look at all those bubbles that's how you
know it's good technique here welcome
back to another episode it is coffee
time now some of you guys may think I'm
pretty cheap if I live in a place like
this and I've got news for you I'm not
cheap maybe you're the one who thinks
you're rich you're just going around
spending tons of money you think you're
richer than me you're not maybe you just
don't know how to manage money let me
explain to you why I'm so cheap this
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my kickbacks the biggest mistake that I
see a lot of people making is that they
are assuming that the income that
they're receiving it's going to come in
every single day for the rest of their
lives it's not it's going to stop at
some point it's going to stop when you
get fired or when you just voluntarily
quit because you've had enough you don't
like your manager you don't like how
something's going at work
anything can happen maybe just simply
want to retire early and so that's the
first thing instead of thinking that
what each day you're getting 100 bucks
500 bucks a thousand bucks a day
whatever it is that you're making that's
not going to come in every single day
you need to average that across the
whole duration in which you're going to
be living up to say 80 years old maybe
90 years old if that's going to be your
lifespan and when you factor all that in
you're not making like 500 bucks a day
you're making like 50 bucks a day maybe
and that's really your actual budget the
other thing is that it's quite likely
that at some point you're going to need
this money right you might need it when
you're like say 60 years old you've just
had triple heart bypass surgery you've
spent a ton of money and then you need
to buy some food and you might be
thinking to yourself maybe even kicking
yourself for that Porsche that you
bought when you're in your twenties you
may be thinking man I wish I could just
save some of that money such that I can
actually buy some McDonald's today when
I'm like 60 years old instead what may
happen is you go around crawl
on the floor looking for rats or ants to
eat for that day I like to imagine when
I'm spending money that I'm spending it
from the end of the pile I picture
myself not when I have a bunch of money
in the bank and I'm healthy like I am
today but when times are tough when I'm
actually going to need that money when
I've spent most of it in the bank what
decisions will that be proud of if I had
made today and the thing is that most
people don't have enough money to last
them throughout their entire lifetime in
a decently sustainably good way they're
going to have to end up leeching off
their children maybe their friends and
so when think about who's really paying
for this porch that you get in your 20s
it's your children it's your friends is
the people who you're going to have to
go ask him for help later on that's
right
you're asking for other people to help
you buy that Porsche and unless you are
absolutely sure that you're not going to
need a single dime of help from anybody
throughout your entire life even when
you get out then I would think twice
before you go ahead and buy some
luxurious Porsche or something some car
some luxury that you don't really need
now the other portion of this has to do
with lifestyle and this has to do with
budgeting now I thought a lot about how
can I set up a budget how can I decide
how much I can spend suitably well and
well I can tell you one thing that if
you decide to just be cheap you get rid
of almost every single argument that
anybody is going to have about you if
you're cheap no one's complaining when
you go out and buy yourself some food
some water some toilet paper some basic
clothes that's all fine no one's got a
problem with that it's really going to
cause a fuss where you go out and you
decide to buy yourself to leave with hum
belts hey you only need one why did you
go buy two they don't understand your
spending habits your values of money
what's going on here maybe you guys can
help me out here but I've been thinking
a long time about how I can set up a
budget for example let's say we set up a
$500 budget me and my wife we have 500
bucks to spend every month whatever we
want my question is wouldn't people just
start splurging it on things that they
don't really need like it could
encourage poor values around money poor
ideas about how it should be used how it
should be saved and worse I think that
it can cause an imbalance in the way
that you use it for example let's
imagine that every month I decided to
blow my $500 budget on PlayStation 4 and
I already have 5 PlayStation
for sponges going to keep buying them
just because I'm going to become a
Playstation collector I'm just going to
have a bunch of these consoles sitting
in my living room and I don't really
need them I only need one but I'm just
going to collect a bunch of them and
then one day my TV breaks and the TV
well how good of a TV should it be at
this point due to my money habits maybe
I don't want to just settle for a basic
TV maybe I don't even want a standard 4k
OLED TV maybe I want an aka CH T TV just
because I'm used to be able to splurge
on entertainment like I normally do well
I'm saying is that there's an
inconsistency in people's spending
behavior right like how can it be that
on some things you decided to go all out
and then on other things that really
matter you don't really know how much
you should be spending you may even have
to go very cheap maybe just end up
getting a really standard used Oh TV
where that really counted you and this
could also happen if you were to go on a
vacation trip on the vacation trip there
could be a bunch of activities cool
restaurants to try where's the money
going to come from that if you've been
blowing your budget every single month
and so you may say well you're going to
just save your budget every single month
you're just going to save your money and
that's fine but what really ends up
happening is it just causes everybody to
kind of revert to living the cheapest
possible life that they can
being very basic about their spending
and then that $500 budget that everybody
got each month it's not really useful
anymore is it and so for me the way I
budget which may not be the best way by
the way is I don't have a fixed dollar
amount I just have a standard of living
that I maintain and their standard of
living the way I value money is pretty
basic pretty much on par with the way
anybody else spends money you know when
I was in my 20s and I was making some
pretty good money at that point I would
just go around parking in illegal areas
and if I had to pay like a forty dollar
parking fee I would just say fine
I got money I'll pay it and I would just
go around paying $40 parking fees I
don't do that anymore I don't waste
money like that because I think it
disrespects money it disrespects people
I'll go around collecting coupons I
don't pass up good deals either now why
is this important well it's important
when you're surrounded by other people
let's pretend that a friend buys you a
20 dollar dinner and let's say that this
friend was not very rich there were
maybe
pretty poor and they spent their
hard-earned money to buy your dinner
wouldn't it be silly if on the way to
that dinner I decided to just blow 40
bucks on parking fees because I felt
rich and then yet my friend had to spend
20 bucks up their hard-earned money to
get me dinner
I want a value that person the gifts
they give me their hard-earned money and
the only way for me to really do that is
to share the same value of money and to
appreciate that as much as they do if I
go around wasting a bunch of money on
parking fees blowing a bunch of money on
expensive luxury goods and then the next
moment I'm receiving a gift from
somebody who worked far harder than me
for something you know that just
wouldn't be consistent with my behavior
the best thing for me to do at that
point would be to refuse to give give it
back
in general I'd also know that when
you're alone when you're single it's
very easy to go around spending money
you know you can go around buy yourself
a $5,000 watch and you're fine you're
all good with that but the funny thing
is when you're with a family should then
everybody else also get a $5,000 watch
if I could get one then everybody should
get one
you know maybe my wife should get one my
kid should get one even my dog should
get a $5,000 watch why not
why am I better than everybody else why
should I deserve it more than somebody
else right I don't really want to be in
the position where I'm elevating myself
above anybody else and so what's really
going to happen is for every dime that
you waste it's going to be multiplied by
the number of people in your life at
that point it becomes a lot of money
that becomes wasted unless I just want
to be selfish about it and I'll be the
only one who gets to waste money nobody
else can do it nobody else would be
approved for that only I'm approved to
waste money on luxury items one final
point that I might make here is that
spending money generally does not equate
to bringing happiness a certain point is
good to have some comfort in your life
some security some freedom but after
that it's not like buying things really
makes you all that happy sometimes I
think about well if I were to buy this
Porsche it would be so much trouble for
me I would have to worry about
maintaining it I would worry about every
little scratch I'd have to keep checking
it I want to protect this resale value
it would be a burden on my shoulders I'm
the type of person who would like to
protect the resale value if there's
value in something I'm going to try and
protect that to maintain it and make
sure that I can resell it at the future
point
and at least recoup some of my costs
that's just good practices that's
consistent with the type of behavior
that I like to have materialism will
make you a slave you don't own the
things you buy the things you buy on you
that's not all bad news there are
certain areas where I really enjoy
spending money and that's with
experiences with people when you're with
people everybody gets to enjoy an
experience that luxury is shared among
everybody everyone can have a fun time
there's no jealousy there's no arguments
there's no unfairness there's no
selfishness and usually when you look
back on the time like that you don't
regret it either a good time had by all
a good memory something that people can
remember generally it's going to be
worthwhile usually in that scenario it's
not so much money that's the cost it's
going to be everyone's time their
availability their willingness to do
something all together getting everybody
together that's going to be the primary
issue as stake and I would say that over
time this is about raising everybody
standard of living together such that
everyone can together rise up this long
term process over time you may get to
the point where you can say well yeah we
can afford this vacuum cleaner seems
good everyone in our life is doing ok
this is a purchase that we're not going
to really regret it's useful it's going
to save us a lot of time
grab that vacuum cleaner it's a little
bit of a luxury but some purchase that
you're sure you won't regret so as
you're going through just make sure that
every purchase you make you're sure
you're not going to regret it who knows
you're always going to one that keep the
option of early retirement open to
yourself right it's going to be sad when
one day maybe you find you have some
serious health condition you don't have
much time left you're gonna want to
retire early such that you can enjoy the
time you have left and yet you find that
you have bought a Porsche early on in
your life in your 20s and now you have
to work another extra year or two just
to make that money back and you just
don't have enough money at the time the
luxury to afford for that time that you
could have had anyway please feel free
to share your comments below let me know
what you think if you liked the video
give a like and subscribe I'll see you
next time bye