7 uncommon ways to save money in 2020
Intro
As of 2020, warren buffet is worth 73.2 billion dollars.
And he ranks number 4 on the Forbes richest people in the world.
But did you know that when he was 50 years old, he wasn't even a billionaire?
He made his first million when he was 30 years old.
And only at the age of 56, he crossed the billion-dollar mark.
Then how did he end up on the top of the wealthiest people in the world?
The answer is simple.
He made most of his income after turning 60.
So, if you are a 20 or 30-year-old adult who thinks it's too late for him to be financially
independent, then stick around because in this video we will explore the strategy that
warren buffet used to crush the Forbes billionaire list?
How is that related to saving money? and you can apply that too!
Learn to delay gratification
In one of the previews videos, we discussed how the cycle of poverty keeps poor people
poor.
When you grow up in a low-income family.
Daily life holds fewer guarantees, there might be good food today and might not be tomorrow.
If there is an ice-cream in the fridge today, you better eat it now because you never know
when your parents will get you another ice-cream.
And even if they promise to get more next week, you can't trust them since they have
broken such promises before due to financial necessities.
So, you grow up preferring immediate small rewards instead of waiting for bigger rewards.
When its a payday, instead of putting aside
20 or 30 of your income into your savings account, you spend it on you new clothes,
restaurants or start going out with your friends more often.
You will feel good in the short run, but you will never save enough to achieve that
financial freedom and will be working 9-5 till the end of your life.
The first step to saving money is to learn
to delay gratification.
And that's what made Warren Buffett so rich.
Even though he crossed the million-dollar mark when he was 30, he didn't buy a brand
new car, start going to expensive vacations, but kept living frugally while investing everything
else.
And with the power of compounding, his net worth skyrocketed over time.
That doesn't mean you should live frugally
for the rest of your life.
But if you want to save enough money to achieve financial freedom.
Maybe you should be saving 20 percent of your income so that you build up a big enough investing
portfolio that will provide with enough passive income.
2.
Leave to a different city
When you are a teenager or even an adult, city life is all that you wish.
You meet different people, visit different places, and everything is moving fast.
While you are still young, you should be enjoying your life.
Right?
The problem with that is, life in the downtown became so expensive that you will barely make
ends meet even if you are earning twice the amount.
Rent alone will probably eat up half of your paycheck, if not more.
So one of the best ways to cut your expenses and save a ton of money is to move to the
countryside or move to a different city that is more affordable.
For some, its impossible since you have to be in the office every day, but right now,
we are presented by a fantastic opportunity, if you can do your job online, your boss will
be more than happy to let you do that.
Of course, you might be a weightier or salesman and you might not be able to do that.
but, as the world is trying to immediately digitalizes, now is your opportunity to do
something online.
Just imagine cutting your expenses by half and investing that amount.
3.
Set your savings goals clearly
Preventing yourself from the pleasures you can afford is not easy, especially if your
savings are already in dozens of thousands of dollars, if not hundreds.
The problem with most people is that they don't have a clear vision of why do they want
to save money.
Do you want to become a millionaire?
Do you want to be financially independent?
Do you want to save enough for your retirement?
Not everyone wants to live super frugally their entire lives just to be on top of the
Forbes list when they are 90.
let's say you want to retire on an island in southeast Asia.
You can do that with as little as 12k dollars of passive income annually.
So, before you implement any of the things
we are discussing in this video, spend a few hours thinking about what exactly you want
to save for.
And base on that goal, decide how much you need to save and within what time frame and
then implement the tips we are discussing.
4.
Control your cashflow
It's weird how some people want to save money but don't have any clue about their spending
habits.
Here is how most people budget, this is how much I make a month; one-third or half of
it goes to my landlord (rent), and the rest, I will spend it gradually over time.
But then at the end one the month you are going to wonder, how on earth did I spend
my entire paycheck.
There are many ways you can save a ton of money, by having a clear understanding of
where exactly your money is going to.
You don't have to dime and nickel with it, but at least have a general understanding.
Set a specific budget for food, transport, and other things and revisit it at the end
of the month or each week if you are following the plan.
And if you are not, then you have to cut your spendings maybe.
5.
Car is not an asset A car is the most inefficient method of
transport because it spends 96 percent of its time parked doing nothing.
Even if you move around a lot, you will use your car maybe 10 or 20 percent, at best.
But regardless of how often you drive, you still have to pay insurance, every now and
then you have to change something, maybe the ties because its summer.
There are just so many expenses that come with a car that you don't think of when you
get a one, such as paying for parking.
At first glance, it seems like having a car is cost-effective, but when you do the math,
it is not.
And if you own a car, you probably agree with me.
And its not only about the money, the time that it consumes to take care of is another
headache.
Of course, if you live in the countryside where you have kids that you have to drive
to school.
In that case, maybe owning a car is the right option.
But in most cases, its a hole in your wallet.
6.
Wait another day to make a major purchase Whenever we want to buy something expensive,
we start convincing ourselves by telling ourselves different reasons why this is a wise purchase.
Your car is perfectly fine, but it's not up to date.
You can lease a new BMW, but you don't have to, so you start telling yourself how this
new BMW will make your life better.
Your friends are going to admire you.
You will draw more attention and so on.
But then when you buy that BMW, you get that dopamine spike and realize that you didn't
have to.
To avoid that dopamine trap, I have figure out a way.
Before buying expensive, just wait another day or two, be it a smartphone, a car, or
a computer.
If, after a few days, you still think its a necessary purchase, maybe you should get
it.
7.
Cook at home
Since the beginning of the pandemic, I stopped eating outside as I use to often and tried
to cook at home.
And believe me, I have saved a fortune.
You can cook incredibly delicious meals at home for a fraction of the cost.
Cooking at home isn't always fun, but the moment you learn it and practice for a while,
it gets super easy where you can prepare delicious meals faster than it can be delivered to you.
Probably one of the best benefits of this pandemic is that I learned that I could save
a fortune by cooking at home.
Outro
In conclusion, I want you to keep in mind that money is a resource that should help
us to improve the quality of ourselves.
There is no point in having a ton of money in your bank account when you are miserable.
Remember, there is only so much you can save.
At some point, you can't go further since you have to pay for rent and put food on the
table.
So the ideal strategy would be is to focus more on maximizing your income since there
are no limits to how you can earn.
And now it's your turn to tell me your favorite way of saving money.
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Thanks for watching and until next time