How I Saved $100k in 5 Years

Summary

The 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

00:00

💼 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.

05:01

📈 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.

10:02

🚀 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.

15:02

🌟 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.

Keywords

💡Minimum Wage

Minimum wage refers to the lowest hourly, daily, or monthly remuneration that employers are required to pay workers in a particular political jurisdiction. In the video, the speaker mentions earning around minimum wage throughout their early working years, emphasizing that despite this, they were able to save a significant amount of money by living frugally and managing expenses effectively.

💡Debt-Free

Being debt-free means not having any outstanding loans or debts that one must repay. The video's speaker highlights staying 100% debt-free as a key strategy in their financial journey, which involved not taking on student loans, car payments, or credit card debt, and only using a credit card for expenses that could be paid off in full each billing cycle.

💡Lifestyle Inflation

Lifestyle inflation occurs when an individual's spending increases in proportion to their income, rather than maintaining a consistent standard of living or saving a higher percentage of income as earnings grow. The speaker warns against lifestyle inflation, advocating for maintaining a controlled spending habit even as their income increased, which was crucial in saving up $100,000 for the second time.

💡Side Hustle

A side hustle is a part-time job or a secondary income-generating venture that one engages in alongside their primary employment. The video discusses the speaker's side hustle of buying and selling items online, which contributed to their ability to save money. This is an example of diversifying income streams to achieve financial goals.

💡Investing

Investing involves allocating money with the expectation of generating an income or profit, often with the potential for capital appreciation. The speaker regrets not investing earlier but later leverages investing to grow their savings significantly, with $30,000 of their second $100,000 coming from investment returns, illustrating the power of compound interest and long-term wealth building.

💡Compound Interest

Compound interest is the interest on a loan or deposit calculated based on both the initial principal and the accumulated interest from previous periods. The video explains how understanding and leveraging compound interest can turn a modest initial investment into a substantial sum over time, as exemplified by the potential growth of the speaker's $100,000 investment to over $2.5 million in 40 years.

💡Financial Goals

Financial goals are specific, measurable objectives related to an individual's personal finances, such as saving a certain amount, purchasing a home, or retiring by a specific age. The video emphasizes the importance of setting clear, specific financial goals and having a 'why' behind them to stay motivated and focused, as the speaker did with their goal to buy a house and eventually achieve early retirement.

💡Safety Net

A safety net refers to a financial reserve or a system of backup plans that provide security against unforeseen events or financial hardships. The speaker describes the feeling of losing their 'safety net' after using their savings to buy a house, which was unsettling but also a catalyst for them to save another $100,000.

💡Income Increase

An income increase refers to a rise in one's earnings, which can come from promotions, switching jobs, or raising rates in self-employment. The video's speaker discusses how their income began to increase at the age of 26, which allowed them to save more aggressively and eventually re-accumulate $100,000.

💡Budgeting

Budgeting is the process of creating a plan to manage one's income and expenses, ensuring that spending aligns with financial goals. While not explicitly mentioned in the transcript, the concept of budgeting is implied in the speaker's disciplined approach to saving and avoiding lifestyle inflation, which is essential for achieving their financial goals.

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

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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