When you're growing up your parents teach you many valuable things like how
to tie your shoes or how to ride a bike unfortunately amidst all that tutelage
they often miss the mark when it comes to financial advice and missing this
critical information can lead to a lifetime of financial struggles
fortunately in this video i'll be sharing with you three money principles
your parents never taught you that you need to know and if you're new to the
channel then hit the subscribe button below for more life-changing content
principle number one carefully select your information sources your parents
probably haven't taught you all you need to know about money so you undoubtedly
have absorbed some financial nonsense in school or from the media but let me ask
you this how much of this advice is correct very little of it would be my
guess this is why it's a good idea to find out for yourself what your parents
never taught you about money you have to understand that many of the things you
were taught are not valid in fact many of these lessons are downright
misleading and if you believe them they can be detrimental to your financial
health so where do we get our information from well we can get it from
books magazines blogs seminars or forums just to name a few however in as much as
our information comes from these sources you need to be careful about selecting
your sources of information you should look for information from people who are
honest and have nothing to gain by misleading you the internet has
simplified finding reliable sources of information but you still have to
exercise caution while reading something from it you need to pay attention to the
consistency of what your source says not that a few minutes after they say one
thing they change the story another thing to look out for are sources with
low credibility or those that seem to be biased more so be wary if the source is
too sensationalistic as this is the case with most gossip blogs whatever the case
note that simply because someone has an authoritative website or blog doesn't
mean that their information is good you need to be wary of being pushed to make
more common money mistakes one common mistake for example is credit card debt
your parents probably never taught you about money especially with regards to
the danger of credit card debt matters get worse when you visit a popular blog
that teaches you about the advantages of credit cards in fact most people don't
really understand the negative effects of credit card debt until it's too late
and it pushes many people into bankruptcy i've said it many times in my
videos the fact that we live in the information age which means that we're
constantly being inundated with information you need to be able to
differentiate between bad info that can get you into trouble junk info the type
that is just useless and good info which basically keeps and puts more money into
your pocket every day we see so-called financial experts give advice and talk
about money tips and tricks it's not always the best idea to follow the
advice of other people especially when they are not well intentioned there are
thousands of experts out there and most of them don't actually know what they're
talking about with so many money experts out there why would anyone want to
listen to a guru with no prior experience in the financial world some
financial gurus are really good but others are just frauds well there are a
few that fall in between the gurus that fall in between are the ones you have to
take with a grain of salt i know for myself personally to avoid issues
absorbing subpar financial information i tend to rely on popular finance books
for proper education one book that has really changed my perspective on wealth
building and financial freedom was money master the game by tony robbins the book
explains how to save tons of money when investing and how to streamline your
path to riches unfortunately the sponsor of this video audible is giving the
first 100 people that follows the link in the description a free copy of any
audio book they want which you can use to get the book that i just recommended
so if you're like me and like free things then make sure to pounce on this
offer while it lasts now one final note to consider when it comes to financial
information is that which comes from your friends just like your parents your
friends want the best for you but sometimes their level of expertise is
not quite up to par and as such their advice may lead you financially astray
all i can say is tread carefully all in all the importance of carefully
selecting where you get your information from cannot be overemphasized principle
number two understand and manage a lifestyle creep most parents don't
understand and hence never teach their children about lifestyle creep in fact
very few people understand the concept of lifestyle creep and how it can affect
their financial health actually have you ever wondered why some people work so
hard yet still seem to be perpetually broke
well the answer is in this principle lifestyle group is one of the most
common money mistakes people make it's basically an increase in your spending
above what you earn a common sign you've let lifestyle creep into your life is
when you have credit card debts you simply can't seem to pay off or when
your bank balance is growing smaller by the month in fact i know people who earn
a great deal of money but due to their poor spending habits they are as
financially strapped as those who only earn a fraction of their income you see
lifestyle creep impacts people across every tax bracket and while it seems
like an easy issue to avoid for many people it isn't you see logically it
makes sense to just save every pay or income increase you realize however
humans are emotional creatures and we like to reward ourselves even if at
times this results in our own financial downfall i mean i'm sure you've been in
this situation before where you've been working long hours or letting the stress
of life overtake your emotions and as a result you justify spending money to
reward your efforts the unfortunate truth is that spending does provide us
with a bit of emotional relief but at what cost pun intended that is
fortunately there's a rule that everyone can follow that can stop lifestyle creep
dead in its tracks and it's called the 15
rule this rule involves not spending more than 15 percent of any rise in
income for example if you just got a promotion at work then allocate 15 or
less to further spending while you save and invest the rest in short if you got
a 10 000 raise at work increase your routine cost by no more than fifteen
hundred dollars if by any chance you find yourself spending more than fifteen
percent of your salary increase even after you've now internalized this
important rule that is that it means there's something wrong with your
spending and it's time for a lifestyle change if often checked this income
increment will soon evaporate and all that hard work will be for naught always
remember that it's important to root yourself in the fundamentals of finance
and one of the guiding principles is living within your means this will help
prevent mistakes from happening in the first place and will also save you the
stress that comes from money troubles principle number three a job won't get
you ahead financially in many of my past videos i made it abundantly clear that
earning a salary is never going to make you rich the fundamental reason stems
from ongoing increases in the cost of living compared to average wage
increases if i'm being honest jobs will barely ever keep you over broke and in
the world we live in today it is difficult to even get ahead if you work
in a very lucrative field like stem or my field of accounting but why is this
so well stick around and elaborate on that soon you see a job should be
considered in terms of finding your feet and being able to have some kind of
financial security for the short term but once you're out of that race and
enlighten yourself more you'll discover that a job can't take you far no matter
how much you're being paid just like everything that is boxed or caged you
deny yourself the possibility of living abundantly if you limit your financial
capacity to only what a job can give you now don't get my message confused here
having a job is obviously important one of the most efficient methods to start
making money is by having a job there isn't a more effective way to bring in
money than a good old-fashioned full-time job however it's not the be
all end-all to financial freedom the lesson here that you need to understand
is that you'll likely need more than just a paycheck to achieve financial
success in life you need to learn how to invest and make intelligent business
decisions in order for it to work for you the fact is that there are enough
income opportunities in the world as long as there are people alive with
needs that are constantly increasing and changing so you're doing yourself a
disservice by limiting yourself to a salary and the damage goes beyond just
finances because as they say health is wealth and vice versa hence limiting
yourself to only what you get from a job may lead to poor finances which could
also lead to poor health so what do you do assuming you already have a job the
next thing to do is to stay uncomfortable with your current
financial situation do not settle for an income that is strictly derived from
your paycheck instead aim to build new streams of income what i recommend is
that you start with another low hanging fruit opportunity like taking on a
second job or freelancing this will of course require extra work but that extra
income will be key in the next step of your wealth building journey now some
other ways to make money can include starting a drop shipping store or a
youtube channel however online businesses tend to take a while to turn
a profit so if you need money now they may not be your best solution to a short
term problem once you have two or three income streams up and running it's time
to let your money work for you you see it's great to put in a hard day's work
and earn an income but it's better when you can earn that income without all the
unnecessary effort and this is where investing comes in no one i mean no one
becomes wealthy without investing investing can come in many forms but in
this context i mean investing in assets that will pay you over time assets like
rental properties or dividend stocks are tried and tested assets that will have
your wealth growing over time and that will also add to your cash flow every
month just keep in mind that leveraging the power of these assets will take some
money upfront which means that starting to build proper spending and saving
habits is a must then as you continue down this path something magical happens
what's going to happen is that over time as your asset base grows you're going to
come to a point where you have a great decision in front of you you can either
ditch your active income and live off your assets or continue to combine the
two and see greater and greater income through the years this is the ultimate
position to be in but it starts with realizing the limitations of your 9 to 5
job 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