- Once per year,
I run the numbers to see what my savings rate is.
I've been doing it for the past four years
and every year it's gone up.
But I did not think that it would jump this much
in one year.
It went from 70% last year to 83% this year.
And if things go as planned, then by the end of this year,
it'll actually be higher than 83%,
but I'll fill you in on how that's possible
later in the video.
Some things I've done differently
and others I've kind of kept the same.
So in this video,
I'm gonna go through a few of the many ways
that I'm able to save and invest at least 83% of my income.
My goal with this video is to give you ideas
to take away and implement into your own life
to help you achieve this type of savings rate.
Not everything is gonna apply to you,
but if you were able to use at least a few of these things,
then I guarantee that you'll be able to achieve
at least a 50% savings rate.
Hey, I'm Jarrad with an A.
On this channel, we talk about all things personal finance,
investing, and financial independence.
The 83% is based on post tax dollars
because it doesn't make sense for me to count money
that the government is gonna take anyways
so that they can of course waste it like they always do.
Another thing, I don't really reveal exactly how much I make
because A, I have coworkers that watch my videos,
so I'm trying to avoid those awkward interactions
and B, I prefer to not paint a target on my back
if I don't have to.
So let's just pretend that I'm a pretty poor person,
but I know that you will not be satisfied with that answer.
So I'll give you a little peek behind the curtain
without revealing the whole number
and tell you that I save and invest
at least $40,000 per year,
but let's still pretend like I'm a poor person, okay?
I should also mention that I am not married,
so I don't have a wife to help increase my income
and also increase my expenses as well.
Cue the comments saying,
"If you had a significant other like me,
"then there's no way that you'd be able
"to save this much of your income,
"he or she would spend so much money."
See, I beat you to it, even though it's probably not true.
I'm just gonna get this one out of the way first
so that people who want to judge me
can go ahead and get it over with and leave.
I don't have children,
which is one of the reasons that my savings rate is so high.
From time to time,
I do enjoy scrolling through the subreddit Childfree
because it's kind of entertaining.
But that doesn't mean that I completely dislike kids
or are turned off to having them
at any point in time in the future.
I do want to own the fact that this does play a small part
in why there's more money in my pocket
at this point in time.
But even if I had them,
I'd still find ways to lower the cost
of having a few little monsters running around.
If you asked me five years ago,
then I'd probably say that there is no way
parents can save very much money
if they have the added cost of food, shelter,
and clothing for their offspring.
But since then, I have met a ton of parents
who have children and are still able to save
and invest a ton of money.
So this seems to me to be more of a limiting belief
than anything.
Moral of the story is that if you have kids,
then find ways to cut back on your spending with them.
And if you don't yet,
then don't have them until you can actually afford them.
As my grandpa always said to me when I was a little boy,
"Jarrad, you can't unpoop your pants."
My housing situation is extremely affordable.
To be honest, my house is probably bigger
than I actually need.
But there's a reason for that
which we'll talk about in just a minute.
In a different life, I'd probably live in a tiny home,
one of those makeshift container homes,
or even trek across the country,
living in a van with my dog Molly.
But I also want to be a Harlem Globetrotter
that gets paid in candy,
but we can't always get what we want.
My manager would probably fire me on the spot
for asking him to pay me in sour candy.
My mortgage payment is less than 10%,
so I could technically afford a mortgage
that's triple what I pay now
and still live pretty comfortably.
But I've chosen to remove myself from the marketing scam
that these big mortgage companies are running.
Think about it,
the only person that profits from selling you
the American dream of owning a home are mortgage companies.
Check out this insanity.
Quicken Loans mentioned the 28% rule
when you're purchasing a home.
They suggest that the most you should spend
on a monthly mortgage payment,
not including taxes and insurance
is 28% of your gross income.
Yes, I said gross, which makes me want to throw up.
If we add in taxes and insurance,
then that number can easily jump to 35%
of your gross freaking income.
Are they insane?
Yes they are, but no they're not,
because they're in the business
of getting you to take out
as big of a mortgage as possible
because that lines their pocket even more.
Homes are absolute money pits
and in most cases, shouldn't be looked at as an investment
because they're technically not.
Unless you run the numbers beforehand
and plan on flipping it for a profit
or eventually renting it out for a profit,
then it's not an investment.
You're being scammed if someone tries to tell you that,
so you should run away from those people extremely quickly
if they tell you this.
I'm not completely knocking home ownership at all,
because there's a time and a place for it.
But what I am knocking is buying a home above your means
because you've been sold the lie that it's an investment.
What's considered to be above your means
is completely up to you.
But if your mortgage payment would stress you out
if you lost 25% of your income tomorrow, then it's too high.
Housing is where most people get it wrong.
But the good news is that it's pretty easy
to fix that problem.
I have multiple streams of income
that goes towards that 83% savings rate.
I'd be lying if I said that making more money
doesn't help with increasing your savings
and investing rate, because it does.
Keep in mind that even though someone makes more money
doesn't mean that they don't waste a ton of it.
So multiple streams of income doesn't really matter
if you're not keeping any of it.
More about that in a minute though, so hang on.
I've always had two jobs my whole life.
So this has been something that seemed normal to me
for as long as I can remember.
At the peak of things, I had three jobs,
technically four, if you count the YouTube channel
that I created on a topic that has nothing to do with money.
I was a freaking psycho back then.
I mean, I still kind of am, but just in a different way.
It was normal for me to work 80-hour weeks
and then pass out randomly
in the middle of doing all kinds of things.
Now, luckily I was living with my sisters
at that point in time
so they were able to actually document a lot of those events
of me passing out in random positions in random places.
A salaried income was something that I always had.
Then during my off hours,
I had various jobs and side hustles
where my income was directly tied to my performance.
At this point in time, I have two main streams of income
and I'm actually about to add a third
because work is kind of fun to me.
So why not?
I work in corporate America,
I have this YouTube channel
that you're watching me on right now,
and I'm also in the process of launching
a second YouTube channel as well.
If I can get the second channel profitable
by the end of the year, which I know that I can
and will probably happen within a couple of months,
then my savings rate will actually increase above 83%.
If you haven't done it already,
please do me a huge favor and Hulk smash
that thumbs up button.
I do plan on adding two more streams of income
over the next couple of years.
The first is through investing in real estate
once I find a property.
Now, the home that I'm living in right now
will be turned into a rental property when I move out
and into my next property
which I'll also turn into a rental property
at some point in time in the future.
Every couple of years,
I'm gonna be moving from house to house,
leaving behind a physical asset
that's earning me more and more money.
I plan on doing this for as long as I possibly can
or until my future wife gets super annoyed to me
and forces me to stop doing this
and then I'll probably try to push it further
a little bit more until she forces me again
to stop doing this.
Like I said before, homes are a freaking money pit.
So instead of allowing my residents to hold back my wealth,
I'm gonna use it to my advantage.
One day I'll move into a long-term home,
but that day isn't gonna be any time soon.
If you can start getting into the mindset
of thinking about how you can build more
and more streams of income,
then your savings rate will skyrocket
and your wealth will come along for the ride.
Not to mention, if you only have one income or two,
if you count your significant other's,
then you're playing a pretty risky game right now.
All it takes is for one person to get laid off
or both of you and you are screwed beyond belief.
If you're still not convinced
about the value of adding additional streams of income,
then let me give you an idea of how valuable
a second source can be.
In two months, I earned over $40,000
from just my YouTube-related income stream.
And actually I expect it to be much higher later this year
and definitely much higher by this time next year.
The internet is your friend,
go do something on it that you enjoy
and happen to get paid for in the process.
Making my health a top priority has been a big reason
that I've been able to increase my savings rate to 83%.
I think this one is one of the most overlooked areas
because the impact that it has isn't so obvious.
The three areas that I focus on are nutrition,
physical and mental health.
I'd like to call it the trifecta
because when all three are locked in,
you are absolutely unstoppable.
Having the energy, mental clarity and confidence,
all help you make better money choices,
which in turn increases your savings and investing rate.
Let me break it down for you real quick.
In the nutrition area,
I mainly do this by fasting
and paying attention to the actual food
that I'm putting into my mouth.
As much as I love donuts and salt and vinegar chips,
I have to say no to those things more often than I say yes.
And to be honest with you, I am a fat kid at heart,
so I've gotta be very, very careful
with the food that I allow myself to eat.
When it comes to physical health,
I work out on a regular basis.
I actually built a garage gym years ago
that I use five to six times per week.
Now, if you follow me on Instagram,
then you'll know that that is my favorite spot
to publish stories before, during, and even after workouts.
Every now and again,
I share the workouts that I did for the day,
but it's not a guarantee,
so don't expect it if you follow me,
I'm aware that not everyone can afford to build a garage gym
because it can truly get pretty expensive,
but spending money at a gym
is an investment in and of itself if you think about it.
And even doing body weight workouts
or run around your house are a great way
to stay physically healthy.
If I'm being completely honest,
I cheated a little bit with the garage gym that I built.
One of my past side hustles was as a fitness trainer,
so technically all of my clients
paid for all of the equipment that I have.
The outdoors is another part of my physical health,
which is also free.
I take at least two hikes or trail runs per week
in the woods with my dog Molly.
It's honestly probably my favorite way
to kind of disconnect from technology
and keep my physical health in shape as well.
Mental health is one that not many people
in the personal finance and investing space talk about,
but for me, it's been a game changer.
I've had to keep a very good close eye on this within myself
because if I'm not careful,
I can see how it can easily get out of control
and send everything else in a downward spiral.
To be very open, I've had a lot of traumatic experiences
happen in my life from my mom being diagnosed
and having to live with an incurable genetic disease
to losing my little brother at the age of 19
from an overdose,
to my brother in law taking his own life
earlier this year due to depression.
I'm getting goosebumps talking about that.
For me to pretend like these things don't affect me,
whether I realize it or not,
would be a pretty naive way to think.
Some things that I do to keep in check are meditation,
I prefer the Waking Up app by Sam Harris.
I do a lot of writing, a lot of thinking,
I read a lot of philosophy
and I do some other things
that I can't mention on this channel,
but they're absolute game changers
and I wish I could talk about it, but I can't.
Maybe in the future when they become
more of an accepted means of therapy, then I'll share it.
But for now I can't.
I've already gone through the process
of paying off $82,000 in bad debt.
And I refuse to do it ever again.
Because of that, I don't take on debt,
which means that I have way more money in my pocket
that goes towards my savings and investing rate.
Not carrying bad debt has afforded me a level of freedom
that no one can even imagine
unless you're in that position.
It also gives me a sense of safety as well.
I could technically go work at my local Dunkin' Donuts
and afford my current lifestyle
because I've removed my bad debt
and have my expenses in check
so that I don't spend more money than I have.
Because spending money that you don't have
is an extremely dumb thing to do if you think about it.
And the only reason that I know it's stupid
is because I've been there, done that,
and I made it out on the other side.
It's really not worth the time or energy.
Instead of borrowing from your future self
by taking on debt,
you should decide to start forcing the you of today
to pay for things that you want.
Think about it though,
when we take on debt today,
we're basically throwing our future selves under the bus.
It's kind of a selfish thing to do,
especially because we don't know
what kind of financial position
that future person is gonna be in.
What we do know though,
is that whatever financial situation they're in,
the us of today are gonna make it even worse
by borrowing money from them.
And on top of that,
making them pay even more through interest.
Don't treat your future self like crap
by taking on stupid debt, because it's not fair to them.
I have seen so many people who look rich on the surface
because of their income,
but they're not wealthy at all
because they mindlessly spend it all.
I've even seen this in myself as my income has grown.
So I've had to be careful.
The paychecks start to get a little bit bigger
and a little bit bigger,
so of course you ease up on worrying
about how much is being spent in different areas.
The next thing you know, you look at what you have
to show for the money that you spend
and there's nothing to be proud of.
Talk about an extremely awful feeling.
It's important not to spend money that you do not have,
or have earmarked for saving and investing.
All that money needs to be off limits
so keep your grubby little fingers off of it.
Taking out a car loan is one of the easiest ways
to convince ourselves that it's okay
to continually carry debt.
Dude, if I don't have a car, then I can't work.
And if I can't work, then I can't afford anything,
so I need a car.
Agreed, but how much car do you actually need?
For the longest time,
I bought into the thought of never being able
to afford a car without taking out a loan for it.
In my eyes, there was no way anyone had $20,000 in cash
to dish out on a new car.
In reality, I was kind of right
since the only way most people can afford
those types of vehicles is by taking out a loan.
You really have to change your thinking here.
If you have $5,000 to put towards a car purchase,
then you have enough money to buy a $5,000 car,
not enough to put 5,000 down on a car loan.
Poor people say, I have $5,000 to put towards a $20,000 car.
Wealthy people say,
I have $5,000 to put towards a $5,000 car.
Super wealthy people say,
I have $5,000 to put towards a car.
I'll buy a $2,000 car, then invest $3,000
so I can pay for my next car
with the gains from that investment.
And extremely wealthy people say,
I'll just buy the whole darn dealership.
I've set myself up to where I'm using
the super wealthy strategy.
I purchased a car last year with cash
and used the rest of my car money leftover
to invest for my next car.
At this point, I'm less than a year in and the car fund,
which I won't actually need for another six plus years,
is up to a balance of over $5,600.
It continues to grow
since every month I pretend that I still have a car payment,
but instead of giving that money
to a car loan company every month, I invest it instead.
Spend less in your car,
even though you might be able to afford more.
People don't judge you based on your car,
and if they do, you shouldn't be friends with them anyways,
and you shouldn't care about what they think.
Watch these videos to your left next
that I picked specifically for you.
Please make sure to Hulk smash
that thumbs up button as well,
and check out the description for more resources
and playlists to help y'all
with all of your personal finance and investing needs.
I'll see you in the next one, friends, adios.