Too many of us are subconsciously going through life throwing our money away
this doesn't sit well with us because we are advocates of people growing their wealth and
achieving financial freedom in this video we're going to break down five financial norms that
we broke in order to help you learn save and grow on your journey to financial independence
Hey guys it's Jerad and Amber with holy city family
for those of you that are new to our channel we began our fire journey nine years ago
we became millionaires at the age of 35 and retired at 38. we did all this on a $75,000
income and we did it with three young children our mission is to empower you to achieve financial
independence so that you can pursue your dreams and ambitions so some upcoming videos
that we've got for you guys are our ribbon stock analysis our 2021 year in review how
to invest like Warren Buffett and healthcare in early retirement so if you're interested in ways
to learn save and grow be sure to subscribe to our channel and follow us on Instagram
so you don't miss out on all those new videos on Sunday at 10 a.m. subscribe to our channel
as we mentioned we became millionaires at the age of 35 and a big part of that is because
the financial norms that we broke one of those financial norms we broke was not overspending on
dining out when we say dining out we're talking about eating out at restaurants ordering takeout
using services like Uber Eats and Doordash the average family spends three thousand dollars per
year dining out according to the bureau of labor statistics the average commercially prepared meal
costs about thirteen dollars the average meal prepared at home costs about four dollars for
groceries so that's a nine dollar savings per person per meal a thirteen dollar restaurant
meal is marked up about 325 percent so it's that much more expensive than the four dollar meal you
could have prepared at home so think about all the money that you could save and invest if you didn't
do this or if you scaled back on it jude and i have been gradually scaling our costs back on
this from around 600 a month when we first started budgeting yeah that's great to now kind of like
a max of 50 a month if you save that money and invested it in an s p 500 index fund like spy in
five years assuming a 10 annual return your investment would be worth 19 hundred and twenty
four dollars now in 15 years that investment would be worth over a hundred and four thousand dollars
a hundred and four thousand dollars I'm just trying to think through that just
like scaled back on eating out yeah that's amazing and in 30 years take a look at this guys it would
be worth over 560 thousand dollars like how crazy would that be i mean that's like a house
yeah this is a big reason why we're so such a big fan of doing budgets and budgeting your
money because it's so powerful but you have to really sit back and look at the
the numbers our dream was not to eat out at restaurants or order food whenever we wanted
but instead to build wealth for the long term we chose to cook meals at home and invest our money
think about it this way the more you save the faster you can achieve financial independence
retire early and enjoy life together a lot sooner another bonus is that home-cooked meals tend to be
more healthy than a typical restaurant meal the next financial norm that we broke is shopping
at trendy grocery stores and when we say trendy grocery stores we're talking about stores like
whole foods earth fare fresh market and many others the average U.S. household spends over
$4,643 per year according to the bureau of labor statistics
that means that the average monthly grocery bill is $387 dollars per month according to a study
done by Kiplinger in 2019 they found that Aldi was about 30 percent cheaper than whole foods here's a
great chart from grocery questions.com that shows how some basic products compare in price so as you
can see all these in the blue and whole foods is in the red and a few of these that really stick
out at us are the beverage look at the difference between Aldi and whole foods there bread dairy
frozen and personal care now with this norm think about the money you could save and invest if you
just shopped at a grocery store like Aldi instead and it's funny with Aldi when we first heard of it
i don't know how many years ago we were like oh you don't want to shop it all day like yeah that
i think at that point they had this thing where they would just take their produce out and it was
just straight out of a box and it wasn't refrigerated and now they've changed that process
i just i feel at ease when i go in there I'm not anxious i have no anxiety when i go in there
and there's you know this the overhead cost allows those prices to be lower so we've spent
a lot of time and effort reducing our cost on this one especially because it is such a big
annual cost and it is it's a recurring cost that you always have now think about if you saved 30
of your grocery bill or 116 a month and invested that into an s p 500 index fund like SPY
in five years assuming you'd have a 10 annual return your investment would be worth $9,147
in 15 years that investment would be worth over $48,000 wow and in 30 years that small investment
would be worth over $264,000 our dream was not to have an experience while buying our
groceries or have a wide selection our dream was to build wealth for the long term instead we chose
to shop at Aldi and have are groceries delivered by Instacart and then invest that money like amber
said it's amazing how Aldi has grown and changed throughout the years but one thing still remains
that they're strategic about not passing on cost to their customers and a little-known bonus about
using Instacart is that if your groceries aren't up to par then you can report that and you can
typically get a full refund on those items the next financial norm that we broke is that you
need to have a brand new vehicle we know so many people young old low income high income that
consistently decide to buy or lease new vehicles according to the latest data as of October 2021
from kelly blue book and cox automotive the average new car price is over 45 thousand dollars
a 2019 article published by AAA research agency showed that the average American owner is spending
approximately $9,282 dollars per year on their vehicle that equals a $773 a month payment
now check out this image from credit karma that shows how the average car payments of both new and
used vehicles are steadily rising so you can see in 2015 so what six years ago the price was around
480 a month for a new car and now it's around a hundred dollars more per month for a new car
and then the same with a used vehicle it was like $360 in that 2015 year and currently it seems like
it's about almost $400 dollars so it's you know increased $40 a month over the last 60 years yeah
and this chart was only as of q2 2020 and as we all know vehicle prices have just shot through
the roof since then what if you could go against the grain on this so think about the money again
that you could save and invest if you chose to purchase a used car instead of buying that
brand new one jared and i have spent a lot of time and effort trying to reduce our costs here
we especially try to do this again because it's such a large one-time expense or a large monthly
expense and we see those cars as an investment not just a car so let's take a look at this example
say you decided to buy the best-selling vehicle currently which is a Ford F-150
a 2017 model would cost around $36,000. and um a 2021 Ford F-150 would be around $55,000. so
that difference would be around a $19,000 difference that you would save so let's say
you take that $19,000 and you invested it into an index fund with an average return of 10 and in
this example it's a little different we're saying that you invested that full difference at full
$19,000 and you didn't make any contributions to it so in five years you would have around thirty
thousand dollars a little over thirty thousand and in fifteen years you would have over seventy nine
thousand and then in thirty years you would have over three hundred and thirty one thousand dollars
in your investment we've always been the type of people that value the reliability and features
of a car rather than how it looks on the outside or the brand name we choose the vehicles that are
three years old and with roughly $45,000 miles and we found that there's a sweet spot that you
want to be in where the depreciation has started to flatline and where you get the best value and
potential future value in that vehicle we also do extensive research to ensure that when you buy the
vehicle it has the best resale value reliability and safety features that a future owner would want
we even make sure that we purchase the best color for resale and according to Kelly Blue Book this
is something we researched on our last vehicle the best colors the top three colors are white
black and gray just for you in all categories yeah so this next financial norm that we broke
is buying a house that is too expensive for your income or overspending on a house according to
the U.S. bureau of labor statistics the biggest chunk of the average American's
paycheck and budget goes towards housing which accounts for about 37 percent of take-home pay
many people spend even more than that that's nine percent more than the recommended percentage of 28
and 13 more than what Dave Ramsey recommends at 25% so think about the money that you could save
and invest if you chose to buy just a smaller home that worked for your family and maybe it's not in
the perfect condition or the perfect location that you dreamed of but it works for your family at the
time and your plan and your budget now let's say you took that $300 and you invested it into an S&P
500 index fund like SPY and you saw a 10% return on that investment in five years
that would be worth $23,396 dollars and then in 15 years that would be worth over $124,000 and then
in 30 years that investment would be worth over $680,000 and that's just like $300 a month that
small amount similar to the other norms our dream was not to own the biggest most expensive house
but instead to build wealth for the long term we chose to buy a house that we can easily afford
and that meets our minimum must have requirements regardless of how long we plan to stay we're
always thinking about optimal resale value from day one we researched the we researched the real
estate market as well we look at comparable sales neighborhood amenities and historic appreciation
rates before we buy or build a house in the past we've used a tool a site called neighborhood scout
that's been really helpful really beneficial we'll probably do a video on that in the future
one tip we have is stay within your means don't buy a house just because the bank tells you you
can afford it only commit to monthly payments that you can actually fit in your overall budget so the
last financial norm that we're going to talk about today in this video is the one that debt is normal
the average American has 90 460 dollars in debt according to a 2021 CNBC report that includes
all type of consumer debt products from credit cards to personal loans mortgages and student debt
so this is a norm that we feel should be rejected and we should feel it should be rejected for at
least the high interest debt debt it's as normal as waking up and brushing your teeth
but just because it's normal doesn't mean that it's actually good for you right it robs you of
your present and it steals that the joy it steals so much from your future that keeps you stuck in
a cycle that makes it impossible to build the wealth that we're talking about and for us when
we first started our journey to financial freedom we chose to follow Dave Ramsey's snowball method
and that debt repayment method which includes or which excludes your mortgage sorry it focuses on
paying your smallest debt balances first while making minimum payments on all others our dream
was not to own a lot of nice things that we can't afford but instead to build wealth for the long
term when we consider taking on debt here's what we look at we make sure the interest rate
is low like around three percent um in the current environment that we can easily exceed in an index
fund like the spy that has an annual return of ten percent that way you stand to gain seven percent
now that we've reviewed these financial norms that we broke to become millionaires at 35 and retire
early at 38. we hope that this shows you some great opportunities where you can cut your costs
save money and invest the more you save the faster you can achieve financial independence
retire early and enjoy the life that you want with your family sooner thank you for watching
this video all the way to the end if you liked it give us a thumbs up and subscribe to our channel
join us as we learn save and grow together bye guys thanks guys.
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All of our videos are for informational purposes only and do not constitute financial advice
please do your own research consult a certified and trusted financial planner
who will put your interest above their own before following any advice we may offer
you