If there's one idea that's been drilled into us it's definitely this your net
worth is contingent on your spending habits however is there
a right way to spend money turns out there is and your spending
habits can determine how fast you break free from poverty this is why in
this video i'll be sharing with you the only four ways you should ever spend
money and if you're new to the channel then
hit the subscribe button below for more life changing content before we deep
dive into the four best ways to spend money
let me give you a background check about someone that heavily influenced the
concept of spending money the guy goes by the name milton friedman
and even a decade after his death he is still
a household name in the world of economics specifically
friedman was a renowned american economist born on march 31st
1912. in 1932 he graduated from rutgers university with a degree in mathematics
and economics he proceeded to columbia university to
clinch a phd in economics friedman was an economic
brain box a trait that earned him the nobel peace prize of economics in 1976
and like many scholars of his kind he left behind an insightful book
that serves as an economic reference point to date
milton friedman's book free to choose counters the prevalent mindset
that perceives spending money as a bad thing if you're like most people
you've probably looked at something nice and refrained from buying it despite
having the funds to you've developed a sense of financial insecurity because
you keep thinking that you don't make enough money to spend
consequently spending money is often tailgated with feelings of guilt
or even regret because you believe it's better to save and invest instead
your scarcity mentality leads you to think that there's a money hungry
monster out to take all you have do you know what else's
mentality does it stops you from securing your
financial future and living the life you truly deserve
the thing is spending money isn't a bad thing after all actually
the negative outlook on spending stems from deep-seated poverty or a scarcity
mindset most people think that financial
resources are so limited that they'll automatically fall back
into a financial black hole if they dare give up even an extra
dollar this is a lie and it's all in your head ditching this
poverty strewn mindset is the first step towards reclaiming
your financial power if anything seeing spending as something bad could
have a ripple effect on handling essential bills in a bid to
guard your bank balance you might end up postponing necessary payments
and landing yourself in financial trouble if you want to achieve your
financial goals start shifting your mindset to believe in abundance
there's so much money to be made hence you shouldn't shy away from spending on
things that build a better you here are the only four ways
you should be spending your money number one spend your own
money on yourself the first obvious method to
spend money is spending it on you friedman argues that when you spend
money to fulfill your own needs you're careful about what you spend it on
your intent is to extract maximum value of
every dollar as such the need to economize doesn't manifest itself in
this case your only concern is whether the value
of the expenditure tallies the satisfaction you'll derive over the long
haul how can the spending strategy help you
make more money the thing is when you're familiar with the nuts and
bolts of earning an income you'll spend it on things that bring you genuine
fulfillment forget the fleeting happiness that accompanies drinking
alcohol or shopping at your favorite store
we're talking about the deep sense of self-satisfaction that makes you regard
your financial decisions with pride and give yourself a pat on the back the
type of decisions whose financial results you reap even years from now
for instance let's assume your boss pays you an extra fifty dollars for every
hour of overtime you work if you extended your work day by three
hours for five days a week that's an additional 750 and since
you're familiar with the sacrifices involved
in working overtime you'll be glad to spend the money on yourself as a token
of appreciation this can be through learning a new skill
saving towards your home's down payment paying for gym membership
or upgrading your computer setup if you choose to spend the money on a gym
membership you're technically investing towards your health
work performance correlates strongly with your physical and mental shape
therefore working out will have positive results on your
personal and professional life with sharper work performance you'll be
slated to beg a promotion a raise or a strong recommendation for a
better paying job in the end working overtime turns out to
be well worth the effort see how beneficial it can be to spend
money on yourself and the best part is your options are limitless there are
many ways you can spend money on yourself and derive
high financial value from it education is another
excellent example if there's a stock market course being sold for 200
you were better placed adding it to your basket than purchasing a 200
designer bag that you may need to replace in two years it's likely that
the knowledge you'll acquire from the course will carry you through the
majority of your investing life increasing your earning potential along
the way purchasing valuable assets is also another
brilliant way to spend money on yourself essentially purchasing cash generating
assets is a tested and approved path to financial freedom
it involves buying appreciating assets like real estate property or stocks
such assets assure you of earning profits with time making them a
proper way to spend money on yourself and earn from it so the next time you
have an extra couple of dollars to spend first assess your life to identify
what's lacking if you find that it bears any earning potential
don't hesitate to invest in it number two
spend your own money on others the second method is spending your money
on other people when you do this you become more discerning about how much
you're spending without necessarily losing sleep over the value
the other person is deriving your worry is to spend as little as possible and
still derive reasonable value from it a perfect example is hiring employees to
take on different tasks at your company during the interview process you'll be
keen to lay all of your cards on the table
and only hire employees who meet your stated requirements
this means that as long as they fit into your non-negotiables
things like experience and level of education you won't mind if they don't
take all of the boxes this is why companies don't mind hiring
clueless interns and trading them on the job
for one interns are cheap to onboard and they're less likely to demand a
high salary anyways on top of that they're willing to learn and can
efficiently juggle different tasks once they're in the loop of things if
you get dependable ones you're sure of boosting your company's productivity and
expanding your clientele base which in turn translates into more
earnings for your company this analogy also applies to spending money on a
marketing agency suppose you onboard qualified marketing
experts to bring more visibility to your business
in that case the fruits will manifest in your company's profits
strategic advertising can actually bring tremendous benefits to your business
including social media visibility seo brand awareness
and access to cutting edge marketing technology
so what's the takeaway here despite spending your money on other people it's
bound to find its way back to you and multiple-fold if spending money on an
external party will translate into more returns then
it's worth investing in whether this means hiring an affordable bookkeeper so
you can spend less time doing taxes or getting someone
to mow your lawn as you secure another freelance project go ahead and
spend money on other people number three spend someone else's money
on yourself thirdly you can spend someone else's
money on yourself but through acceptable means of course
let's imagine your boss gives you their debit card to cater for your lunch
there's no limit to how much you can spend so you're unbothered about how
much the lunch will cost most likely you're gonna pick a tasty
high-end dish that you would shun if you came to lunch with your own money
because under normal circumstances you're hard-pressed about pinching
pennies and ordering within the constraints of
your budget but in this case your only concern is to fully exploit the free
money in front of you consequently you would
care less if the restaurant had a discount because
you're not the one paying anyways similarly leveraging other people's
money could be the gateway into a life of abundance
debt is a good example and i'm sure you're familiar with angel investors
right these private investors obligingly
inject their money into business startups or existing enterprises that
seek expansion depending on your agreement they'll
either do it for free or in partial exchange of equity within your company
for you this is a golden opportunity to obtain funding for that business idea
you've been working on if you're able to acquire say 400 000
worth of funding you can hire a large skilled team
without worrying about how you'll pay them
plus you'll have the financial power to invest in the best technology
that will help you run your business efficiently this also applies to
acquiring debt to boost your business or taking advantage of company benefits
such as cars health insurance or flight allowances in
essence spending someone else's money is a means you should get behind
number four spending someone else's money on others
lastly you can spend another person's money on someone else
believe me it's not as complicated as it sounds in this case you are neither the
payer nor the direct financial beneficiary you
only come in as a link between these people for
instance look at how the government handles taxes
while these are funds extracted from other people's income the government
channels them towards bettering other people's lives through social funds
pensions and student loans the government simply links the taxpayer in
the beneficiary without caring about the utility derived by each party it doesn't
matter whether you as the taxpayer approves of such
projects either it does what has to be done in the same
light you can also spend someone else's money on someone else for your own
benefit for example when you obtain a business
loan to pay your employees you're basically spending someone else's money
on someone else paying your employees on time means they
continue working for you and helping you upscale your business
the same applies to running a charitable organization
you collect funds from donors and remit them to those in need
while the latter example may not result in any direct financial benefit to you
you can benefit from building a name for yourself as a head of a charity
organization and there you have it those are the only
four ways you should be spending your money thanks
for watching if you want to go from the life you have
to the life you deserve then hit the subscribe button now