The world is rife with men and women who once had great wealth in their
possessions and blew it people such as mike tyson patricia cluj alberto velar
and the likes quickly come to mind this is clear proof that getting a lot of
money is not the antidote to poverty therefore in this video i'll be
revealing to you why high income doesn't guarantee wealth and if you're new to
the channel then hit the subscribe button below for more life-changing
content it's challenging to feel wealthy when something or someone constantly
takes a massive bite out of your pay things like spending money on essentials
living and saving money for the future do not feel like a luxury especially
when comparing yourself to those who are higher up the food chain it's almost
impossible to feel rich compared to your neighbor that drives his luxury car
through the streets every night however it is possible that you were on the path
to wealth while that neighbor may be on the path to financial ruin believe it or
not there was a time when earning six figures was a significant milestone
amongst upward moving professionals if you were young and unmarried in one of
the country's major cities you could own a host with a door attendant drive a
european car eat in fine restaurants and vacation in the maldives for married
people it meant owning a large suburban home and having ample college savings
for your children in addition to an enjoyable lifestyle a hundred thousand
dollars was a symbol of status it meant joining the financial elite for these
six figure dreams these people worked for decades trusting that their hard
work would be rewarded and that the social pact was safely in place to
guarantee a blissful retirement as a result a lot of people idolized the
thought of one day earning a six-figure salary but a hundred thousand dollars
today definitely doesn't present the same benefits inflation a rising
consumerism has made a hundred thousand dollars simply an entry point to having
a bit of financial leeway nowadays getting ahead financially means making
250 000 or more as a single person the truth is more people are starting to
realize that there's really no such thing as enough money the person who
earns it makes it enough or works to create what he considers enough for this
reason high income cannot by itself guarantee you wealth there are
principles to follow and steps to take to attain your definition of wealth and
in this video i'll be talking about this despite earning handsomely people who
struggle financially are so common in these times that an acronym was formed
for them the term henry stands for high earners not rich yet this acronym has
come to characterize a particular group of high-end employees who are primarily
millennials according to experts a typical henry earns more than a hundred
thousand dollars is in his early 30s and strives to balance his consumption of
savings habits resulting from the struggle they are lagging behind in
wealth building and are no closer to their financial goals their comfortable
if not luxurious lifestyle is partly to blame for their situation however for
the sake of objectivity one could also blame the economy which looks good but
has a lot of tension bubbling on its surface one of henry's biggest financial
headaches is that they typically live above their resources and fall victim to
a decline in lifestyle generally when you punch above your weight you risk
going overboard and that's part of the problem of people who earn high incomes
but live lavish lifestyles if you're a person who's determined to create an
abundant wealth then you know making more money should only mean saving and
investing more when living standards rise to match the increase in your
discretionary income then you have a big problem just because henry's income is
constantly growing shouldn't mean that they have to spend more money they
should not spend more if they get used to living on three thousand dollars or
four thousand dollars a month they may wake up a decade later and find
themselves spending ten thousand dollars a month several henries find themselves
several henries find themselves unable to build real wealth because of their
expensive habits these include taking international vacations staying in
luxury hotels owning and or renting two homes this set of people appear unable
to sacrifice this lifestyle these lifestyle choices are in stark contrast
to the golden rules often given by experts avoiding an excessive lifestyle
is the key to building wealth and as much as these higher earners are not
helping themselves to start with there are forces that they cannot control and
that are also restraining them financially stay with me and i'll
explain this as we proceed in this video whether they know it or not millennials
are suffering from the crisis of affordable prices the economy may seem
to be on the rise right now as stock markets have risen and in the us
unemployment rates have kept its half-century low of 3.5 percent however
this is not the whole picture most statistics have ignored the fact that
living costs have skyrocketed and income growth has simply not kept pace it's
quite helpful to note that the income of young adults has grown by only 29
from 1979 to 2017. conversely the median price of home sales has risen 39
and national healthcare costs per capita have risen nine thousand dollars since
1970 over the same period also education cost him more than doubled since then
with more use on student loans than ever before the national total debt on the
student loans is now a record 1.5 trillion dollars and the average student
debt of a 2018 graduate who took out a student loan is 29
800 it may also interest you to know that
overall cost of living is going up if you lived in the new york metropolitan
area in 1987 it would probably cost you around a hundred thousand dollars but
now that would cost you about a hundred and seventy thousand dollars today part
of the explanation may be that the price of commodities favored by upward moving
professionals is almost perverse we now have a hundred and seventy dollar diesel
jeans that replace thirty dollar levi's three dollars and ninety five cent flats
from starbucks compared to 25 cent coffee from the deli or the mandatory
449 dollar ipod which replaced the essential 75 sony walkman of the regan
years basically one can tell from all this that earning high while being a
spendthrift can be a deadly combination especially when you throw in the fact
that life is neither easier nor cheaper income is necessary but what you do with
that income increases your wealth wealth building involves the utilization of
savings for long-term economic stability it can be challenging to prioritize
long-term financial success over short-term luxury products that make you
feel rich thanks to technology the flashy life has become even more flashy
and it's hard to resist most millennials have lost the virtue of delayed
gratification while driving a luxury car may make you feel rich today you may
feel different as you approach retirement with minimal savings so keep
this in mind a high income does not directly mean that you'll be wealthy if
you blow all your income you will not build wealth yes it's that simple if you
earn a six figure salary but spend everything you won't build wealth
however i do have some good news for you in this video you can build wealth on
any income whether big or small you can start now earn more focus on saving your
money and building wealth instead of using unnecessary luxuries that only
make you look rich of course it's probably easier to build wealth with a
higher of course it's probably easier to build wealth with a higher salary
because you can afford to save more after your necessary expenses and it's
wise to work to increase your income while lowering your costs the more space
you can create for your income and expenses the more you can save towards
long-term wealth however before you can build wealth you need to know where you
stand today information on the amount of money you make spend and save will let
you know how to approach investing you cannot have expenses that equal your
income much less of surpassing it and if your expenses are already at a minimum
you have to find a way to earn more if getting ahead financially is your goal
it's essential to look at your income and expenses regularly you need to make
sure you don't use more than necessary yes it sounds simple but you might be
surprised at how quickly expenses can exceed your salary you have to be
truthful and count all expenses going back to the henries these individuals
live extravagantly so there's always room for cutting costs once they get
serious about their future expenses can be reduced by minimizing eating out
commuting in a more economic fashion or simply downsizing their living quarters
once expenses are under control it's time to take care of any debts i'll tell
it like it is it is incredibly difficult for anyone to increase their wealth
while in debt the primary concept behind all this is that you cannot build wealth
if you don't save and then invest which is hindered when you're making interest
payments on a regular basis once you have money saved then it's time to start
investing when your savings are turned into smart investments you can grow your
assets faster instead of letting your money sit idle in a savings account when
inflation eats up its value you should invest that money it's when an
individual makes intelligent investment choices that wealth starts to come you
can build an impressive stock market portfolio create a steady cash flow
through real estate or focus exclusively on your retirement accounts generally
the amount you make does not matter so long as you save and invest correctly
like many financial advisors would say it's not about how much you make but how
much that that money makes for you to explain further in this video i'll show
you two scenarios so we can paint a clear picture in the end you decide
who's wealthy and who is not so our first friend is michael who's a
university graduate he lives humbly well below his means and he tries to save 20
of his income every month and avoids that the best he can after a few years
michael will start earning twice his former salary although he is now married
and has to take care of his family he is still saving some of his income after a
while he opens a retail store that fetches him more money 20 years later
michael has retained his savings and his investments are indicative of his
financial discipline meanwhile we have gabriel who is also a graduate of an ivy
league university he earns a very nice salary he's intelligent and works hard
but he loves to live large he's an expensive car and a stunning house to
match not to mention his wife wears expensive clothes and jewelry and their
children are denied nothing however gabe was from paycheck to paycheck and saves
very little because of his and his family's flashy lifestyle he has also
failed to invest successfully after a while he realizes he is spending more
than earns despite his substantial monthly salary if gabriel should ever
lose his lucrative job most likely his family would go poor as you can see a
habit is formed in these two men over time and while one is healthy and the
other unhealthy they are both deeply rooted therefore it is pertinent to
develop the habit of spending less than you earn saving and investing of course
it is good to earn a high income since it makes things easier and wealth
generation potentially faster however you should not inflate your lifestyle to
match up so in conclusion if you approach wealth creation with the
attitude that you're giving up something then it is even harder to stay on course
cutting down your extravagances to save and invest is not a loss because what
you stand to gain in the future will be worth it hey it looks like youtube
thinks this next video is the one that will change your financial life forever
give it a watch and let's see if they're right