to be invested to help build your wealth okay if you have a hundred dollars in your bank account you cannot afford to spend a hundred dollars this becomes even more true if this money that's in your bank account is not yours so when i was in law school i had this friend or acquaintance rather that was in my law school with me and i was talking to him one day about what his plans were for the evening and then he told me that he was going out to buy a really nice umbrella i thought it was kind of funny that his evening activity was to buy an umbrella but i understand it because you know we're in a rainy area and it's not fun to go walk around when it's wet outside so i told him that i bought my umbrella from home depot when i paid like five dollars from it and he told me now remember this is when we were in law school okay he did not have a job he told me that he wanted to go out and buy this really fancy 400 umbrella he showed it to me on his phone i was like 400 for an umbrella who spends 400 on an umbrella and he told me that he had this extra cash from his student loans and his bank account so he wanted to use this money to buy and invest in this umbrella so when he goes to these attorney interviews he's gonna look really fancy with his 400 umbrella in his hand that is net zero thinking on steroids now you assume oh i have four hundred dollars in my bank account even though this money is not yours this is money from the bank and you feel like you need to spend this money because this cash is in your bank when you live this lifestyle of spending every dollar you have in your bank whether it's your money or someone else's money it's even more expensive when it's someone else's money but when you have this need to spend every dollar you have on things that don't make you money like an umbrella you are going to be broke the solution to this net zero thinking is to create a system where you are not allowed to spend all the money you have you have to create the system where you know that you have to live below your means this is where a rule of five comes into play our rule of five says if you cannot buy five of them you cannot afford one of them so if you have a hundred dollars in your bank account and we're talking about things you don't need to survive if you have a hundred dollars in your bank account and you wanna go buy something you can only afford to buy something that costs twenty dollars because if you have a hundred dollars in your bank account this twenty dollar thing is what you can afford to buy five times over so if you cannot buy it five times you can't afford to buy it one time second let's talk about money traps to avoid because the majority of americans are broke and will never build wealth because they're spending money they don't have on things they don't need which will never make them any money sometimes this is obvious like i just gave you that example of that person i knew in law school who had money from student loans this money was not his this is the bank's money that he spent to buy an umbrella right but sometimes this money trap isn't so obvious when the majority of people say that they can afford something what they actually mean is i can make the monthly payments but that's very different than being able to afford something the simplest example of this is your cell phone okay your thousand dollar cell phone that you have in your pocket so many people are financing this phone on 20 30 40 50 monthly payments because they cannot afford to pay a thousand dollars for a phone so they think oh i can afford this phone because i can pay fifty dollars a month with zero percent apr financing so i'm not paying any extra money and interest and i can afford this phone right but this is a money trap what happens when you finance something that you can't afford that you don't have the cash to buy up front well now you're going to be paying this 20 30 40 50 a month for the rest of your life because every year you're gonna get into this trap of buying a brand new phone and then secondly you never have the pain of this money leaving your wallet you think that you just bought a thousand dollar phone but you never had the pain of a thousand dollars leaving your wallet all you saw was fifty dollars leaving your account every single month and so you think now oh i bought this thousand dollar phone and it's only costing me 50 a month so let me go and buy this 2 000 laptop that you can't afford but it's only 85 dollars a month so now you buy that and then you buy the sofa that you can't afford because that's only 75 a month and now you're spending money on things that you can afford because you think you can live way up here but you can actually afford down here you thought you were being financially smart by paying zero percent apr but you just got played because now you're spending more money on things that you don't need because you never had the pain of money leaving your pocket in the first place the reason zero percent apr is so profitable for businesses is because when you buy things with zero percent apr you never have the pain of money leaving your bank and so now you can buy a whole bunch of things that you didn't know that you can afford because you can't actually afford it all you think you can afford is the monthly payments there's a difference between being able to afford a smartphone and being able to make the monthly payments there's a difference between being able to afford a brand new car and being able to make the payments you need to start being able to afford the things you buy not just making the monthly payments the goal with the first two things that i talked about not living that zero and avoiding money traps is all so you can grow your money and your wealth faster if you follow the first two things that i just talked about you avoid net zero you avoid these money traps what you're gonna see happen is all of a sudden you're gonna find extra money in your bank account out of nowhere now what you wanna do with this extra money is you wanna put some of it to work that way you can grow your wealth faster there's two terms you need to understand assets and liabilities i've talked about this before so if you haven't subscribed to our youtube channel yet make sure you do that but what you need to understand are assets are things that put money in your pocket liabilities are things that take money away from your pocket your 400 umbrella your shoes your lottery tickets all these things are liabilities if you're spending money on something and it's not putting money in your pocket or if you're not buying it for the sole purpose of making money it's a liability the interesting thing about liabilities though is liabilities make you look rich right when you go out and you buy a fancy new wardrobe you buy new shoes you buy a new purse you buy a new cell phone you buy a new watch all this stuff makes you look rich and so this is what broke people do broke people spend all their money on liabilities that way they can look rich but they're actually just product rich you look rich but you're actually broke because you have no assets if you want to become wealthy you got to flip this around you need to start spending more money on assets which are things that pay you for owning them and then once you have more money coming in then you can afford to buy these liabilities the first time i really understood this concept of assets and liabilities was when i first started investing in real estate i was running this event planning business and i had money in my bank account and i really wanted to buy this bmw it was a 3 series and i really wanted to buy a 3 series because it looks sweet and it would look really cool with my image but then for some reason i was reading books and every book talked about how wealthy people owned real estate i had no idea what real estate investing was i didn't grow up with real estate investing family members but i decided you know i wanted to try this out so instead of using my money to buy a car i ended up buying a small little condo this condo as soon as i bought it about a month later after renovating it i rented it out for 600 a month and after paying all expenses i was left with 250 a month in profit every single month and i didn't have to physically do any work to get this 250 a month this was passive income i was getting because i spent my money buying an asset instead of using my money to buy a liability which was a car 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 so now if your goal is to become wealthier faster you got to spend less money here and buy more assets aggressively and it doesn't have to be a ton of money to start you can start with five dollars a day or five dollars a week or twenty dollars a week whatever you have you just got to make these small incremental investments that way you can buy these assets and build your wealth faster the reason it's important for you to be buying these assets instead of just keeping your money in your bank account is because at the end of the day when you're working to make money you physically are working to make money when you save money your money is just sitting like this it's flat your money isn't doing anything the amount of money you have in your savings account today is going to be the same amount of money you have in a year of something you don't take any money out or put it in right so if your money is in your savings account it's just sitting there but you can't physically always be working right you want to live this life where you have other sources of income coming in this is where assets come in when you invest your money you can see your money grow like this it grows quicker than your money in your savings account and it grows without you physically having to earn this money you're using your money as a tool kind of like a magnet to go out and attract you more money and if you want to attract more money you need to be buying more assets the more money you put in here the more money you're going to get back a simple rule of thumb to help you out with this if you want to build more wealth faster hit to follow our five to one rule which says for every five dollars you spend on liabilities spend one dollar buying assets if you spend five dollars at chipotle spend one dollar investing in chipotle you could spend a hundred dollars at amazon spend 20 investing in amazon now if you do want to learn more about money management and investing like this that way you can grow your wealth faster we have a free ebook of money management and investing that you can read for free when you sign up for our financial education emails which are also free you can get a free ebook and start reading our financial education emails by clicking the link up here or by clicking the link in the description below by the way our financial education emails are separate from our financial news emails fourth you gotta stop living this fake flex lifestyle we're living in the day and age of social media where people live their lives based off of what they see on instagram look more than half the stuff you see on instagram is fake there are people that are going into debt to finance the perfect instagram page because people are going into debt borrowing money to buy things that way they look cool on instagram this has turned into a game of chicken where people are competing against each other to see who can go bankrupt first just because somebody has something doesn't mean they can afford it okay remember the things that we talked about in this video the majority of people are broke just because your friends are showing off the things that they just bought doesn't mean that they can afford to buy those things life doesn't have to be a competition these big companies want it to be a competition because they know that if all your friends are competing against each other on what you own you're going to be spending more money at these companies but it doesn't have to be a competition you don't need to go out and spend all your money and make every company around you rich use your money to build your wealth first this brings me to number five you gotta understand the game okay everybody in the world is after your money okay this does not mean that businesses are evil that they don't deserve to exist this is just how the game works businesses want your money apple wants you to buy their airpods lululemon wants you to buy the leggings chipotle wants you to buy the extra guac what you need to do is create this filter okay the whole world is asking you for your money what you need to do is have this filter in place that way you know what is worth spending money on and what is not spending money on because right now what the majority people do is they don't have this filter when they see something they like they just spend their money they don't have this filter you need to know what's worth spending money on and what's not worth your hard earned money the goal is not for you to live small for the rest of your life okay the goal is for you to live bigger and expand your means but the only way you can do that is if you have more money for yourself that way you can invest more money into yourself that way you can have more money attracting you more money and when you have that that's when you can go out and live a bigger lifestyle you can buy the nicer things you can have the nicer car you can have the bigger home but in order to do that you need to make sure you can afford it first that way you're not stressing about the payments the goal of the game is to become wealthy that way you can buy all the nice things you want without worrying about the price but you can never do that if every time you make a book it's constantly just going out you need to know when it's worthwhile for you to part with your money but this also goes both ways because once you understand the game and you understand how money works that's when you're going to want to fuel your financial system because now you understand okay i need to use more of my money to buy assets investments which are things that pay me and if you really want to ramp that up then you're going to need more money coming into your financial system that way you have more money to invest and you have more money to grow your wealth faster and the only way you can do that is to come onto this side of the equation the producer side of the equation and learn how to create more income this is going to depend on what you like maybe you're just going to work overtime at your job you're going to try to get a promotion you're going to try to get a raise that way you can earn more money for some of you this might be starting a side hustle maybe you have a side cake business maybe you become a freelancer you just have this thing on the side that you do to earn more money that way you can build your wealth faster and for some of you with the entrepreneurial bug this is the opportunity for you to go out and understand how to create value that way you can create a product that people need that improve people's lives the name of the game is not spending money whenever you can and then trying to find steals or deals that are not actually deals one time i was at the mall before this whole pandemic happened and there were these two girls in front of me in the line to check out and the cashier asked them would you like a store credit card because you're going to say 15 off your order i forget which store this was now maybe it was macy's or jcpenney and these two girls were like yeah that would be great and then the cashier starts looking up the credit information and these girls were literally praying that they would get approved for the stroke credit card and when the cashier came back and said that you're approved they literally started dancing with joy right when you have that you are just being bombarded with these places these companies that want your money and you're just giving it to them as soon as you have the opportunity you got to stop living like that you need to understand the game that way you can keep more money for yourself and build your wealth first if you enjoyed this video here's a video that i think you'll love and while you're at it make sure you subscribe to the minoritymaster youtube channel and grab our free ebook that way you can get our financial education emails here's a trailer for the next video and as always keep hustling dude i don't want to wait 30 years to become a millionaire i get it hearing things like you should not buy a

Channel: Minority Mindset

Views: 355,897

Keywords: minoritymindset, minority mindset, jaspreet singh, rethink rich, the secret to not being broke, secret to not being broke, how to not be broke, how to not be broke anymore, personal finance, save money, financial freedom, build wealth, live below your means, personal finance management, money management, money management 101, money management tips, money management for beginners, rule of 5

Id: nQgLoIGFCs0

Length: 19min 30sec (1170 seconds)

Published: Fri Nov 20 2020