Hey, everyone. Welcome back to another video.
In today's video,
I'm going to give you guys a no-nonsense,
straight-to-the-point video on how to get rich.
Now, the reason I wanted to make this video
is because I recently learned
that 59% of American households
are living paycheck to paycheck.
If you look down a street in any neighborhood in America,
that would be six out of every 10 homes
is living paycheck to paycheck.
That has got to be extremely uncomfortable,
and I feel like I have a lot to offer in this department.
So I wanted to put this video together
to offer my tips and practical pieces of advice
that can help you to stay out of this 59%
and get you on track to becoming rich.
Now, just before we jump into this video,
this video is going to be broken up into six chapters,
and I've ordered them in order of importance.
So without further ado,
let's go ahead and get right into this video.
So the first chapter is by far the most important.
This is focusing on making more money
rather than saving money.
Now, throughout my journey
of achieving financial independence,
a lot of the times, I have heard that you are supposed
to save as much money as possible.
And although that does make sense,
the only issue with this is if you're focusing on saving,
you can become rich,
but it's going to take you literally decades to do so.
I chose to focus on making more money,
and this helped me a ton.
In fact, it took me three years
to make my first million dollars
when focusing on making more money instead of saving.
For me, personally, having a job with steady income
and creating side hustles on the side
allowed me to kind of create this raft
that I could float on financially
once I quit my job and focused fully on these side hustles.
So if you are someone who has a job right now,
and you really wanna follow this path of getting rich,
and you're looking five or 10 years down the road
for your current job,
and you're seeing that there really isn't the opportunity
for your salary to go crazy high,
then I highly recommend starting side hustles on the side.
Now, something important to note here
is that not all side hustles should be treated equally.
This topic is really a can of worms
that belongs in a whole nother video.
So what I'll do is I'll link a video down in the description
talking about the seven side hustles that worked for me.
These are the seven business models that I personally do.
They are tried and true ways, and I stand behind them.
I can answer any questions you have about them.
You'll even find full tutorials on my channel
explaining how to do them all step by step.
So that's the first chapter, and by far the most important.
You have to make more money
rather than focusing on just saving.
However, that brings us right into the second chapter.
So saving money is not all entirely bad.
So the second chapter is spending less than you make.
This is a very simple concept, but it's also very important.
Now, I'm not saying necessarily
to focus on saving as much money as possible.
I'm just saying to look at your budget
at least every single month
and make sure that the total spending
is less than the money that you're bringing in every month.
Now, let's move on to chapter three.
Although this isn't important as the first and second,
this is also still very important.
This is financing and credit cards.
Now, financing and credit cards are an amazing thing.
However, they can be very bad things
if you don't know how to use them properly.
The average interest rate on credit cards
is somewhere around 15%,
and if you have to pay that every month,
that is working really hard against you
building up your savings account
and ultimately getting rich.
If you're going to finance something,
only do it if you absolutely need that thing.
Don't go out and finance toys at a high interest rate
if it's something you really don't need.
That interest that you're paying by financing
is going to be making someone else rich
and taking money out of your pocket every month.
The other part here is you can use credit cards for good.
They're actually not all bad.
Instead of paying on a debit card,
which is going to give you no incentive,
you can find a good cash rewards credit card
that has no annual fee,
you should be able to get 2% back every single month
just by getting the proper credit card.
And then lastly,
probably the most important takeaway from this chapter,
is to make sure that you're staying out of credit card debt.
With that high 15% interest rate,
that is going to be hurting you tremendously.
So pay off the credit card debt if you can
and stay out of it the best that you're able to.
Now, this brings us right into chapter number four,
and this is having a high-yield online savings account.
Now, when you start to make money,
where do you put that money?
If you just put it in your checking account
or your bank's savings account,
you are not going to be making
much money at all in interest.
However, my really high recommendation to you
would be all the extra money
that you have in your bank account
that you don't need every day,
put that into a high-yield online savings account.
Essentially what this is
is instead of a brick-and-mortar bank
that you can go walk into,
like Bank of America or Wells Fargo,
these are online banks so they don't have a storefront,
but basically it's just a savings account
where they pay you a really high interest rate.
Now, this interest rate is typically between two and 3%,
and it's guaranteed, so it's risk-free.
You're not going to be investing in the stock market.
So just by having your money parked in these accounts
rather than putting them in your standard bank account,
you will get an interest paycheck
deposited into that account every single month.
Now, before you think that these are kind of sketchy banks
and they're going to take your money,
these online savings accounts, they're all FDIC-insured,
meaning that if the bank were to shut down or something
and they took all of your money,
the government will pay you back your money.
A couple of the good ones I can recommend to you are Ally.
They have a great reputation.
And Wealthfront is another newer one.
They both have really competitive rates
compared to the other ones.
So those would be good recommendations I would have for you.
So this brings us into chapter number five.
This is a Roth IRA.
Now basically, IRA stands for individual retirement account.
And essentially, you can go through an investment platform.
Something like Vanguard is what I would recommend to you
and you can just open up a Roth IRA.
This is going to be a retirement account for you.
Now, before we get into what this really is,
the Roth portion at the front of this name
is extremely important.
What that Roth means is that this account
is tax-free on the way out,
so you don't get any write offs or anything
for contributing money to this retirement account.
However, when you do ultimately retire
and you pull this money out, it is 100% tax-free.
So all of that interest that you have made,
you get to put that right into your bank account
without paying any taxes on it.
So basically what a Roth IRA is
is it was designed for young adults,
basically a way that they could put away money
very early on in their life.
And by the time that they retire,
all of that money has accumulated a ton of interest
and they should have a lot of money waiting for them
without paying taxes on the way out.
Basically, by opening one of these accounts,
especially with Vanguard, you get to invest.
It's up to $6,000 per year,
but you get to choose where that money is invested.
Now, you can invest it anywhere you want.
You can put it in any stock you want to.
However, my recommendation for you
is to go with safe, long-term investments in this account.
And if you do choose to open one up with Vanguard,
then I would recommend going
with their target retirement accounts.
For this account, specifically a Roth IRA,
when you turn 59 1/2 years old,
you are able to claim this money.
So look at when you will be 59 1/2 years old
and choose the account that matches that.
Basically, it will have a date on it
and all you have to do is put your $6,000 a year
into that investment within your Roth IRA.
Now, I know this stuff is a little bit complex,
but if you just continue to invest every year up to $6,000
into this Roth IRA in a target retirement account,
all of the work is done for you.
Now, this money does get invested in the stock market.
However, since it's such a long-term investment,
you don't have to worry about dips in the market
or losing money temporarily
because this is going to be spread over
hopefully decades of time.
The market generally goes up seven to 10% per year.
Now, to give you a real-life example of this,
on your 21st birthday, if you were to invest just $6,000
and you never invested again,
you only invested that $6,000 one time.
By the time you turned 60 years old
and you're able to take this money out,
it would be worth over $80,000.
Now, that same amount,
if you were just to wait another five years,
and you let that build interest for another five years,
and you collected it at 65 years old,
that would be worth about $117,000,
fully tax-free just waiting for you in your name.
Now, that would be if you just invested $6,000 one time
and you never invested again.
Now, the idea here is that you wanna invest that $6,000
every single year.
So if you were to invest that same $6,000 at age 21,
but you were to continue investing $6,000
every year until you retired,
you would have about $1.2 million
waiting for you in this account tax-free
by the time you're 60 years old.
Now, again, if you decided you wanna wait
until you're 65 years old,
give it a couple more years to build interest,
you would have about $1.7 million
waiting in this account for you tax-free.
Now, I really recommend
starting one of these for yourself at any age.
It's completely free to open these up.
However, the catch here is it's important to start this
as early on as you can.
That's going to give you the biggest bang for your buck
and make you the most interest over the years
so that when you do retire,
you have a ton of money waiting for you there.
Now, this brings us right into the last chapter.
This is the last chapter
because I see it as the least important on this list.
However, as you start to really make money,
this one will become more and more important.
So this chapter, chapter number six,
is investing in the stock market.
Now, by investing in the stock market,
you can put money in and you can take it out
and get your money out at any point in time.
So it's not like this is a long-term retirement investment.
This is not a very beginner-friendly way to make money.
So I wouldn't recommend this very early on.
I would save this
until you've started to make quite a bit of money
and you just wanna be making more interest on your money.
Then, the standard high-yield online savings account
that we were talking about before.
If you're going to invest in the stock market,
my words of caution are to stay away from the shiny objects
or the really trendy, hypy things to buy at a certain time.
Although some people do make a ton of money
in short-term investments like this,
the majority of people lose a lot of money.
So the odds are really not in your favor.
What I do recommend investing in
are two things that are considered very low-risk,
and they should yield you
somewhere between four and 7% every year.
Now, again, before going on,
I have to say that there are risks involved
with investing in the stock market.
There are always going to be...
So with that said,
the two investment recommendations I would give you are SPYD
and VOO.
Essentially the difference here,
the SPYD is going to be a stock that gives you dividends.
So it's going to send you a dividend payment every quarter,
but also you can make money
on the growth of that stock overall.
However, compared to VOO,
VOO is just expected to grow more than SPYD,
but it's not focused as much on a dividend.
So basically, you can choose either of these.
These would be my two recommendations.
Obviously, do your research
before investing any money in these.
However, those are the two
that I would personally recommend to you.
So, guys, that is it for this video.
I really hope that this helps you to get things going
in the right direction.
If you have any questions about any of these things,
please let me know down in the comments.
And if you did enjoy this video,
feel free to give it a thumbs up.
I really do appreciate that.
All right, guys, I will see you all in the next video.