- I don't have a crystal ball but I wish that I did.
Now I do have one of those eight balls
that I shake up every single day though
because it helps me make better decisions
and it also gives me a chance to kind of blame my problems
on something other than myself.
One of my ex-girlfriends
did not find it funny that I used that eight ball
for a couple of those excuses.
On the bright side
she did marry the next guy that she dated though.
So she can actually thank my lucky eight ball
for bringing so much contention into our relationship
that we broke up
but what if we don't wanna have to use an eight ball
to do the right thing with our money this year?
In this video I'm gonna give you some suggestions
on what to do with your money
so that you can take this meh year and turn it into a year
that will completely shift the direction
of your financial future.
Hey money nerds, I'm Jarrad with an A and on this channel
we like to talk about all things personal finance
and investing and we try to have some fun in the process.
The vast majority of us
might actually be done with formal education
but that doesn't mean that you should stop learning.
Luckily for you and I
we don't have to spend a few thousand dollars
to take a course in college like how to climb a tree
just to get enough credits to graduate.
Excuse me Mr. College President,
I'm pursuing a business degree
so you can actually take these required science classes
and all of the other useless classes
you were making me pay for
and shove 'em right up your a--
(clears throat) Excuse me, back to what I was saying.
You're a little bit older now so that means that mom and dad
aren't banging on your bedroom door
to leave the house in time to make it to class.
The first thing to do with your money this year
is to take a portion of it
and invest it into some sort of continued education.
Think of it in terms of acquiring more skills
that'll pay off later down the line in the future.
Now I know that you can find a ton of information for free
and if you can do that then absolutely by all means
take advantage of that
but understand the cost of something being free.
When something is free it's not always taken seriously.
It's usually taken for granted
because there's no actual skin in the game.
Sure, you're spending your time
as opposed to your dollars and time to educate yourself
but based on how a lot of us spend our time
we don't actually value our time as much as we do our money.
So sometimes it actually makes sense
to intentionally trade dollars for knowledge.
Another good thing about spending money on education
is that you don't have to go searching for information
all over the place.
For example, if you purchase an online course
or even an in-person course
then all of the information will usually be complete
and laid out for you in a very organized manner.
I spend a few thousand dollars on continued education
every single year and it has had a huge payoff
for myself and my bank account.
Plus unlike college courses you get to choose what you learn
as opposed to being a we'll say business major
and being forced to take something like a music class.
Hey College President, know that Bach to Rock class
that took in college
didn't help make me a more well rounded individual.
Sorry, not sorry.
Think about it.
You also learn better and retain information a lot easier
when you were studying and learning something
that you actually want to.
Wow, who woulda thought?
Don't let the messed up college system ruin your ability
to want to intentionally pursue learning new things.
If you haven't done it already
please Hulk smash that thumbs up button.
It helps support myself and this channel
and my dog Molly as well would love you long time.
Why do businesses fail?
It's a simple question that has a black and white answer.
It's because the money going out
is greater than the money coming in
for too many months in a row.
That's why this year
I want you to start thinking like a business owner
when it comes to your personal money.
Run your life like it's a business that needs to grow.
One of the first things that you can do
is audit your spending.
If a company is hemorrhaging money out of their B hole
then there is no way for them to know
how much they're spending or where it's going
unless they break it down by individual business segments.
I'm not even saying for you to do a budget here
so don't start rollin' your eyes and say Jarrad
I'm not doin' a budget, you're an idiot.
Yes, that is ideal
and I personally still do a monthly budget
but you don't have to.
The point is to just have an idea
of where your money is actually going.
How much is going towards housing?
How much is going towards car expenses?
How much is going towards food
and all of the other black hole expenses
that you don't even notice on a day-to-day basis.
Take those little fingers of yours,
log into your back account,
and download your expenses from the last full month
then drop into a Google Sheet or Excel spreadsheet.
If you're one of those people who are afraid of pivot tables
and V lookups and graphs
then just use something like a free tool
that they have over at mint.com.
If it's been a little while
since you've audited your spending
or you've never done it before then I recommend going
and grabbing a bucket before you do this
because you are going to throw up a little bit
in your mouth.
The next thing you should focus on
is research and development which is basically educating
and refining your personal skills
that'll pay off later down the line.
The acquisition of more skills
and the refinement of those skills
will generate you more money guaranteed.
The more you know the more valuable you become to yourself,
the people around you, and society in general.
This will give people a reason to involve you
in certain things or even come to you
for your particular expertise.
Think of acquiring new skills like planting seeds
in the garden of your backyard.
You're not expecting to immediately reap the rewards
of your actions today or even tomorrow.
You're doing it for the payoff that it will have
at some undisclosed point in the future
but it all starts with doing the work today
to acquire those new skills.
The only way a business survives
is if money continues to come in and increases as well.
That's why it's so important to increase your revenues
whenever and wherever possible.
You are the product so quit putting out a crappy product
to the world because no one wants to pay for that.
If your revenue isn't increasing then you're the problem.
You're either not creating some sort of value
or you're not marketing yourself to let it be known
why people should pay you more money.
You can have the best product in the world
but if no one knows it then your product is worth $0.
Most successful companies
will have multiple streams of revenue
because they need multiple streams of revenue
to survive in the good times and even the bad times.
Facebook bought Instagram years ago
and thank goodness for them that they did
because it accounts for an extremely large portion
of their revenue.
Having one source of income
means all of your eggs are in one basket.
It's like traveling and only packing one pair of underwear
for each day that you're on the road.
Murphy got it right with his law
when he said that if you can make a mess in your underwear
then you will make a mess in your underwear.
Repeat after me, if two is one then one is none.
You're the CEO of your own life
so it's time to start acting like it.
This year Uncle Jarrad is ordering you
to continue investing your money.
Think of me like your big or cool Uncle Jarrad
telling you what to do in this case.
Over the past few years all we've heard
is that a recession is coming
or a major market correction is on the horizon
that's going to destroy the economy
and clean out all of our bank accounts.
Trust me, I hear the concerns
about how the US economy is in it's 11th year expansion
or how the Fed is artificially propping up the economy
and many other potential issues.
Both of these are valid things to be aware of.
Yes there will be another correction
at some point in the future
but no one can actually tell you when that's going to happen
or how bad it's actually gonna be.
Everything is just a guess until it actually happens.
Let's have some fun and recap the past few years
so we can understand the insanity
that is going on around us.
The stock market has hit record highs,
the yield curve inverted, student loan debt
is at its highest and continues to grow, trade wars,
Kim Kardashian's butt got a little bit bigger this year,
upcoming elections, and way too many more for me to mention.
I don't know about you but this 24-hour news cycle
is so exhausting.
If you let any of these things impact how you invested
over the past year then you would've missed out
on the almost 30% gains that we've all seen.
We need to stop finding reasons not to invest
or hold off on investing
and focus on the reasons to continue investing
and even possibly investing more.
You can't benefit from returns for being invested
if you're money is just sitting on the sidelines
and you're terrified to do anything with it.
Here's some good reasons to continue investing.
Number one, you're going to need money to live off of
when you're 70 years old.
Who cares what happens to the market prices
within a one to five-year period
unless you're about to retire.
You can't turn back time to invest for the old you.
Number two, time in the market is more important
than timing the market.
The data has shown
that you and I cannot successfully time the market.
So quit acting like you're so special enough
to beat what the statistics show
and focus more on consistently putting money in
every single month.
Number three, $500 invested today with a 7% return
could be worth almost $2,000 in 20 years
but only if it's actually invested.
This is real life.
You actually need to take action to invest the money.
No one's gonna give you a gold star if you don't do it.
Number four, investing today
will help you reach financial independence sooner.
Yes, you'll actually be able to leave work
at a reasonable age the sooner you invest
and the more that you invest.
Oh my gosh Jarrad but I love my job so much.
I wanna do it forever.
You might love your job today
but how do you know you're still gonna love it just as much
in 10 or 20 years?
Let's just assume that you're going to hate it
and be ready to move on to something else
because I don't know about you
but I am not the same person that I was 10 years
or even five years ago for that matter.
Everyone should be investing in an IRA.
So I'll throw a playlist and some resources
in the description of this video to help you get started
with that type of thing.
Now we need to talk about the elephant in the room
and it's one of the reasons that people always feel on edge
about their money situation.
We always hear those news stories
about how 40% of Americans can't afford an emergency
that costs $400.
I have zero clue if this is true or not.
To me it sounds insane but then again
I am no longer in that position
so I could just be out of touch in this area.
But hearing things like this is a good reminder
to make sure that you do have a decent sized emergency fund
to help you get through any unexpected expenses
that you'll face this year.
I just had a hot water heater go out in my house
a couple of months ago
that I paid for out of my emergency fund.
If I didn't have a six month emergency fund
and that $1,000 bill
could've potentially destroyed my finances
at least for a little while.
Keep in mind that the amount that you have in your fund
can be as large or as small as you want.
As long as it helps you live with a little less stress
then go with that particular amount.
While I was in the process of paying off my $82,000 in debt
I felt comfortable with anywhere between 1,500 and $2,000.
Now since paying off all of my debts
I was kind of happy with three months at first
and now I feel more comfortable with six months'
worth of expenses in my account.
One thing we can all be sure of
is that random expenses are gonna pop up
that we don't plan for.
So quit pretending
like everything is a big surprise when it happens
because it shouldn't be.
One more thing,
your emergency fund isn't there for you to invest
and it's definitely not there for you to spend on new shoes
or going out to eat.
It's there to keep you out of the poor house
and remove stress from your life.
So tuck it away
in a nice high-interest online savings account
and completely forget about it.
As long as the return on that money
is keeping up with inflation
then you should be happy with that.
Next I want you to take 30 days
at any point throughout this year
and restrict yourself just a little bit
with the money you're spending in one area.
30 days is just enough to make you kinda feel it
but it's also not that long in the grand scheme of things
if you think about it.
One of my favorite stoic philosophers Seneca
suggested to set aside a certain number of days
to be content in living with a little bit less.
He basically tells you to go through these days
dressing and living like you're poor but don't worry
because I'm not suggesting that you do this
to the full extent that he was talking about.
This was Seneca's way of teaching you
how to bring yourself back down to baseline
or almost give yourself a little bit of a reset
to realize that you'll live just fine
if things are removed from your life.
This is something that I'll be taking advantage of soon.
I'm gonna be taking one month
in this first quarter of the year to avoid purchasing
some of the extra things I do normally.
For me that means no cheat meals,
a.k.a. eating out for 30 days.
That also means that I'm avoiding dates for a whole month.
I know, sounds weird but I think I can do it.
As we progress in our finances
and become a little bit more well off
we naturally start to consume a little bit more
and begin to lose touch.
It usually doesn't become an issue
until we realize it's too late
or really difficult to change our habits.
So take 30 days throughout the year
and give yourself a little money challenge
to see if your goals are still aligned with your actions.
Check out these videos to your left
that I put together just for you.
Make sure to check out the description
for more resources and playlists to help you out
with all of your personal finance and investing needs.
Make sure to Hulk smash that thumbs up button
and I'll see ya in the next one friends, adios.