14 money habits that make me $$$$ (everyone should do this)

Summary

In this video, the creator shares their personal wealth-building philosophy, emphasizing the importance of time, saving, and smart spending habits. They advise avoiding lifestyle inflation and avoiding debt, focusing instead on investing early and developing high-income skills. The creator reflects on their journey, from frugal habits in their early twenties to achieving financial freedom through careful budgeting, saving, and making money work for them. They discuss the significance of investing in safe assets like S&P 500 ETFs, avoiding depreciating assets, and the mindset required to reach financial goals. Ultimately, they encourage viewers to adopt a mindset of financial empowerment and long-term growth.

Takeaways

• 😀 Focus on building a wealth mindset, not spending to impress others or keeping up with appearances.
• 😀 Start early to take advantage of compound interest—time is a key factor in building wealth.
• 😀 Invest in high-income skills; don't rely solely on a 9-to-5 job to grow your wealth.
• 😀 Aim to save a large portion of your income in your younger years to accumulate wealth for future investments.
• 😀 Avoid unnecessary spending; always ask yourself if you need something before buying it.
• 😀 Only purchase an item if you can afford to buy it four times over. This ensures financial discipline.
• 😀 Resist lifestyle inflation—don’t increase your spending just because your income rises.
• 😀 Living frugally in your early years can give you the financial freedom to take risks and start businesses later.
• 😀 Avoid debt, especially high-interest debt like credit cards. Pay off debt quickly to prevent interest accumulation.
• 😀 Be cautious with credit cards; only use them if you can pay off the balance in full each month and consider the benefits of points and credit score building.

Q & A

What is the key mindset for building wealth according to the speaker?

The key mindset is to avoid spending money to impress others or keeping up with the Joneses. Instead, focus on saving and investing wisely, using time to your advantage for compounding wealth.

Why is time considered a crucial factor in building wealth?

Time is crucial because of the power of compound interest. Starting early allows money to grow exponentially, increasing wealth over time.

What does the speaker mean by 'high-income skills'?

High-income skills refer to specialized abilities that allow you to earn significantly more than a standard 9-to-5 job. These skills should be leveraged to increase your income and financial freedom.

What was the speaker's approach to saving money in their early 20s?

The speaker saved 70-80% of their income between the ages of 18 and 22, using the principle of accumulating wealth early to benefit from time and compound interest.

What advice does the speaker give about credit card use?

The speaker advises only using credit cards if you can pay off the balance every month. Credit cards can help build credit and offer rewards like points, but they can be dangerous if not managed properly.

How does the speaker define 'lifestyle inflation' and why is it important to avoid?

Lifestyle inflation occurs when people increase their spending as their income rises. It's important to avoid because it can lead to living beyond one's means, preventing long-term wealth accumulation.

What does the speaker suggest about investing and why?

The speaker suggests investing in safe options like the S&P 500 ETFs, as they average a return of 8-10% annually. The goal is to avoid leaving money in the bank, as inflation will reduce its value over time.

What is the speaker's stance on buying a house as an investment?

The speaker does not view buying a house as a strong investment unless it's used to generate rental income. While houses appreciate over time, they don't generate cash flow unless rented out.

What are some of the habits the speaker credits for their financial success?

The speaker attributes their financial success to living frugally in their early years, saving a high percentage of their income, and maintaining a disciplined approach to budgeting and spending.

How does the speaker view debt, especially in relation to student loans and credit cards?

The speaker strongly advises avoiding debt, particularly high-interest debt like credit cards. They paid off their student loans quickly to avoid accumulating interest and encourage others to do the same.