inquiring minds want to know, how much money should I have in savings?
Kris Krohn here with Limitless TV. I'm going to answer that and even going to talk
about how that target moves if you want to become financially free
So how much money should you put in savings? It's a really good question.
Frankly, it is a moving target and it depends on where you are. For example, if
you don't have anything in savings start with the dollar.
Right?
Because it means
that you've got something. One of the ways that you elevate yourself into a
higher financial status or greater financial security or greater peace of
mind is making sure that a part of your
budgeting technique is knowing how to take the money you have coming in and
that a part of it is paying you. Putting money in savings is a form of paying you.
Instead we sometimes mix up and like I got to put my money into my mortgage, I
got to pay my my car bill, I've got to pay my phone bill.
I get that those are important but if you are also not a bill that needs to be
paid, then you might not find money for you. We tend to have money where we set
it aside.
So if you are poor, broke, and starting out like I did before I became
wealthy and financially free then for me, savings was twenty dollars. It was thirty
dollars a month. it was a small amount. My first mentor gave me this goal, he said
Kris if you want to buy a home and and walk into 40, 50 thousand dollars of
equity then you need to get in the habit of saving money. And I had set a 14-month
goal to put five thousand dollars away in savings. Have you ever stopped to make
a goal for savings? Well now's a good time to start if you haven't and let me
share with you some principles, I call it a moving target but let's talk
specifically about how. When, when I have very little money my goal was to get to
the point where I had three months of savings of my living expenses there. So
if I was living off of $2,000 a month I had a goal of putting six thousand
dollars in savings. And yet when you achieve it, are you done?
No for me, it
continues to be a moving target. Your question of how much did you save for me
is how much did I save and how much should I invest?
Why? because my savings
is there when life does not go according to plan.
My investments are there when my
plan A fails. Plan B, my investments? they're going to take care of me.
So for me, when I do my budgeting, I'm setting money aside on both of those. You might
want to start with how can I take ten percent
my income and put it into investing? How can I take another 10% every month and
put it in savings until I meet a certain threshold?
I recently sat down with a
couple, they had put two hundred thousand dollars away in savings but they didn't
have investments. So it's time for them to figure out what is it that I need in
savings to have that peace of mind and feel comfortable and how do I allocate
for investing?
in this next segment I want to share with you specifically some
of my, some of the real numbers that I use that have been able to help me make
my first million dollars.
So let's talk about how much you put in savings
actually being leveraged as a concept of how you make a million dollars. So let's
say that here I've got my savings account
and over here I have my
investment account.
Now, both of these are really important to me and they are two
very different things. No matter how much money I'm making, let's say that I'm able
to save $500 a month in savings. And let's say that I'm also able to put $500
away for investing.
Well, over time, my savings is going to grow and over time
my investing is going to grow. Now watch what happens.
I could be putting all of
this money in savings but instead by having some of my savings reflected
investment, a time will come when I can purchase a house. Maybe I'm buying this
house with five or eight thousand dollars because I'm going to move into
it and that's $40,000 of equity.
This $40,000 of equity, how long would it take
me to save $40,000?
That would take many of us years but with investing I can
grow my savings faster. So now all of a sudden, I got this house. I let it season for
a year and then guess what I do?
Let's say I decide to sell it.
I get my
original downpayment, I get this equity and I decide to now use that and put it
into what?
Two houses.
These two houses, let's say are producing each at $300
cash flow every single month, well look at what my money is doing it's putting
six hundred dollars more every month. That's three hundred more for savings,
that's three hundred more for investments, that's pretty cool right?
Then guess what happens after a while? Over a 10-year period of time I'm gonna
liquidate these two homes I might use them now to buy,
Four homes that are producing $1200 a month. I can put more money in savings I
can put more money in my investments and generally within a ten year period of
time, if we start with a single home, the goal intention is to grow it into a
million dollars. So when you ask this question, how much should I put in
savings? I want to ask you to think of it just a little different. How much should
I put in savings?
How much should I put my investments? Because this is for my
rainy day fund and this is for my retirement. Get ahead, go somewhere with
my life fund and it's important for me to be saving in both of those ways.
Ha! bet you did not see that coming right? This whole idea of how much money should
I put in savings and all of a sudden, Kris talked of financial freedom. Yeah I
can't really help but it's just kind of a part of who I am. It's a part of who I
think. I think about our potential or possibility. And you know what? I want to
invite you come spend three days with me this next month at one of our three-day
limitless breakthrough events because I would love to meet you in person.
I'd love for you to come up and say hey I'm one of your youtubers and, and I'm
learning from you and here's some of the things that I've liked and I would like
to bestow some gifts upon you. Especially if you come out to one of my
events I'm always going to give you an autographed hard mount copy special
edition of any one of my books that I have there. Other than that, friends thank
you for being here. You know what we're going to do tomorrow? Shooting a new
video and this one is going to be on gratitude. And we live in a world today
where, I'm going to be honest, we kind of a spoiled brats. I've been around the world,
I've been some of the poorest places and I want to share with you some of the
things I learned about how to to step into some of the deepest gratitude no
matter where you are in life. So join me tomorrow.