How I Saved $100k in 5 Years
Summary
TLDRThe speaker shares their journey of saving $100,000 twice by the age of 30, despite earning minimum wage. They emphasize the importance of increasing income through side hustles and career advancement, avoiding lifestyle inflation and debt, and the power of investing to grow wealth. The video highlights the significance of setting specific financial goals and leveraging compound interest for long-term wealth creation, aiming for financial freedom and the option of early retirement.
Takeaways
- 💼 The speaker saved $100,000 by 25 while earning minimum wage, achieved through living frugally, having few expenses, and living at home.
- 🚗 They avoided debt by driving an affordable car, not having student loans, and paying off credit card balances in full each month.
- 🏠 After saving $100,000, they used it as a down payment for a townhouse, which they later sold for a profit.
- 📈 The speaker increased their income by regularly raising rates in their day job and by pursuing side hustles like online selling and YouTube.
- 💡 They emphasize the importance of avoiding lifestyle inflation and staying debt-free, even when income increases.
- 🚶♂️ The speaker suggests that increasing income can be achieved through getting new skills and credentials or by switching jobs.
- 💸 They highlight the benefits of investing and how it can turn a small initial sum into a significant amount over time through compound interest.
- 🌐 The speaker recommends using platforms like Moomoo for investing with low fees and taking advantage of tax-advantaged accounts.
- 🎯 Setting specific financial goals and having a clear 'why' behind those goals is crucial for staying motivated and achieving them.
- 💼 The speaker's current goal is not just to save $100,000 but to have the option for early retirement and financial freedom.
Q & A
How did the speaker manage to save $100,000 by the age of 25?
-The speaker saved $100,000 by starting to work at 17, living at home with minimal expenses, not going to university to avoid student loans, driving an affordable car, using credit responsibly, and saving almost every dollar earned from a minimum wage job.
What was the speaker's monthly savings when they saved $100,000 over 8 years?
-The speaker saved a little more than $11,000 per year, which breaks down to approximately $916 per month.
How did the speaker's spending habits contribute to their savings goal?
-The speaker avoided lifestyle inflation, splurging only on a few things like getting a pet, a Macbook, guitars, and attending concerts. They saved almost every dollar they made.
What major purchase did the speaker make after saving $100,000?
-The speaker used the $100,000 as a down payment for a townhouse, which they lived in for 2 and a half years before selling it for a profit.
How did the speaker's income situation change after the age of 26?
-After the age of 26, the speaker's income started to increase, allowing them to save another $100,000 in less than 5 years.
What was the speaker's initial approach to increasing their income?
-The speaker increased their income by regularly raising their rates in their day job, suggesting that switching jobs every one to two years can also be a powerful way to increase income.
What is the role of side hustles in the speaker's financial strategy?
-Side hustles played a significant role in the speaker's financial strategy, with the biggest side hustle being buying and selling items online for profit.
How did the speaker's perspective on debt change over time?
-The speaker remained debt-free throughout their savings journey, avoiding credit card interest and car loans, and emphasizing the importance of staying out of debt.
What was the turning point for the speaker in terms of investing?
-The turning point was when the speaker began to educate themselves about investing, which allowed them to grow their savings much faster and reach $100,000 quicker the second time.
How did the speaker's understanding of compound interest impact their financial goals?
-Understanding compound interest allowed the speaker to see the potential of their savings to grow exponentially, aiming to retire a millionaire by leaving their money invested.
What is the speaker's advice on setting financial goals?
-The speaker advises setting very specific goals with a clear 'why' behind them, emphasizing the importance of motivation and having a concrete plan for the money saved.
Outlines
💼 Early Wealth Accumulation on Minimum Wage
The speaker details their journey of saving $100,000 by the age of 25, despite earning minimum wage. They started working at 17, had minimal expenses, lived at home with low rent, avoided university to prevent student loans, drove an affordable car without a car payment, and maintained a debt-free lifestyle by paying off credit card balances in full each month. They allowed occasional splurges like getting a pet and purchasing a MacBook and guitars but primarily saved every dollar earned. The speaker emphasizes that saving $100,000 over eight years averages to just over $11,000 per month, which they believe is achievable for many young people, especially if they live affordably. They also recount how they invested the savings into a townhouse at 26, which they later sold for a profit, contributing to their current house purchase.
📈 Doubling Down on Savings and Investments
After recounting their initial savings achievement, the speaker shares how they saved another $100,000 in less than five years with a different approach. They increased their income by raising rates in their day job and pursuing side hustles, such as online selling and a YouTube channel that eventually became profitable. The speaker also discusses the importance of avoiding lifestyle inflation and staying debt-free, mentioning their strategy of buying a used car outright to avoid a car loan. They highlight investing as a crucial component of their savings strategy, explaining how they leveraged investments to grow their wealth and achieved $30,000 of their second $100,000 through investment returns rather than earned income. The speaker endorses a platform called 'Mumu' for investment purposes and mentions the benefits of compound interest for long-term wealth accumulation.
🚀 The Power of Compound Interest and Specific Goals
The speaker explains the concept of compound interest, illustrating how leaving $100,000 invested could potentially turn into over a million dollars in 30 years or $2.5 million in 40 years. They break down the savings needed to achieve this, suggesting that saving a little over $1,000 a month or $38 a day for five years could make someone a millionaire. The speaker underscores the importance of setting specific financial goals and having a clear 'why' behind those goals to stay motivated. They share their personal goal of achieving early retirement or at least the option for it, desiring the freedom to choose projects that excite them without financial obligation. The speaker encourages viewers to define their financial goals, increase their income, avoid lifestyle inflation, educate themselves on investing, and utilize compound growth to achieve financial freedom.
🌟 Reflecting on Achievements and Encouraging Goal Setting
In the concluding paragraph, the speaker invites viewers to share their financial goals and the steps they are taking to achieve them. They provide links to resources mentioned in the video for further exploration and encourage engagement by asking viewers to comment on their goals. The speaker also prompts viewers to like, subscribe, and follow them on Instagram, emphasizing the importance of finding one's 'why' and wishing viewers well in their financial journeys.
Mindmap
Keywords
💡Minimum Wage
💡Debt-Free
💡Lifestyle Inflation
💡Side Hustle
💡Investing
💡Compound Interest
💡Financial Goals
💡Safety Net
💡Income Increase
💡Budgeting
Highlights
Saved $100,000 by age 25 on minimum wage by living frugally and avoiding debt.
Began working at 17, had few expenses, and lived at home paying cheap rent.
Avoided student loans by not attending university.
Drove an affordable car without a car payment and stayed debt-free.
Splurged on a few things like a pet, a Macbook, guitars, and concerts, but saved most income.
Saved $11,000 per month over 8 years despite earning only $25,000 annually.
Invested savings into a townhouse which was later sold for a profit.
Faced financial insecurity after buying a house and having no savings.
Increased income by raising rates in day job and seeking higher-paying work.
Advocates for side hustles and online selling for additional income.
Started a YouTube channel as a side hustle, which eventually became profitable.
Avoided lifestyle inflation and remained debt-free except for a mortgage.
Bought a used car and paid off credit card bills in full to avoid interest.
Invested in stocks and ETFs after educating himself on investing.
Achieved $30,000 in investment earnings, which contributed to the second $100,000 savings.
Understands the power of compound interest and its role in long-term wealth building.
Set specific financial goals and focused on the 'why' behind them for motivation.
Encourages others to learn new skills, increase income, avoid debt, and invest to achieve financial goals.
Transcripts
so a few years ago I made a video
detailing how I managed to save $100,000
by the age of 25 while only earning
around minimum wage the entire time
though the process was pretty timec
consuming it was actually very simple I
started working when I was 17 and had
very few expenses and I stayed living at
home just paying a really cheap rent
pretty much equivalent to what I would
have been paying had I split a place
with two or three roommates I didn't go
to university so I didn't have any
student loans I drove a $4,000 car so I
didn't have a car payment and I only
used my credit card for things that I
could pay off entirely by the end of the
billing cycle so I stayed 100% debt free
the entire time I definitely allowed
myself to splurge on a few things here
and there the most notable of which was
that I got Levi around that time and of
course I was fully financially
responsible for him and all of his needs
and of course I still
am I also got a Macbook I bought a few
guitars I went to a handful of concerts
every year but other than those things I
saved pretty much every single dollar
that I made enough so that even though I
was only earning around $25,000 a year
after 8 years I was able to save up
$100,000 now that sounds like a lot of
money and it is a lot of money
especially for a 25-year-old but when
you break down $100,000 over 8 years
it's actually just a little more than
$11,000 a month which is not that crazy
at all and should actually be quite
doable for most young people who are
working full-time especially if they're
living at home for cheap or even for
free or even if they're they're renting
a cheap place with a few friends in fact
if I had invested that ,000 every month
I would have hit $1,000 way faster but I
had no idea how to invest back then
finally at the age of 26 my income
started to increase and I was able to
take that $100,000 and use it as a down
payment for a townhouse I lived in that
townhouse for 2 and a half years before
selling it for a pretty big profit which
I rolled into the down payment on this
house and I guess the rest is history as
they say all along while I was saving up
that money my intention was fully to use
it to buy a house but once I finally did
I felt like I was right back to square
one I had this house that I loved but no
money in the bank for the first time
since high school which was unsettling
to say the least I'd become accustomed
to having this gigantic safety net
behind me and for the first time in a
long time I didn't and I was also facing
at the exact same time a major increase
in my cost of living because I was now
out on my own and had a mortgage I was
responsible for oh I have three kids and
no money why can't I have no kids and
three money I wondered if I'd ever be
able to save up that kind of money again
but now less than 5 years later I can
say that I did it again I saved up
$100,000 but this time the process was a
little different here's what I did I got
to get off the floor first though
because my foot is completely asleep oh
my goodness all right that is better so
the very first thing I did should be no
surprise to anyone and that is that I
increased my income as I mentioned by
the time I was 26 my income finally
started to increase from from that
$25,000 I had been making pretty much
every year up to that point I still
wasn't making a ton of money by anyone's
standards but it felt like so much more
because I had been used to living on so
little for so long in the time since
I've continued to increase my income at
least a little bit every single year in
my day job I have the ability to
regularly raise my rates as I need to
for anybody who isn't self-employed
switching jobs every one to two years is
generally going to be the most powerful
way to dramatically increase your income
if you're already working in a
reasonably lucrative industry and if
you're not you got to go out and get
yourself a new skill and get the
credentials needed to get yourself into
one there's obviously a few ways you can
do this you can go through conventional
college degree program but that takes at
minimum four years and often tens of
thousands of dollars if not more and at
least in my opinion it's not always the
most practical way to go about it in a
lot of cases you're going to be much
better off going for something like an
online certification through a platform
like course careers it's way less
expensive it's much faster you can get
all the skills and qualifications you
need to land yourself a high-paying Tech
job I'll leave a link in the description
box down below if you guys want to check
out their free introductory course as
you guys know I'm also a huge fan of
side hustles my goal has always been to
be able to cover all of my basic living
expenses through my regular day job so
that anything I can earn over and above
that is money that I can save for the
last number of years my biggest side
hustle has been buying and selling
things online flipping things on like
Facebook Marketplace or Craigslist I
know I've talked about that on this
channel in the past I've bought and sold
a lot of musical instruments
predominantly but I've also sold other
things like computers camera gear kids
toys House wears realistically pretty
much anything you can find a good deal
on you can flip online for a profit of
course I also started this YouTube
channel which for the first two years
generated a grand total for me of
$0.0 and actually cost me money when you
consider that I had to buy a camera a
microphone some lights not to mention
the thousands of hours that I poured
into this Channel that I otherwise could
have spent working at a job and earning
money but I told myself early on that I
was going to give it three full years of
effort to see if anything happened
before I'd allow myself to quit and at
the end of the 2-year Mark I finally got
monetized and in the time since this has
blossomed into a nice little part-time
income for me even if this channel
hadn't taken off I would still be
flipping things online and seeking out
other sources of income nowadays when it
comes to side hustles there are so many
easy to access options things like
driving for Uber or door Dash or walking
dogs on Rover I actually made an entire
video just a few weeks ago going over
seven different things you can do to
increase your income dramatically I'll
leave a link to it Dr in the cards but
the point is if you want to save money
you got to find a way to increase your
income now the second thing I did which
was really important to help me Reach
This $100,000 saving Mark was that I
avoided lifestyle inflation and stayed
out of debt obviously I have a mortgage
now so I'm not entirely debt free but I
have still never paid a penny in credit
card interest actually that's not
totally true one time like 2 years ago I
forgot to pay my credit card bill until
like 3 minutes past midnight on the
night it was due and I want up getting
charged 11 cents in interest and I was
so mad not because of the 11 cents just
because of the principle like I had
broken my perfect streak so aside from
paying that 11 cents I've never paid any
credit card interest when my $4,000 car
eventually died I went and bought
another pre-owned car that I could pay
for entirely outright in cash and not
need a car loan for it's now 11 years
old and I'm still driving it and I
probably will for many years still to
come I think that carb is so ubiquitous
today that people don't even really put
any thought into it when they need to
get a car they just think about hey how
much can I afford to pay every month and
it's really bizarre to me because it
wasn't until a few years ago that I
realized that's how people buy cars
obviously I knew that car loans were a
thing I knew that people can Finance
cars I just didn't know that almost
everybody does even though I could
technically afford to go out tomorrow
and buy myself a brand new car of my
dreams and cash I just don't have any
interest in doing that I know that a car
is not something that's going to
dramatically improve the quality of my
life and therefore it's not something
that I'm willing to overspend on or go
into debt for as my income has increased
I definitely allow myself to splurge on
more things than I used to but they're
all things that are very well thought
out they're very intentional and most
importantly they're things I can
actually afford so I'm not putting
myself into debt for anything I will be
making an entire video very soon talking
about how I plan for and budget for
large purchases so I know some of you
guys have asked for that make sure you
subscribe so you don't miss out on it
the third thing that I've done third
thing that I've done which has been
really important is something I touched
on very briefly at the beginning of this
video but something that has really
helped me to get to this 100,000
Benchmark has been investing when I
saved that first 100K every single
dollar of it was a dollar that I had to
earn by working very hard because as I
mentioned before at that time I didn't
know anything at all about investing I
was so scared to make the wrong choice I
didn't know where to invest or how to
invest or what to invest into and when
you're only making like $10 to $15 an
hour the prospect of losing say even
$100 is gut-wrenching I didn't know
anything about stock or index funds or
ETFs or mutual funds I didn't really
know what any of that meant I also
didn't know what a risk tolerance was
and I didn't even know who to ask
because I kind of just assumed that all
the people who work at the banks are
just trying to sell you Investments and
they don't have a vested interest in you
actually doing well and uh well it turns
out that was a good guess because that's
entirely true we can put that check in a
money market mutual fund then we'll
reinvest the earnings into foreign
currency accounts with compounding
interest and it's
gone uh what it's gone it's all got but
I just didn't know what to do so I did
nothing retrospectively I wish so badly
that I had taken the opportunity to
educate myself about investing because
if I had I could have hit $100,000 so
much faster or in that same amount of
time instead of having 100,000 I could
have had1
150,000 but I didn't know what to do so
I did nothing and my savings grew at a
snails pace this time however everything
was different now that I know how to
invest I was able to actually take
advantage of that opportunity and get to
$100,000
much quicker because of this $100,000
that I've now saved I actually only
earned from my work about $70,000 of it
the other $30,000 is money that I earned
from my investments my money earned it
for me I didn't have to work for it it
was basically free money $30,000 of my
money was earned by my money rather than
by my labor and damn does that feel good
personally I do all my investing with
Mumu who was also kind enough to sponsor
this video Mumu is an all-in-one stock
trading app that's available both here
in Canada and in the US and it's where I
buy and trade all of my stocks and all
of my ETFs by using a registered account
like a tfsa or an RSP not only is your
money able to earn money for you but you
can actually benefit from the tax
advantages that each account offers even
in a non-registered account capital
gains are taxed at 50% compared to
employment income here in Canada which
means that investing is one of the
absolute best ways to not only increase
your income but to build long-term
wealth with Mumu you can buy and trade
Canadian and US stocks and ETFs with
some of the lowest fees around so it's
the best way to start investing in the
largest and most profitable companies in
the stock market for new Mumu users in
Canada if you sign up using my link in
the description box down below and
deposit $100 into your account Mumu will
instantly give you a $50 bonus that's
$50 totally for free and if you deposit
$5,000 into your account Mumu will give
you $100 for free or you can receive an
Apple gift card worth up to $1,200 and
for everyone in the US signing up for
Mumu with my link and depositing $100
will give you seven free fractional
shares of a top stock bundle once again
that's free money just click the link in
the description box down below to get
started and thank you very much to Mumu
for sponsoring this video the best part
of investing really starts to come when
you fully understand compound interest
if I left my $100,000 invested and never
touched it again never added to it just
totally left it alone in 30 years it
would be worth over a million and in 40
Years it' be worth over $2.5 million
which means that as long as I never
touch or spend this money I am now
basically guaranteed to retire a
millionaire that's really crazy under
any circumstances but especially when
you remember that I only have to work
for and save up $70,000 of this money
and now that $70,000 could potentially
turn into $2.5 million and once again if
you break up that $70,000 that I've
saved over the last 5 years that I've
saved it it works out to a little bit
more than $1,000 a month which is not as
Out Of Reach as most people tend to
think it is more specifically it's
$114,000 a year or $269 a week or a
little over $38 every day if you can
save just $38 a day every day for 5
years you'll retire a millionaire that's
that's it $38 a day will turn you into a
multi-millionaire and finally the thing
that I think is probably the most
difficult but also the most important
that has allowed me to save $100,000 not
just once now but twice was setting very
specific goals I talked about this in
the video about saving my first 100K and
it's every bit as relevant now as it was
back then I think the number one reason
that people don't achieve their goals is
because they don't actually have a goal
or their goal is arbitrary but they
don't have a why behind their goal to
keep them motivated deciding that you're
going to save a random amount of money
is not going to keep you motivated
unless you have a very specific idea of
what you plan to do with that money
because otherwise money in itself is
just not that exciting it's a number on
a screen the goal shouldn't be to save
$11,000 or $10,000 or $100,000 the goal
should be I'm going to save this amount
of money because I want to do this very
specific thing with it the first time
around for me that was a house and I
wanted a house more than anything else
in the world which made it very easy for
me to not spend my money on other things
at no point did I feel like I was
depriving myself when I said no to
spending money on something because on
the contrary I felt like if I said yes
to things I was robbing myself of the
opportunity to get a house which is
really all that I wanted saying no was
easy despite the fact that I'm a natural
saver and despite the fact that I have
obviously whole YouTube channel about
money the truth of the matter is that I
don't really care much about money at
all I see money as a tool and tools
aren't very useful if you don't actually
plan to build things with them my goal
the first time was not to save $100,000
it was to buy a house and this time
obviously I have a house but once again
my goal has not been to save
$100,000 it's been to work towards an
early retirement or at least the option
of an early retirement I want to save up
enough money that at some point in the
next few years I could decide to stop
working full-time if I wanted to I'm not
even necessarily saying that I will but
I want the option to do so I want to be
able to only take on projects that
excite me I don't want to feel obligated
to do things I don't want to do just
because I need the money and I want to
have the freedom to invest my time into
the things that I like without being
tied to a 40-hour work week and to be
perfectly clear $100,000 is not enough
money to do that at least not for any
significant length of time when I'm only
in my early 30s right now I would blow
through that money very quickly if I
deci decided to stop working but that's
why saving $100,000 has not been my goal
my goal has been to be able to wake up
in the morning and decide in that moment
how I want to spend my day without
having any sort of obligation to anyone
or anything else and that to me is a
strong motivator that to me is so much
more appealing than anything I could buy
today so whatever your financial goal is
whether it's to pay off your debt or buy
a house or retire early or whatever else
Stokes your engine know that you can do
it learn a new skill get a better job
start a side Hustle do whatever you can
do to increase your income once your
income increases avoid lifestyle
inflation and stay out of debt educate
yourself about investing and learn to
leverage compound growth to your
advantage and most importantly know your
why think about it every day write it on
your bathroom mirror tattoo it on your
forehead keep it front and center in
your mind think about how much better
your life is going to be when you've
accomplished that thing whatever that
thing is to you and if you stick to this
formula you really can't lose drop me a
comment down below and and let me know
what your goal is and why what exactly
is it that you're working towards and
what steps are you taking to get there
all of the resources that I mentioned in
this video will be linked in the
description box down below for you guys
to check out if you enjoyed this video
at all please go ahead and hit that like
button subscribe if you haven't done so
yet you can follow me on Instagram all
that normal good stuff take care I'll
see you next week go find your why have
a good one guys
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