Unlocking the Secret to Your First $100,000: Learn from Charlie Munger

Charlie Munger the vice chairman of Berkshire Hathaway and Warren Buffett's longtime business partner has famously said that the first one hundred thousand dollars is the toughest manga believes that the initial accumulation of wealth is the hardest because it requires a combination of discipline hard work and smart decision making in this video we will try to teach you some of the Core Concepts that could lead you to your financial goals so let's get started the first thing you should do is to start saving your money a good way to get started with that is by setting a clear goal for how much you want to save each month this could be a specific amount such as five hundred dollars or a percentage of your income such as 10 percent next you should make a budget which is a crucial tool for managing your finances and identifying areas where you can cut back on expenses start by tracking your income and expenses to get a clear picture of your monthly cash flow then look for areas where you can reduce expenses such as eating out less or canceling unused subscriptions one of the easiest ways to save money is to set up automatic transfers from your checking account to a savings account this way you can save money without even thinking about it so have you found a way to save 500 per month great then let us have a look at the numbers if you do nothing else you will have saved one hundred thousand dollars in a little more than 16 years now that is not bad but I am certain that you want to do this even faster this is where investing comes into the picture there is many forms of investing and it should be entirely your own decision which route to choose but for the sake of this video I am going to recommend one that I like index funds as this video is not about index funds but rather economical Concepts I will not go into details about what an index fund is but briefly it can be described as a type of mutual fund or exchange traded fund ETF that tracks a specific Financial market index such as the S P 500 or the Dow Jones Industrial Average the funds portfolio is constructed to replicate the Holdings and performance of the underlying index if you bought the Vanguard 500 Index Fund 10 years ago you would have gained an annual return of 12.21 percent if you every month invest that 500 you are saving up into the Vanguard 500 you will now achieve your goal of one hundred thousand dollars in a little more than nine years instead of the initial 16 years should you continue to do this for 26 years in total you would be a millionaire you can adjust the numbers as you want to either save more or wait more year but keep in mind that these are clean numbers on a piece of paper reality is never that straightforward if you think that it will take too many years before you reach your goal of one hundred thousand dollars then there are other options that you can invest in although the 12.21 return from the index fund is good your fortune will grow much quicker if you could achieve 20 percent therefore there are other options you can go with if you are willing to take the chance if you think you can outperform the market then there is always the option of buying stocks this is a more risky method but allows for much bigger games fast another way to invest your money could be in real estate buying and renting out properties has made some people very rich the idea of someone else paying down your mortgage is something that appeals to a lot of investors if none of the above are your thing you can also invest in Commodities like gold or silver which is one of the most crisis resistant Investments you can make choose whichever you feel most comfortable with and be honest with yourself about where both your interest and competencies lies if you have never looked at the annual report of a company's finances and it doesn't interest you then you are probably not going to be the next Warren Buffett and should let professionals do that for you up until now we have looked to ways to invest as a way to reach 100 000 but there are other ways to reach that goal faster next we will discuss how to increase the amount we can set aside for Investments on a monthly basis if you are still here and find this video useful please like And subscribe to our Channel that way you'll never miss an episode of our ongoing series on personal finance and investing at our Channel we're committed to providing you with practical tips and strategies to help you Achieve Financial Freedom the previous example we looked at where we invested 500 each month into an index fund would take around nine years for us to reach the goal of one hundred thousand dollars if we instead of investing 500 each month invested one thousand dollars each month it would only take us six years to achieve our goal if you think one thousand dollars is a lot to put aside each month there are two ways to go either you cut down on your spendings or you increase your earnings the next part of this video will focus on ways to earn a little extra on the side that you will then be able to invest one option is to freelance and offer your services to clients if you have a skill or talent that can be offered as a service such as writing graphic design or social media management freelancing can be a great way to earn extra income platforms like upwork Fiverr and freelancer can help you find clients and projects another option is to rent out your space if you have an extra room in your home or a parking spot you can rent it out on platforms like Airbnb or parklet and earn extra income this is a great option if you live in a popular tourist destination or near a sports Stadium you can also rent out your driveway or garage for people looking for parking space in your area if you love animals you can earn extra cash by offering pet sitting or dog walking services to pet owners in your area platforms like Rover and wag can connect you with pet owners looking for Reliable pet sitters and walkers this is a flexible option that allows you to choose your own schedule and work as much or as little as you want you can also sell items you no longer need or want on platforms like eBay or Craigslist alternatively you can purchase items from thrift stores and resell them online for a profit this is a great way to earn extra cash while decluttering your home or pursuing a hobby if you have a reliable vehicle and a smartphone you can earn extra money by delivering groceries food or packages for services like instacart door Dash or Postmates this is a flexible option that allows you to choose your own schedule and work as much or as little as you want finally you can participate in online surveys and get paid for your opinions through websites like survey junkie or Swagbucks while the pay is usually low this is a simple way to earn extra cash in your spare time just be sure to avoid any survey sites that ask for payment or personal information remember earning extra cash outside of your regular job requires some effort and creativity but with the right approach you can achieve your financial goals faster we have now discovered some potential ways to earn your first one hundred thousand dollars which Charlie Munger believes is the hardest if you decide to either cut your spending or earn a little extra on the side it is all about having some free cash to invest in this episode we suggested the Vanguard index fund which is one of the most reliable and safest ways to make a steady return but are you willing to increase your risk we have also touched upon other investment vehicles although everyone would like to get rich instantly the most reliable way is putting money aside and investing them this should not keep you from starting your own company or trying to make it big on social media this is just one way of achieving that goal if you would like to learn more about what Charlie Munger believes is essential for achieving financial success you can click here finally I would like to thank you for watching this video on how to earn your first 100 000 I hope you have learned something and feel inspired to take the first steps towards Financial Freedom once again if you did like this video please like And subscribe to our Channel thank you and see you next time

Channel: The Billionaire channel

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Id: J2gAjiL2mE4

Length: 8min 3sec (483 seconds)

Published: Sun Jul 02 2023