Nearly six in 10 Americans don't have enough savings to cover a $500 or $1,000
unplanned expense. That’s absolutely horrifying since if something goes wrong,
you will have to take unnecessary loans or, god forbid, pay a credit card interest.
They could go up 20 or even 30 percent. You have to be a moron to pay that much
interest. But what else can you do if you have no other option.
But even those who actually save some money reportedly said
they don't have much in their savings account. Of course, savings went significantly higher
during the pandemic era since we were forced to stay at home and collect stimulus checks
but that’s now hunting us down with the highest inflation in 4 decades. Despite the fed's best
efforts to keep raising rates, that hasn't helped yet. Maybe if it wasn't for the fed's action,
things could have been much worse, but we will never know that since we don't have a machine
that could take us to an alternative reality. When almost 60 percent of the population says
that they have less than a thousand dollars in their savings account,
you know that we have a problem because a thousand dollars is probably not enough to cover the rent.
What happens if you get sick, get into an accident, or get fired? What do you do?
I get, its not easy to save when we are surrounded by so many things
pushing us to spend. Even before the video started, you probably saw an ad that called
you to visit their website and spend some money. Let me clarify something, spending money isn't
bad. There is nothing wrong with buying stuff you need or want. At the end of the day, what’s the
point of earning money at the end of the day. On top of that, spending is what drives the economy
forward. Without enough spending, we will have deflation that will slow down economic growth.
What I see often happens is that People often complain that they can't save because they need
to cover their basic expenses but end up buying 5-dollar coffee and avocado toast every morning.
Again, there is nothing bad with that, as long as you are saving a good size of your paycheck.
I don’t really support the idea of saving every penny possible because life isn't just about
saving money. It's about experiences. And part of that is having fun with friends and spending
money. However, if you are at the beginning of your journey, you can't afford to spend
every penny you earn. You need to build that capital that will work on your behalf of you.
The problem is that there are few wealth killers that drain your budget the most. If
you can get rid of them, you will be able to save a fortune and build that fortune.
If you are ready, give this video a thumbs up, and let's start with the first one.
Car If you have ever owned a car,
you probably know how expensive it is to have a car. In fact, a lot of people who
drive don't know exactly how much their car costs. The average monthly payment on a new car was $575
in 2020. But that's far from the true cost of owning a car. And that’s back in 2020. It’s far
more than that since there is a shortage of chips and high inflation. And That’s just your
monthly payments without taking into account insurance, gas, and especially maintenance.
What I also realized when I got my first car was how often I began to drive. I started driving
everywhere, even when it wasn't necessary. Gas is not cheap, especially now,
and being stuck in traffic every day can cost a fortune. But if you have a family,
of course owning a car makes sense, especially when public transport is not an option.
But if you are single, for god's sake, save that money and invest it. You will thank me later.
2. Bad habits
Take a look at how much people spend on alcohol, for example. A fortune! 20 bucks here or 30 bucks
there don’t seem like much, but if you add it up over the course of a month, it will add up.
According to the Bureau of Labor Statistics, Americans spend about 1 percent of their
gross annual income on alcohol. For the average household, that’s $565 a year, $5,650 in 10 years,
or a whopping $22,600 over a 40-year period. That doesn’t seem much. But don’t be fooled by this
number. It takes into account all Americans, including those who don’t drink and those who
drink once to twice a year. So if you only take into account those who drink regularly,
that number would be much higher. A few hundred dollars a month is normal for regular drinkers.
The same goes for smoking, gambling, and other bad habits. The average cost of a pack of cigarettes
is $6.28, which means a pack-a-day habit sets you back $188 per month or $2,292 per year.
These numbers might not tighten you, but if you also count the opportunity cost, you will
probably get rid of these habits immediately. If you throw that 2292 dollars every year into
an index fund with a 7 percent return, with the power of compound interest,
you can expect to have $365,883 in 40 years. Add to that the medical bills that you will get
as a result of your bad habit, and you might as well go bankrupt.
3. Spending money on impressing people
Back when I was in school, my self-esteem was really low because I was doing poorly in school,
but as social creatures, we want to be respected by the people around us. We want to be valued
because we have so many insecurities. And often, when we don't know how to
solve these insecurities, so we spend money to show everyone that we are as good as them.
Why do you think people buy Rolex watches. Let's be honest,
a Rolex watch is literally solving one problem, which is telling the time, but even Rolex holders
often use their phones to take a look at the time. But people still spend dozens of thousands
of dollars on them because they have successfully branded themselves as a luxury brand that is worn
by famous and successful people. So we buy them to send a message to people that - look guys,
I make a lot of money. I can afford a Rolex. Most people buy that kind of watch to impress people,
which is not a problem if you can easily afford that. But if you can barely afford a Mercedes
and still decide to buy it, you have just thrown yourself into a huge financial problem.
4. Paying high-interest rates.
Credit cards are great. It's probably the best way to build your credit score and maintain it.
It is extremely important because it will help you to get loans and lower interest.
But here is when things get terrible. When you use a credit card to pay for things you cannot afford,
what ends up happening is that, you will not be able to cover your credit
card debt at the end of the month and the interest starts rolling.
Have you ever considered how high credit card interest rates are? They could go as high as 20
or 30 percent. The interest on your mortgage would seem like peanuts in front of credit card rates.
That might not seem like a big deal, but 41 percent of credit card users reported
that they are failing to pay their bills on time. And that’s what these
banks are counting on. They want you to forget! No wonder why total credit card debts have risen
to almost a trillion dollars nationally. So don’t ever get credit if you can’t
control your spending habits, especially if you have some really bad habits.
5. Chasing a woman
What’s certain about life is that. There will always be a woman around you who will attract you,
and if you can’t control yourself, you are screwed. The world is filled with them,
but what's also certain is that your time and resources are limited. Even if you have 100
million dollars, it is easy to spend that money on a woman in a glimpse of an eye.
What's more important than money is time, the time you could spend building your business,
side hustle, or whatever will generate real wealth. Unless you learn how to
control your urge to chase women, you will never reach financial independence because
there will always be a woman on whom you will waste whatever savings you have saved.
These are just 5 out of many wealth killers, but these are probably the top.
That’s it for today. Thanks for watching, and until the next one.