Hi guys, it's Mark.
So it's true,
saving money is costing you a fortune.
Now that might sound like a pretty big statement to make,
however, times are changing
and people that are saving their money will,
and I really hate to say this,
they're just gonna be left behind.
Think of your savings account
a bit like this bucket
and your money like this water.
The more money you pump into the bucket,
of course it starts to fill up,
but as you can see,
it's not very effective
because it's getting drained by all the holes.
Maybe it wasn't the best idea
to film this part in my studio.
So today we're going to be discussing
what all these holes actually are
and how you can start plugging them in your life
so that you can actually start getting ahead
in building your wealth.
So if you're ready to dive into the truth about saving,
then smash that like button for the YouTube
and subscribe for more videos about making money.
Would you like to live in a world where
all your choices were influenced
by someone behind the scenes,
secretly pulling at the strings
and conducting your life
like some kind of orchestra.
This has given me a huge low-key vibes,
but 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,
but schools just don't teach this stuff.
Saving money gives people
the illusion of control.
Meanwhile, banks are making the big profits
right under our noses.
Let me explain.
In the past, you are 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 blocks of gold
in order to buy goods and services.
So therefore, money was created.
This was called the gold standard,
but it was stopped in 1933
and the US dollar like most other currencies
became what we call fiat.
This means your dollar now holds value
because the government set it to us,
which gives them much more control
over the economy as they
as they can decide the rate at which it's printed.
So it turns out that the money
that 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 all of this money
for you in return for a measly 0.5% interest rate,
all while they using it
to generate huge profits.
It's no secret that banking
is one of the wealthiest sectors.
However, it wasn't always that 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 hungry
for new ways to use our hard earned money
to boost their income.
A good example of this
is the setting of subprime mortgages,
which is one of the reasons
for the 2008 financial crisis,
which left us, the taxpayers
having to bail out the banks.
Just to clarify,
I'm not saying that the banks are completely evil,
they just act in their own self interest
like most businesses,
and we can't blindly trust them to have our backs.
Many millionaires, such as Robert Kiyosaki,
who is the author of "Rich Dad Poor Dad",
very keen on saving
what they call God's money,
which is golden silver.
They call it this
because it has real value rather than
the promise value of the paper dollar.
In my opinion,
this is a good strategy for the rich,
as it offers a great way to protect your wealth.
However, your trade in potential growth for security,
which isn't right for everyone,
especially if you're young,
when you can afford a little bit more risk.
I still feel like I'm a spring chicken in my 20s,
so I don't hold much gold at all.
I'm far more interested
in the emerging cryptocurrency markets
without going too far in depth,
the banks heavily disliked crypto.
It challenges everything that they stand for,
threatens their position in society.
As most cryptocurrency is decentralized,
it gives the power back to the people.
And I personally liked the sound of that.
That's one of the reasons
why I've invested 5% of my portfolio
into Bitcoin and Ethereum.
And I might even be looking
to expand that even more.
Although the banks do make it really hard
for me to invest in crypto
and they've even closed one of my bank accounts.
Talking to crypto currencies,
if you wanna pick up
$10 worth of free Bitcoin from Coinbase,
and just check out the link in the description.
For this next point, imagine you have,
let's say $10,000 in your bank account,
earning you 0.5% interest per year,
which is well over the average rate at the moment.
If you froze yourself for 1,000 years
in one of those cryogenic chambers,
then when you emerge
and check your bank account,
you would have nearly $1.5 million.
Isn't that amazing?
Well, actually, no, it's pretty terrible.
As even though it's hard
all that time to build up,
the value will be less than the 10,000
you had in the first place.
If we assume an inflation rate
of at least 2% per year,
which is a healthy inflation rate for an economy
now, obviously this is a pretend scenario.
However, the point reminds the same
by leaving your money
just sitting in a bank account
is 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.
All my life, i'm starting to sound
a lot more like my granddad because with a dollar,
I could buy a movie theater ticket,
and a bag of fries,
now it won't even buy me
a tango ice blast slushy,
for real, those things are really expensive.
In recent times, this has been getting worse
as inflation has been reported
at 5.4% in the USA,
which is of course just devaluing your money even more.
But Mark, why does this happen,
or why can't we just stop it?
Well, before I answer that,
can I just say you're looking good
and I'm loving the new wig.
Thank you, I appreciate that.
But back to your question,
the first factor is called demand pull inflation.
A good example of this
is the recent car shortage.
This caused a higher demand for used cars,
which drove the price up.
The second factor is cost push inflation.
I'm very familiar with this
as I'm currently building out my north wing
and building materials,
as well as wages are going quite literally
through the roof.
The lumber price actually spiked 400% in early 2021,
which is absolutely crazy.
And then this is just pushed on to the customer,
therefore making houses more expensive
resulting in, you've guessed it more inflation.
The third factor that everyone always talks about
is the increased money supply,
this causes inflation.
When the money supply increases faster
than the rate of product production.
Put simply there is just too much money
and not enough products.
And shockingly, due to the stimulus checks
that were pumped into the economy,
40% of the US dollars in existence
were printed in the last 12 months.
This means that we're heading into uncertain times.
So it's more important than ever
to invest wisely in order to beat inflation.
The markets will historically give you
an average yearly return of eight to 10%,
which would be a good option for most people.
It's extremely simple,
logging on into an investing app
and buying a low-cost index fund like the S&P 500,
and then just holding it long term.
A great app to use if you're in the USA is public.com
and they're also currently giving you a free stock
where all the way up to $1,000
with the link in the description.
If you're in the UK,
I personally like using Freetrade
and they're also giving you away a free stock
worth all the way up to 200 pounds,
with the link below.
Investing in real estate can also be a great option
if you have enough money.
This is because you can take advantage of leverage.
When you start doing this,
you're actually using the banks to your advantage.
By taking out a mortgage,
low interest rates and inflation
become your best friend
as it makes it a lot easier and easier
to pay off each year.
Whereas if you're saving money,
the inflation is eating away at it
and not the money you owe.
We live in a consumer society
that has psychologically programmed us
to behave in a certain way.
You've been lied to all your life
by your parents, friends, and teachers
leading you to be tricked into doing things
that you actually don't want to do,
on many more occasions than you probably realize.
So I'll give you the same choice
that 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 see how deep this rabbit hole goes.
Have your pick well as I have no way of knowing
which pill you pick,
I'm gonna assume you wanna know the truth.
One study suggests that 90% of teens
reported having experienced peer pressure
while 28% reported that their social status
was boosted after they gave into peer pressure.
This is pressure to buy the next shiny object
like designer clothes and luxury vacations
when you really can't afford it.
Many people save up just enough money
to spend it on one of these items
and find themselves back in the same position again,
saving for the next shiny thing.
One of the big reasons for this is
money is so easily accessible
in a normal savings account,
and that is very hard to resist.
Just to prove this point
more than half of Americans
have less than three months worth
of expenses covered in an emergency fund.
According to bank rates,
July, 2021 emergency savings survey.
Once you start seeing money differently
and as a tool to grow your wealth,
rather than just something
you use to buy things with,
you will have everything that you ever want.
Eventually owning enough cashflow investments
is like having a second paycheck every month
and who wouldn't like that?
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 to take a spontaneous trip to the Caribbean.
There are a few great books that you can read
that will really help you get into this mindset.
I just happen to have a couple of them on my desk.
First of all, I'll suggest picking up
"Rich Dad, Poor Dad"
and then "Think and Grow Rich".
Many people see saving lots of money
as a safety net.
I've even heard of some people saying that
they like looking at the number on the screen,
but what they don't realize
is the opportunity cost.
How many times have you been sat sitting on the sideline,
watching other people making money thinking,
when's it going to be my turn?
Just think of all the people
that left their money in their savings account
during the last couple of years,
because they were just scared to take a risk.
The scary thing is,
that the biggest risk often turns out to be
not taking one or two,
as I ended up missing out on some crazy
crypto and stock market profits.
Currently many people say Tesla stock is overvalued
and due to this,
they deemed the stock untouchable
and they're waiting for the price to drop
before they start investing.
But things can change really quickly.
Between August and October, 2021,
Tesla stock jumped from $700 to nearly $900.
So the cost of wait in here was 35%.
But Mark I don't have that sort of money just lying around.
Who do you think I am?
Elon Musk.
Well, you didn't need to buy a full stock for $700.
You could have just invested
as much as you would flight
and bought a fraction of a share.
So if you had invested $100,
you would now have made $35.
And with that, you could have bought yourself
a tango ice blast slushy.
On top of this
the average saving account interest rate is only 0.06%.
There is no opportunity here,
the banks take your money
and invest and loan out
at far greater rates than this.
Money is for emergencies, enjoyment, and investing,
and therefore, you don't need everything on hand 24/7.
Now I'm not gonna pretend that I don't save money
because of course I do.
In fact, to tell 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've worked back in my day,
but now things are changing and we need to adapt.
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,
it is 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 100% of the shots
that 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 wanna grow your wealth
and don't forget to pick up your free stocks
and Bitcoins in the links below.
Okay, I'll see you over there.