- As soon as I left school,
I started my first job and I saved every penny I made
which made me a multimillionaire
and gave me the life I'd always dreamed of.
This statement isn't just false.
It would've been downright impossible.
The trouble is many people that want to get rich are falling
for the money saving trap.
Why?
Because it's exactly what they want you to believe.
They want you trapped
in a constant cycle of never having enough,
so you are forced to work a job you don't enjoy until
you've saved enough to retire when you are old and gray.
If you want to get rich, then you need to break
out of this system, but it's not gonna be easy when I say
that you have little to no chance of saving your way
to becoming a millionaire while you're still young.
I'm not trying to crush your dreams, quite the opposite.
I want you to accelerate your timeline
and start building the life you want now,
while you're still young enough to enjoy it.
So if you want to become rich,
then listen closely and things will start to become clearer.
Part one, your money isn't real.
Would you like to live
in a world where all your choices are influenced
by someone behind the scenes secretly pulling the strings
and conducting your life like some kind of orchestra?
Of course you wouldn't.
Unfortunately, this is far closer
to reality than you might realize.
For years now, institutions like banks
and governments have been taking advantage
of people who haven't been taught how to manage their money
and it's not their fault.
The schools just don't teach them this stuff.
Saving money gives people the illusion of control.
Meanwhile, the banks are making big
profits right under our noses.
Let me explain.
In the past, you were actually able to walk into a bank
with your money and demand to exchange it
for gold.
This kind of makes sense
as it's a bit inconvenient to travel around
with big blocks of gold in order to buy goods and services.
So therefore, money was created.
This was called the gold standard,
but it stopped in 1933, and the US dollar,
like most other currencies, became what we call fiat.
The money you have in your wallet is fiat money
as it's most likely a government issued currency
that is not backed by a physical commodity.
This means that your dollar only holds value
because the government says it does,
which gives them much more control
over the economy as they can decide which rate is printed.
So it turns out that the money most people chase
and hoard is a bit like monopoly money.
It only has value because the game says it does.
To put the icing on the cake,
the banks then offer to store your money
in return for a measly 0.5% interest
all the while they're using it to generate huge profits.
It's no secret the banking is one of the wealthiest sectors.
However, it wasn't always this way.
They used to be just a place that looked
after your money and made a fair profit.
However, over the years,
they've just become more and more hungry
for new ways to use your hard earned money
to boost their income.
An example of this is the selling of subprime mortgages,
which was one of the reasons for the 2008 financial crisis.
Just to clarify,
I'm not saying the banks are completely evil.
They just act in their own self-interest,
just like most other businesses.
So we can't blindly trust them to have our back.
Many millionaires, such as Robert Kiyosaki
who's the author of "Rich Dad, Poor Dad,"
are very keen on saving what they call God's money,
which is gold.
Oh, sorry, gold and silver.
They call it this because it has real value rather
than the promised value of fiat money.
In my opinion, this is a good strategy for the rich
as it offers a great way to protect your wealth.
However, your trading potential growth for security
which isn't right for everyone,
especially while you are young and you can afford some risk.
I still feel like a spring chicken in my twenties
so I don't hold that much gold.
I'm far more interested in other assets.
We'll get onto those a little bit later.
Part two, your money is disappearing.
For this next point,
imagine you have, let's say, $10,000
in your bank account earning 0.5% interest per year
which is well over the average rate in the last five years.
If you froze yourself,
for 1000 years in one of those cryogenic chambers,
when you emerged and checked your bank account
you'd have nearly $1.5 million.
Isn't that absolutely amazing?
Well, actually, no, it's pretty terrible
because that $1.5 million would buy you less
than the original $10,000 would today,
because even though it's had all that time to build up,
it's been losing 1.5% in value every single year.
Now, obviously, this is a pretend scenario.
However, the point remains the same.
By leaving your money sitting in a bank account,
it's actually slowly being eaten
away by inflation every single year.
I've seen this firsthand
as the same dollar today
used to buy me far more when I was younger.
With a dollar, I could buy a movie ticket,
a bag of popcorn
and a portion of chips on the way home.
Now, it won't even buy me a tango ice blast slushy,
whatever that is.
At the time of shooting this video,
the rate of inflation is reported to be 3.67% in the USA,
but in reality, it's probably a lot higher than this.
The way they measure inflation is just so prone
to being manipulated, but we won't go into that right now.
The main point is that your money is becoming less
and less valuable by the second.
But why does this happen and why can't we just stop it?
Well, the first factor is called demand pull inflation.
A good example
of this is the car shortage during the pandemic.
This caused a higher demand for used cars,
which drove up the price.
The second factor is cost push inflation.
I'm very familiar with this
as I've been developing a couple of houses recently
and the building materials as well as wages are going
through the roof, quite literally through the roof.
The third factor that everyone always talks
about is increased money supply.
Inflation is caused when the money supply
increases faster than the rate
of product production.
Put simply, when there's just
too much money and not enough products,
like when all that free money was being pumped
into the economy during lockdown.
So I hope you can see now
that your savings are being eaten away from every angle.
Part three spending isn't the answer.
We live in a consumption society that has
psychologically programmed us to behave in a certain way.
You've been lied to all your life by your parents
your friends, and your teachers,
leading you to be tricked
into doing things you actually don't want to do
and on many more occasions than you realize.
So I'll give you the choice just as Morpheus gave Neo
in the Matrix.
You take the blue pill and you wake
up tomorrow and you believe whatever you want to believe
or you take the red pill
and you realize how deep this rabbit hole goes.
As I have no way to know which pill you picked,
I'm gonna assume you wanna know the truth.
Once you start seeing money differently
and as a tool to grow your wealth rather
than something you just use to buy things with,
then you can have everything you ever want.
It's important to have an emergency fund
of three to five months of your living expenses,
but you should only dip into this as a last resort
and not take a spontaneous trip to the Caribbean.
Yeah, I know I said it the American way,
but it sounds so much cooler than the Caribbean.
Caribbean.
Part four, how you can beat the system.
The markets will historically give you
an average yearly return of eight to 10%,
which would be a good option for most people.
Of course, this isn't guaranteed, but if we look
at the last hundred years of data it seems pretty reliable
and it's certainly been my experience.
It's extremely simple to log into an investing app
and buy a low cost index fund
like the S&P 500 and just hold it long term.
But there are four things you need to consider
before you start investing.
The first thing is transparent
low pricing and no fees for investing in ETFs.
As you really don't want to be paying 1% fee
every time you buy an ETF.
This will just eat into your returns.
The second thing is the ability to invest
in money market funds
as they normally have better interest rates
than savings accounts,
while not being as risky as investing in stocks.
Instead, these money market funds invest
in high quality short term debt
from governments, banks, or corporations.
These are great as you can draw your money out very easily
and the interest otherwise known as the yield is paid
into your account on the first of every month.
But it's worth noting
that money market funds are not insured or guaranteed,
unlike savings accounts,
which are under FSCS protection and may lose value.
The third is a multicurrency account,
which you can use to earn interest
on your non invested cash sitting in your account,
ideally at rates of up to 4.5% for the great British Pound
and US dollar, as well as 3.25% on your Euro account.
And lastly, I like to make sure I have a wide range
of stocks available to me
as I hate being restricted by the platform
I decide to use.
The investing app Lightyear,
offers everything we've just discussed
and has over 3,500 stocks and ETFs available to invest
in with just the click of a button.
They're also currently given away a $10 fractional share
to everyone that signs up with the code TILBURY.
Please note that this video includes financial promotions
and I also get a commission from the code
and the affiliate link, which helps support this channel.
Part five.
You need to start now.
Many people see saving lots of money as a safety net.
I've even heard some people saying they like the look
of the numbers on the screen
but what they don't realize is the opportunity cost.
How many times have you been sat
on the sidelines watching people make money and thinking
when's it gonna be my turn to make some?
Just think of all the people that left their money
in their savings accounts during the last couple
of years because they were too scared to take a risk.
The scary thing is that the biggest risk often turns
out to be not taking one at all as they end up missing
out on some crazy crypto and stock market profits.
Currently, many people say Tesla stock is overvalued,
and due to this, they deem the stocks untouchable
and are waiting for the price to drop before investing.
But things can change so quickly.
Between August and October, 2021, Tesla stock jumped
from $700 to near $900.
So the cost of waiting here is 35%,
but if you don't have that kind of money,
then you don't need to buy a full stock for $700.
You could have just invested as much as you would've liked
and bought a fractional share.
So if you'd invested a hundred dollars, you'd have made $35.
On top of this,
the average saving account interest rate
is not point 0.06%.
There is no opportunity here.
The bank take your money and invest and loan it out
at far greater rates than this.
Money is for emergencies, enjoyment and investing.
Therefore, you don't need everything on hand 24/7.
By the way, for all my American viewers,
you can get 16 free stocks worth
between two and $2,000 by signing up
for Moomoo with my link in the description.
It's basically free money,
and they're a great investing platform.
Now, I'm not gonna pretend I don't save money
because of course I do.
In fact, to tell you the truth,
I've always saved more money than most investors.
However, the idea of saving all your money
in a bank account is Boomer thinking.
It might have worked back in my day,
but now things are changing and we need to adapt.
I'm quite optimistic about the future
as people really seem to be taking
control of their finances, which is a great sign.
The truth is money is a tool not to be hoarded,
but to be used.
In my opinion, you shouldn't keep all your money
on the sidelines as it's much better
to let it go out and play.
More often than not the worst that'll happen
is you'll be back where you started.
Remember, you miss a hundred percent
of the shots you don't take.
So I'm gonna leave the next video right up there,
but don't click on it just yet.
Make sure to subscribe if you want to grow your wealth.
Okay, I'll see you over there.