Do you know Benjamin ?..... No ? Me neither. But one thing I know about Benjamin, Benjamin
understood how the beloved money works. Look at him… he is 50 years old enjoying his
life with his wealth and financial security, traveling the world and making a nice life
for himself and his family. You're probably thinking to yourself: "I'd like to have that
too", right? Well, let me put it this way, it is quite possible and feasible for everyone
on this planet to achieve exactly that, but why do some achieve it and others do not?
Is it because they are smarter, work harder or because they are just lucky ? I would say
the points have certainly helped them but were not the decisive reason. The decisive
point was that they understood the game of money and like any game, this game also works
with rules and it is these rules that we look at together. But not just any rules, but the
core rules, the rules without which it doesn't work. And at the end of the video I tell you
the most important rule of all. Without it, you will never achieve a better financial
situation let alone build wealth, save even more money and achieve your financial goals.
I'll tell you exactly how this rule works, why it's so important and how you can easily
implement it with the other 6 basic rules of money and we look closely at how Benjamin
implemented these rules for himself and improved his financial life.
But before we dive into the topic : Hello and welcome back to our channel ! And if you
are new here : We are the finance nerds and on this channel we are helping hardworking
people like you to get more out of your hard earned money by showing you how to use your
money in the most effective way. Remember to give this video a thumbs up at the end,
if you got value out of it and now let’s start.
Give every Dollar a Job The first rule is that you should give every
dollar you earn a job. You're probably wondering what exactly I mean by that and how you can
make it work for you. Like you, your money should have a job or in other words a purpose.
Be for example to provide for food, to provide for a roof over your head and also to provide
for your future. You can see where this is going, it is based on a simple budgeting concept
and that is to have spent your entire salary at the end of each month. Now there are 2
possibilities, either you give your money to a job with a higher meaning or you decide
to give your money to less meaningful jobs. How you do that exactly and which distribution
is useful, I have explained to you in a previous video, you can find this now on the top right
and you can watch it afterwards. Let's get back to Benjamin.... Benjamin was making $2000
a month at the beginning of his journey and he started giving his money jobs. A little
bit of money did the job of paying rent, another half did the job of paying for groceries and
the majority did the job of building up an emergency fund and going to work for Benjamin
by investing it and that brings us to the 2nd rule.
Learn to invest The 2nd rule is to learn how to invest your
money. So go make your money work for you and make even more money. This is by far the
best job you can give your money and also what money was made for in the first place.
In my opinion and that of Benjamin, the real job of money is to produce more money and
not to spend it on consumption. Therefore, Benjamin decided to invest a percentage of
his monthly income in his portfolio and for this he had to acquire knowledge on how to
do it properly. To do this, he took 3 hours a week and consumed everything possible in
the areas of finance and investing, forming his own investment strategy that gave him
a 10% return a year. He started investing at 20 and over a period of 30 years invested
about 30% of his income at an average return of 10% per year. His total deposits of $220,000
became $1,300,000. How and where should you start investing ? In
my video description you will find various resources such as books or video courses to
help you get started. Otherwise, I can recommend you a provider for the beginning, which will
make investing easier for you. You can also find this in the video description.
Spend less than you earn
But what's the point if you know how to invest but have no money to invest ? The keyword
is "Live Below Your Means". I have also made a video on this topic and if you are interested
you can find it above now on the top right. What does living below your means mean ? It
means that you simply spend less than you earn and especially completely avoid consumer
credit. Benjamin also had this problem, he lived paycheck to paycheck and spent all his
money, which in itself is not wrong if you follow the 1 rule, but unfortunately he did
it for the wrong things. Now how did Benjamin manage to live below his means ? He focused
on 2 things: 1. he reduced his big expenses and purchases,
so things like the rent of his apartment, his car and renounced to finance his home.
2. he has curbed his behavior in terms of spending money. He started tracking how often
he spends money per month, which made him more aware and in control of this behavior,
avoiding bad purchases and impulsive buying.
Keep your finances organized Now, to combine all the rules with each other,
to keep control and make it measurable, it is important to keep your finances organized.
That is, to have a place with all the important numbers, data and facts about your financial
situation. And that to be able to assess exactly where you stand right now. The most common
documents you need to track your finances are: a Net Worth Tracker, Budget, Spending
Tracker and an Investment Tracker where your money investments are tracked.
Benjamin has done this easily with several Excel spreadsheets that he has stored on his
PC and can see at a glance what his financial situation is. In addition, he allows himself
30 minutes every week on the weekend to maintain these documents, such as entering the expenses
of the week in the expense tracker. There are of course other tools such as Apps that
will do this for you, however Excel spreadsheets are free. You can find something for both
options in my video description if you are interested.
Pay yourself first One of the most important rules. And I hope
with these rules slowly a concept arises, how you can really improve your financial
situation. And remember, that at the end, I will explain to you another rule, without
which it will be very difficult to use these rules for themselves. Of course you have to
implement these rules yourself and I can't give you a magic pill, I'm just giving you
the fundamentals on which every wealth stands. Paying yourself first means that the top priority
should be to save and invest your money for your own future. This means that when you
distribute your money to jobs, the jobs "Invest" and "Emergency Fund" are the most important.
Benjamin has made it his duty every month to distribute these jobs even in months where
the financial situation was not so good, preferring not to distribute other jobs or to cut them
so that these two were carried out in any case.
Build an Emergency fund We have now reached the 6th but not the last
rule. I have just mentioned it with the previous rule that this is next to the investing the
most important post. Why? Most people live quite well, even if they live far beyond their
means, save no money and invest none. This approach to dealing with his money usually
only goes well until unexpected expenses come. Unexpected expenses are the expenses that
break most financial necks. Exactly that begins, namely the downward spiral. What do most do
then, if they have no more money and such an expenditure comes? Exactly, they borrow
it or take out a loan, which makes their income shrink again and they have even less money
to save and the cycle starts all over again. Benjamin also realized this, so he put 5%
of his income into a savings account for just this kind of expense.
But what is the one rule without which the other rules do not work at all ?
You need to work on your money mindset. Without the right mindset and the right attitude towards
money, you will never achieve your financial goals let alone build wealth. Why ? Because
your ego will always self-sabotage you to protect you from the "evil" change. It protects
you from getting out of your comfort zone and embracing financial success. You have
been programmed that there will never be enough money and that is why your ego keeps trying
to bring this program into reality. This means you have to reprogram your internal system
to change your reality. If your subconscious is not ready to have for example $10,000 in
the account, how do you expect to achieve that in reality if you don't really believe
in it internally ? The subject goes much deeper than I can really explain in detail here,
more important is how you can change it. For this I recommend you to watch the video
above rightand what also works very well are affirmations and the book by T. Harv Eker
"Secrets of the millionaire Mind". You can find the link to the book in the video description
and it shows you exactly how your mindset and your bank account are connected and how
you can improve this relationship. If you enjoyed the video and now want to know
more about how to take control of your finances, click on the video to the right or check out
the video description. There you will find more videos and resources to help you have
more money at the end of the month.
And remember to hit the like button and subscribe to the channel if you are new here
We hope to see you in the next video.