- Every now and again I like to sit down
and take a deeper dive into my finances.
When I was running the numbers recently,
I realized that my savings had jumped by 10%.
Okay so I don't actually save 69.5% of my income,
but I do save 70% of my income every single month.
So in this video I'm gonna walk you through
how I save 70% of my income every single month.
The goal is to hopefully give you some ideas
to explore for yourself
so that you can greatly increase
your savings rate kinda like I have.
If that sounds interesting to you,
then please Hulk Smash that thumbs up button.
I would greatly appreciate it,
and it helps show my mom
that I'm not as big of a loser
as she thinks I am.
I think it's safe to say
that there is a big savings problem
when it comes to Americans,
not because we're all idiots,
but because you don't know what you don't know.
But once you know it,
it's one of those things where you're like,
oh okay I get it now.
It's the same thing
with maxing out your savings rate.
It's honestly not rocket science
and way way way more attainable
to increase your savings rate than you think.
I would go as far as saying that everyone watching this
is able to do 90% of the things that I'll show you.
But even if you can only do 50%
of these things that I talk about,
then that right there will greatly increase
your savings and investment rate
in a way that you didn't even think was possible.
Now when you hear that I'm saving 70% of my income,
then your natural thought may be,
well, you must make a lot of money then,
or, you must be so deprived
that you're not enjoying your life.
Actually I have pretty much everything that I want and need.
If I want something, then of course I buy it.
There is zero deprivation or cheapness
going on over here in this house.
If you wanna make this happen,
then you just have to get a few things right.
Don't forget to hit that Subscribe button
if you want more personal finance videos just like this one.
There's also all kinds of playlist in the subscription
for you to check out after you watch this video
to help you out with all of your personal finance needs.
Let's get into how I save 70% of my income
every single month right meow.
The first reason my savings rate is so high is that
I don't have kids.
Now before you get all angry,
start typing ignorant things in the comments
and giving this video a thumbs down,
I'm just being honest,
and I'm owing the fact that this does
play a role in my high savings rate.
So Hulk Smash that thumbs up button for honesty.
This is coming from a guy who really likes children
and is absolutely open to having kids in the future
if I can find a smokin' hot wife
that wants to have all of my babies.
Saying I can.
- I can.
- I can, we don't say I can't,
we say either I can or I will try.
- I will try.
We don't say I can't.
- No.
- No, we say I can or I will try.
- I will try.
- There you go, good job.
Or maybe I'll even adopt a kid in the future, who knows?
But I'm able to have more money in my pocket today
since I'm not caring for a cute
and sometimes annoying little monster.
The more important thing to take away from here
is that if you have kids now
or gonna have them in the future,
don't let the fact that you have kids
prevent you from increasing your income
to increase your savings rate.
It's one of those limiting beliefs
that's extremely easy to fall into if you're a parent
because you're already working hard enough
caring for these kids,
so how in the world
are you supposed to make more money as well?
The majority of my friends are parents
and a lot of them have found ways to increase their income
in ways that they never thought before.
Another thing parents can do
is make their kids work as early as possible
and start paying for things on their own.
This can greatly increase your savings rate
if you are a parent.
Now I know when I was 14,
I started working and paying for everything myself.
And I honestly think it's played a huge role
in shaping who I am today.
You should also force your kids to apply
for scholarships if they go to college
so you don't have to worry about
having to save money for them
every single munch, munch, munch, month
which will greatly increase your savings rate.
Paying off $82,000 of debt in four years
is still one of the best decisions I have ever made.
It's also a large contributing factor
to how I'm able to save and invest
70% of my income every single month.
My debt consisted of student loans,
a credit card, and a car loan.
Carrying debt has become so common among Americans
that it's something that everyone just accepts
as something that they'll always have,
kind of like that pet turtle
that I got from one of my exes.
That thing is gonna live forever.
Bad debt will be one of the largest destroyers
of your wealth above anything else
if you allow it to hang around until the day that you die.
It's like lighting money on fire every single month.
Not only are you losing money
through the interest that you're paying,
but you carry around this large amount of risk
everywhere you go.
It follows you forever.
Forever.
Name that movie in the comments
if you know what it is.
When you carry a bad debt,
you lock yourself into being vulnerable
to the insanity that's already here in life.
Your back is instantly in a corner
every single morning that you wake up,
and whoever you owe money to literally owns you.
They own your thoughts,
they own your feelings,
they own your emotions,
they choose what you can and can't do,
and they own your happiness.
Stupid people spend money that they don't have
on things that they don't need.
I decided to stop being stupid
and only buy things that I can actually afford
by saving up for it.
You can't know how much you're saving
unless you know where it's going.
Because of this a budget is extremely important
to my ability to be able to save 70% of my income.
Budgeting isn't about being cheap at all.
It's just a way for you to direct your money
and tell it where to go
as opposed to having it tell you
where it wants to go
which is usually right down the toilet
if you're not paying attention.
I recently heard about an author
that was trashing budgets
because he said that they prevent you
from earning more money and being happy
since they force you to cut back.
He said it gives the person a scarcity mindset.
My answer to this author is you sir are an idiot
because what prevents a person from making more money
has more to do with the person
not going out to pursue more money.
A budget has absolutely nothing to do with that.
A budget is a way for you to prioritize your spending
so that more of it goes towards things
that actually make you happy
and will improve your lifestyle
today and in the future.
I think there has been enough studies done on this
that buying more things
does not correlate to becoming more happy.
So if you love buying clothes
and that makes you
the happiest person in the world,
then that's great.
Budget for clothes and buy those clothes.
If pursuing financial independence or retire early
will make you super happy,
then great.
Budget your money so that you can achieve
financial independence or an early retirement.
Can you increase your savings rate without a budget?
I'm sure you can,
of course you can do anything you want.
But I could also go swimming with sharks and not get bit,
but I'm still not gonna hop in that ocean to do it.
No thanks, no way.
You can jump in on your own if you want.
The next reason I'm able to save 70% of my income
is that I don't spend insane amounts of money
on car purchases.
Does this mean that I only drive beaters?
Nope, not at all.
Instead I choose to buy more reliable car models
that have a better track record with cash of course.
The with cash and used parts are the keys to success.
Since I pay cash,
I don't have to shell out
extra money every single month
through that interest that I'd be paying.
I actually haven't paid cash for a car yet
since I still own a car I used to have a loan out for,
but I finally have enough cash
sitting in a high interest savings account
for when my current car dies.
And when that time comes, I'll buy a used car
preferably something over five years old
to avoid that depreciation that everyone faces on a new car.
Five years is the secret number since the average car
loses 60% of its value through depreciation
within the first five years.
So instead of paying interest by taking out a loan on a car,
I now save that money in a high-interest savings account
where I make money while that cash just sits there
until I buy my next car.
You'll never find me taking a loan out
on a car ever again in my life.
This one has actually been easier to do
than most people make it out to be.
I spend a very minimal amount
of my monthly income on housing.
By minimal, I'm talking way less
than 15% of my take-home pay.
I've seen stats out there saying
that the average housing costs
are roughly 30% of most people's income.
Knowing this it was extremely important for me
to find a way to lower this amount
by as much as I possibly could.
So I bought a house for a very modest amount.
To be honest with you
I think that most homes are money pits.
A lot of people look at their home as an investment,
and sometimes they are,
but to just assume that buying a home
will somehow generate you a return
is the wrong way to look at a home purchase.
My home isn't a complete dump at all.
I actually think it's a pretty nice house
for a cheap price that I paid
in the area that I'm in,
and plus none of the women that I ever dated
have felt unsafe in this area either.
So that's a win in my book.
Will I buy a more established home later down the line?
Possibly, but until then I'm banking all of the extra cash
that I would be paying for a nicer home,
and letting that money work in my favor for investments.
Another contributing factor to my high savings rate
when it comes to housing
is that I live extremely close to work.
Like five minutes, 10 minutes tops.
Not only does this save time
but it also saves money when it comes to gas
and the wear and tear in my car.
When it's nice out,
I'll even throw my tennis shoes on and walk to work.
I get that not everyone can do this,
but I bet that you could find a way
to make this work for your specific situation.
Unless you live in a high cost of living state
like California,
then I would just tell you to move somewhere else.
If you're interested in getting an idea
if you live in a high cost of living area,
then I found a website that you might wanna check out.
It is called bestplaces.net.
Head to that website and type in the city that you live in,
then click on the cost of living link to the side.
It'll rate your city based on the US average score of 100.
The sixth reason I'm able to save 70% of my income
is that I don't have a girlfriend,
so naturally there's more money in my pocket.
Don't get mad, I'm just kidding, kind of.
But I am very conscious when it comes to dating.
In the past the first couple of times
that I would meet a girl,
I would spend a lot of money taking them out to dinner,
the whole wine and dine thing
because that's just how I was raised.
But after a while I looked at
the amount of money that I would spend
and kind of threw up a little bit in my mouth,
not because I wasn't attracted to any of them
but because that money really really adds up
especially when you're a lifelong dater like I am.
I knew that I wasn't gonna stop dating
to keep my savings rate up.
That'd be a little bit ridiculous.
But I knew that something needed to change.
Now I have a rule when it comes to dating.
The first few times that I hang out with a woman,
I either take them out for coffee
or we do something that's fun for free or very low cost.
Not only does this save some money
until I decide if I really like this girl
and actually wanna spend more money on her,
but it also prevents any bad decisions
that may be made if I went out
drinking at a bar with a girl on the first date.
I know this might be strange to some of you out there
but I'm trying to avoid an illegitimate child
with a woman that I don't like.
I guess I'm weird like that.
The takeaway from this one
isn't to break up with your significant other,
but instead talk about your money goals
so you're both on the same page.
The next way I'm able to save
70% of my income is by fasting.
Now I know this isn't for everyone
and I'm not telling you to fast.
But getting on a diet where I only eat twice a day
or within a specific feeding window
has decreased how much money
that I spend on food every single month,
plus I like the other health benefits from it as well.
Don't worry I won't nerd out
on that kind of stuff in this video.
If fasting doesn't sound appealing to you,
then get on a different diet that you'll stick to.
The main reason this is gonna help you save money
is that it puts more structure around the things
that you're putting into your mouth,
and not in a gross way you freaks.
Get your mind out of the gutter please.
Instead of snacking all day like you're on a buffet,
you'll get a better handle on your food intake
which will have an impact on how much money
that you're spending on food every single month,
plus you'll start to feel a little bit better in general.
The eighth way that I'm able to save
70% of my income every single month
is by making my health a top priority.
A New York Times article cited a study
that exercising can save you
$2500 per year on medical costs.
This study looked at over 26,000 men and women.
It concluded that inactivity
caused the United States economy
almost 28 billion dollars in medical expenses
and lost productivity every single year.
That's exactly why you see many companies out there
that have fitness and health focus programs.
It saves both you and them more money in the long run.
Here's the three areas that I focus on
when it comes to my health.
Number one is my nutritional health,
the food that I eat.
It kinda goes along
with what I mentioned with fasting.
Next is with my physical health.
I built a garage gym that I work out in.
I do indoor workouts.
I'm also at my local park all the time running, hiking,
and doing some other things that are very
physically active out there.
Lastly I make my mental health a top priority as well.
You may be questioning how this saves money.
The way that I look at it
is that if my mental health is in order,
then I can be an even more happy
and productive human being in general.
I take care of this mental health
through daily meditation and writing.
The ninth way I'm able to save 70% of my income
is that I don't ever get a raise at work.
Okay I do get a regular raise from working my job
but I don't ever see that money in my monthly paycheck,
that's because every pay increase
that I've received over the past couple of years
has gone straight to investments.
So technically I never get a raise.
My over all wealth gets a raise.
If I get a $10,000 raise at work,
then I calculate how much of it
I'll actually be taking home,
then increase my investments by that amount.
Out of sight, out of mind
until I calculate my net worth every single month
and get a great big smile on my face
once I see that number start to grow.
Some people might look at this as me depriving myself
but it's not like that all.
I've been able to find the amount that I need to live on
that makes me comfortable and happy
so I make it a point to stick to that number.
The 10th way I'm able to save 70% of my income
is because I'm a bit of a minimalist.
But it's not like I don't own things
so minimalist isn't the best word for it.
I guess you could say
that I'm more of an intentionalist
if that's even a word.
I like spending money but only on the things
that really bring me value and happiness.
Minimalism has taught me to kind of take a step back
and question how much value something is going to give me
if I do end up bringing it into my life.
It's made me realize that buying more and more things
doesn't make me happy which in turn has saved me
from spending money on useless things
just to keep up with the Joneses whoever they are
which in turn has given me the ability
to save more to invest.
Last but not least,
I use credit cards which saves me
a pretty good amount of money every single year.
I know that Dave Ramsey tells you not to use credit cards
and I have a lot of respect for Dave
because he's an OG in the personal finance space.
I don't agree with everything he teaches
but I got respect for the guy.
But I've been able to be responsible
with my credit card use.
And if you're able to be responsible
when it comes to your credit cards
and pay the balance off every single month,
then you can reap the benefits of the rewards
from those credit cards.
As of today I make roughly $600 per year
from my credit card use.
That's more money I'm making
for basically buying things
that I would have already been buying.
I'll be doing more credit card hacking this year
so that $600 will most likely be turning
into things like rewards towards airfare
but it's still the same idea.
If you don't feel comfortable using a credit card,
then don't do it.
But if you feel like you're ready
and you can handle it,
then quit leaving money on the table
and go get a credit card
with really good rewards.
Don't forget to check out the description down below
for more playlists to help you out
with all of your personal finance needs.
Let me know in the comments down below
what you do to increase you savings rate
or what you would like to do.
I'd be willing to entertain more ideas
if you have any that I an use.
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I'll see you in the next one friends.
Adios!