3 Bad Habits Holding You Back from Financial Freedom

Summary

In this video, Ali, a former doctor turned entrepreneur, discusses three detrimental habits that may impede one's journey to financial freedom. He emphasizes the importance of recognizing the skill involved in building assets and businesses, taking action despite being busy, and intentionally designing an environment that supports and accelerates one's financial goals. Ali also highlights the role of continuous learning and the significance of surrounding oneself with like-minded individuals to maintain motivation and share insights on the path to financial independence.

Takeaways

• 😀 Financial Freedom is defined as a state where passive income exceeds one's burn rate, meaning more money comes in without work than is spent.
• 🚀 There are two main paths to financial freedom: the slow lane, involving saving and investing over a long period, and the fast lane, which involves building a business or asset to generate passive income.
• 📚 Building wealth is a skill that can be learned and developed over time, not just a matter of luck. It's important to invest time in learning about business and asset building.
• 📈 The 'slow lane' to financial freedom involves traditional methods like saving, investing in property or the stock market, and using the 4% rule for safe withdrawal from investments.
• 🛤️ The 'fast lane' is a more aggressive approach that may still take around 10 years, focusing on creating a business or valuable asset to generate significant passive income.
• 💡 To begin the fast lane journey, one must first recognize the need to learn the skills involved in building businesses and assets, and not remain ignorant of this requirement.
• 📱 Utilizing tools like Trading 212 can aid in investing and managing finances effectively, offering commission-free stock trading and cash back rewards.
• 🎯 Setting aside dedicated time for learning and taking action towards financial goals is crucial, even when life is busy with other commitments.
• 🏋️‍♂️ Taking action is essential; merely consuming content about financial freedom without applying the knowledge will not lead to success.
• 🌐 Designing your environment to include like-minded individuals on the path to financial freedom can provide support, motivation, and shared learning experiences.
• 🔄 Overcoming 'environmental inertia' means actively seeking out and creating an environment that fosters progress towards financial freedom, rather than passively letting circumstances dictate your path.

Q & A

What are the three bad habits discussed in the video that could be holding someone back from achieving financial freedom?

The three bad habits discussed are the habit of ignorance (not recognizing the skill required to build assets and businesses), the habit of inaction (not taking steps towards financial freedom despite understanding the path), and environmental inertia (failing to intentionally design one's environment to support the journey to financial freedom).

What is the definition of financial freedom according to Professor Scott Galloway mentioned in the video?

Financial freedom is defined as a state where your passive income exceeds your burn rate, meaning more money is coming in without you having to work for it than what you are spending.

What are the two main levers one can pull to achieve financial freedom as per the video?

The two main levers are increasing the amount of passive income coming into your life or decreasing the amount of money that you're spending.

What is the slow lane path to financial freedom as described in the video?

The slow lane path involves having a job, generating income, saving and investing that income over a long period, and eventually using a safe withdrawal rate like the 4% rule from investments to cover lifestyle costs.

What is the fast lane path to financial freedom according to MJ DeMarco's book 'The Millionaire Fast Lane'?

The fast lane path is about building an asset or business that generates passive income. This approach is faster than the slow lane but still takes about 10 years and involves actively creating and growing a business or asset.

What is the role of luck in achieving financial freedom according to the video?

While luck is involved in all aspects of life, the ability to build businesses and assets is a skill, and success in achieving financial freedom is largely due to the development and application of this skill.

How does the video suggest one should learn the skill of building businesses and assets?

The video suggests investing time to read books, listen to audiobooks, podcasts, and watch YouTube videos about building businesses. It also recommends learning from the experiences of successful entrepreneurs.

What is the importance of taking action according to the video?

Taking action is crucial because it is the step that moves one from learning about the skill to actually applying it and making progress towards financial freedom.

Why is it important to design one's environment when pursuing financial freedom?

Designing one's environment is important because it can provide the necessary support, inspiration, and motivation that can help sustain the journey to financial freedom, especially during moments of low motivation.

What is the significance of surrounding oneself with like-minded individuals on the journey to financial freedom?

Surrounding oneself with like-minded individuals speeds up the process to financial freedom by providing a support network, shared experiences, and a community that understands and supports the journey.

What is the role of a service like trading 212 in the context of the video?

Trading 212 is mentioned as a tool for investing in stocks and shares commission-free, which can be part of the strategy for increasing passive income on the path to financial freedom.

Outlines

00:00

💼 Introduction to Financial Freedom

The video begins with the host, Ali, introducing the topic of Financial Freedom and sharing his journey from being a medical student to a financially free entrepreneur. Ali emphasizes the importance of understanding Financial Freedom as a state where passive income exceeds one's burn rate. He discusses two approaches to achieving this: the slow lane, which involves traditional saving and investing over a long period, and the fast lane, which is about building assets or businesses to generate passive income. Ali's focus is on the fast lane approach, aiming to help viewers reach Financial Freedom sooner rather than later.

05:01

📚 The Skill of Building Assets

Ali stresses that building assets and businesses to achieve Financial Freedom is a skill that can be learned. He dispels the myth that it's purely about luck and highlights the importance of education in this area. The host suggests various resources, including books, podcasts, and YouTube videos, to learn about business building. He also introduces the concept of bad habit number one: ignorance, where people either don't recognize the need to learn this skill or fail to invest time in acquiring it. Ali promotes the use of a service like trading 212 for investing and managing finances, which is sponsoring the video, and encourages viewers to take action by learning from successful entrepreneurs.

10:02

🏃‍♂️ Overcoming Inaction for Financial Freedom

The second bad habit discussed is inaction, where individuals consume content about Financial Freedom but never take steps to apply what they've learned. Ali emphasizes the need to carve out dedicated time for working on one's business or asset, regardless of other life commitments. He provides examples of how busy individuals can allocate specific time slots for their entrepreneurial pursuits. The host also touches on the importance of taking action and not just learning, as the latter alone will not lead to Financial Freedom.

🌐 Breaking Environmental Inertia

The final paragraph addresses the third bad habit: environmental inertia, which refers to the tendency to stay in one's comfort zone without making efforts to change the environment for the better. Ali talks about the importance of designing one's environment to include people and inspirations that support the journey to Financial Freedom. He suggests actively seeking out networks, events, and communities of like-minded individuals to create a supportive ecosystem. The host concludes by encouraging viewers to take away actionable insights from the video and to engage with other resources for a comprehensive understanding of the path to Financial Freedom.

Keywords

💡Financial Freedom

Financial Freedom is defined by Professor Scott Galloway as a state where one's passive income exceeds their burn rate, meaning more money is coming in without active work than is being spent. It is the central theme of the video, representing the goal of having the autonomy to choose how to spend one's time without financial constraints. The script discusses various paths to achieve this state, emphasizing the importance of both increasing passive income and decreasing lifestyle costs.

💡Passive Income

Passive income refers to earnings that are generated without the need for continuous active work. In the context of the video, it is one of the two levers, alongside reducing costs, that can lead to financial freedom. Examples given include income from investments, property rentals, or businesses that operate without the owner's constant involvement.

💡Burn Rate

Burn rate is the rate at which a business or individual spends financial resources to maintain its operations. It is used in the script to contrast with passive income, indicating the level of spending that one's passive income must exceed to achieve financial freedom.

💡Skill

In the video, skill is portrayed as a critical factor in building businesses and assets that lead to financial freedom. It is not just about luck but about the ability to apply knowledge and experience effectively. The script emphasizes that skills can be learned and honed over time, as illustrated by the speaker's own journey and the recommendation to read business books and listen to podcasts.

💡Fast Lane Path

The fast lane path is one of the two routes to financial freedom discussed in the script, alongside the slow lane path. It involves actively building a business or asset to generate passive income, rather than relying solely on savings and investments. The video encourages viewers to pursue the fast lane approach to achieve financial freedom more rapidly.

💡Slow Lane Path

The slow lane path is described as a more traditional and slower route to financial freedom, involving saving and investing income from a job over a long period. The script contrasts this with the fast lane path, suggesting that while it is a valid approach, it may not be as appealing to those who wish to achieve financial freedom sooner.

💡Action

Action is highlighted in the script as a necessary component of achieving financial freedom. It refers to the steps taken to implement the knowledge and skills acquired, such as starting a business or investing. The video warns against the habit of inaction, where individuals consume content about financial freedom but fail to take concrete steps towards it.

💡Inertia

Inertia, in the context of the video, refers to the tendency to maintain the status quo or to not actively work towards financial freedom. It is associated with environmental inertia, where one does not make an effort to change their surroundings or associate with like-minded individuals, which can hinder progress towards financial freedom.

💡Environment

Environment, as discussed in the script, plays a crucial role in an individual's journey towards financial freedom. It is not just the physical surroundings but also the social network and the influences that can either support or hinder progress. The video encourages designing an environment that fosters motivation and provides a support system.

💡Habit

Habit is a recurring theme in the script, with three bad habits identified as potential barriers to financial freedom: ignorance, inaction, and environmental inertia. The video suggests that recognizing and changing these habits is essential for progress, emphasizing the importance of developing good habits that support the goal of financial freedom.

💡Learning

Learning is presented as a foundational habit for achieving financial freedom. It involves acquiring knowledge and understanding the strategies and skills necessary to build wealth. The script encourages continuous learning through books, podcasts, and other resources to gain insights into different paths to financial freedom.

Highlights

The video discusses three bad habits that could be hindering financial freedom.

Ali, a former doctor turned entrepreneur, shares his 15-year journey to financial freedom.

Financial freedom is defined as a state where passive income exceeds one's burn rate.

Two key levers to financial freedom are increasing passive income and decreasing spending.

The slow lane to financial freedom involves saving and investing over a long period.

The fast lane to financial freedom is building assets or businesses that generate passive income.

Bad habit number one is ignorance of the skill required to build assets and businesses.

Learning about building businesses is essential but not sufficient for achieving financial freedom.

Sponsor mention: Trading 212 app for commission-free investing and cash Isa with high annual yield.

Bad habit number two is inaction, despite understanding the path to financial freedom.

The importance of carving out dedicated time to take action on the journey to financial freedom.

Bad habit number three is environmental inertia, not intentionally designing one's environment for success.

The value of surrounding oneself with people on a similar journey to financial freedom.

Creating a network of entrepreneurs can help maintain motivation and progress towards financial freedom.

The video ends with a call to action for viewers to reflect on their journey and seek further resources.

Transcripts

all right so in this video we're going

to be talking about three bad habits

that could potentially be holding you

back from getting to Financial Freedom

now if you're new here hi my name is Ali

I'm a doctor turned entrepreneur and for

the last 7 years I've been documenting

the journey on this YouTube channel

starting off as a medical student making

videos helping students study for exams

and eventually building a business to

the point where I am financially free

now for me that Journey has been very

long and very windy and I've been trying

to get to Financial Freedom for the last

15 years and it took me maybe 12 years

to get to the point of Financial Freedom

so I'm hoping but that by watching this

video video and the other videos on my

channel where we talk about this stuff

you able to shortcut that process so

we're going to talk about three bad

habits that are potentially holding you

back but before we do that let's talk

about how should we even think

philosophically about what Financial

Freedom is and how do we get there all

right so what is Financial Freedom well

I really like Professor Scott Galloway's

definition which is Financial Freedom is

when your passive income exceeds your

burn rate I.E there is more money coming

in without you having to do stuff then

there is money that you are spending

this means that if you want to be

financially free you've kind of got two

levers to play with you can increase the

amount of passive income you you have

coming into your life or you can

decrease the amount of money that you're

spending and ideally you would do some

sort of combination of the two things

and you probably won't want to retire

and just not do anything because that

gets boring after a while and then

people who who retire get depressed and

have heart attacks and stuff but you'll

have the freedom and the ability to do

what you want when you want with whom

you want and you will probably realize

that you want to do work of some sort

but you'll have the freedom to choose

what sort of work you're actually doing

and that's really the true value of

Financial Freedom so that then sort of

begs the question how do you arrive at

this point at Financial Freedom where

you're increasing your passive income

and that passive income is greater than

your costs well based on this equation

we can basically see that there are two

levers you can pull you can decrease

your costs or you can increase your

passive income now broadly there are

actually two paths to this MJ DeMarco in

his book The Millionaire fast lane which

is a good book says there's the slow

lane path and then there is the fast

lane path and even fast lane for the

record he defines as being about 10

years long so that's considered fast in

this world so the slow lane path is

where you have a job and your job

generates income and then you put that

income into savings or into Investments

or into slowly buying out a property

every now and then or maybe putting it

in a stock market index fund like the

S&P 500 and

eventually um you use what's called a 4%

rule which is that let's say you end up

having a million pounds in the S&P 500

which is the stock market index fund you

can withdraw 4% of that safely every

year without touching the principal so

your passive income in that case would

be 40K per year now if you can live on

less than 40K per year inflation

adjusted etc etc uh now you are

financially free because your passive

income has exceeded your lifestyle costs

this is the slow lane path this takes a

very long time to get there and there is

an alternative approach the alternative

approach is the fast lane path and the

fast lane path is where you really

figure out can I build some sort of

asset or can I build some sort of

business the slow way of getting to

Financial Freedom is by having a job and

by Saving and investing well and doing

that over a very long period of time the

faster way which still probably takes

about 10 years is to build some sort of

asset or to build some sort of business

and so in this video I really want to

focus on this fast lane approach there

are other videos and we might do one in

the future that that is aimed at people

where the goal is you know what I just

want to have a job and I want to put

aside 20% of my income into Investments

and 20 years from now I will then be

financially free to me that that doesn't

hold much appeal cuz I don't really want

to be financially free when I'm 50 I'd

like to be financially free when I'm 30

or 35 or 28 or 25 or 23 or whatever the

thing might be really I'd like to be

financially free as soon as possible

because then I'm able to use my time

which is my most valuable non-renewable

resource on things that I actually want

to use my time on rather than

necessarily on my day job which if I was

able to design my life however I wanted

chances are I wouldn't do the day job

that I'm currently doing so the goal

really is the fast lane approach to

Financial Freedom how do we build an

asset or business that boosts a passive

income while keeping a l talk cost

reasonably low so that we can get to

this equation for Financial Freedom and

so in this video I want to talk about

three bad habits that are holding you

back from this fast lane approach that

hold a lot of people back uh the first

one is what's the first

one all right so let's talk about bad

habit number one now if we understand

this equation we know that the goal is

to build some sort of asset that gives

us enough passive income such that we

can feel financially free and the the

way we do this is a skill

it is a skill it is not luck of course

luck is involved as with everything in

life but the ability to build businesses

and assets is a skill if you were to

take all of Elon musk's money and

connections and stuff away he would

probably become financially free fairly

quickly because he has the skill of

building businesses and assets and think

with me I have less of a skill of

building businesses and assets than Elon

Musk does but I've been trying to make

money on the internet and building

businesses for about 15 years of my life

now so I would say I have the skill so

if I were to lose all of my money and

all my clout and all my fame and my

YouTube channel and everything I suspect

within a year I would probably be able

to get to a point of Financial Freedom

because I have the skill of building

assets and businesses that I've

developed over the last 15 years now

given that this is a skill um I think

this is one key important thing to keep

in mind that a lot of people who aspire

to Financial Freedom just don't

appreciate that the skill of building

these assets is a skill and like all

skills skills can be learned and so

really bad habit number one is the habit

of ignorance where you a don't recognize

that it is a skill to build assets and

businesses to get to Financial Freedom

and B even if you do realize that you're

just not putting in the time to absorb

the stuff that will give you a sense of

what this map is but one good Financial

habit that you can start right now is

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and let's get back to it so how do you

learn about the skill well you carve out

time in your day to read books to listen

to audiobooks to listen to podcasts to

watch YouTube videos about building that

skill of building businesses on my

podcast for example there's a bunch of

videos I've done with other

entrepreneurs where they break down the

exact methods they used to grow

multimillion dollar businesses and to

become financially free similarly there

are a bunch of books uh there's million

dollar weekend by Noah Kagan there's

millionaire fast by MJ DeMarco there's

uh Cody Sanchez and hasba coming out

that's very good make epic money by Anu

waraku just looking around at my like

there's Doom Secrets by Russell Brunson

there's anything but Alex hosi there are

literally hundreds and hundreds probably

thousands maybe even tens of thousands

of business books out there lots of them

are on Audible you can listen to them in

audio book format how many of those have

you read if you're like most people I

speak to about Financial Freedom the

answer is probably not very many I'd say

maybe about 80% of people don't really

read enough or listen enough or watch

enough stuff about building the skill of

building businesses oh by the way if

you're enjoying this video so far you

might like to check out my book Feelgood

productivity it's about how to do more

of what matters to you in a way that's

enjoyable meaningful and sustainable and

a big part of this journey to Financial

Freedom is finding the time and energy

to actually do the things that will help

us on our route to Financial Freedom so

you can check this out it's on Kindle

it's on Audible it's on hardback you can

listen to it in the car in your spare

time I hope you'll get some value from

it and so at this point some people

might be saying that like okay well it's

a skill but you can't get the skill just

from learning about it and yes that's

true you cannot just get the skill by

just listening and learning and reading

and all all that kind of stuff you have

to take action as well but essentially

what the learning does is that it gives

you a firmware update in your own mind

it lets you see what the map looks like

it's like imagine you're navigating a

forest and the destination you're trying

to get to is this destination of

Financial Freedom but it's like this

dark forest and there's a lot of fog and

you don't know what's going on you don't

know what the map to that destination

looks like but when you listen to

podcasts where entrepreneurs who have

made millions of dollars are breaking

down exactly the path that they followed

it's like oh okay that's one route to

Financial Freedom you would listen to

another podcast where someone breaks

down how they built a ghost writing

agency to get to a million dollar a year

oh okay there's another path you would

watch a YouTube video where someone like

me talks about how I got to Financial

Freedom through the vehicle of a YouTube

channel and that's another path and the

more you read and listen to and absorb

this sort of stuff the more you'll

realize that the pathway from where you

are right now to where you want to be

which is probably Financial Freedom if

you're watching this video you'll

realize that oh there's all of these

different paths to getting there and

then you can decide which of these paths

do I want to take action on you don't

need to know what are 100 different

paths to get to Financial Freedom but

it's useful to appreciate maybe like 10

what are 10 different ways where you

could theoretically start from where you

are right now and get to the goal of

Financial Freedom within a time frame

that seems reasonable to you and you do

that by reading by listening to by

watching stuff and once you have those

10 at that point you can move on to

Habit number two which is we've talked

about how you can get a sense of what

this map is based on the learning but

bad habit number two is where even when

you do have a sense of what this map is

you decide to stay exactly where you are

and you don't decide to go on this

journey you don't take action bad habit

number two is the habit of inaction

there are a lot of people I know who

want who aspire to Financial Freedom who

don't do any learning about it at all

but then there's also quite a lot of

people who do aspire to Financial

Freedom but who are stuck in this sort

of paradox of just consistently

consuming content and never actually

taking any action maybe you're in that

boat if you're watching this video maybe

you've seen all of my videos about

Financial Freedom maybe you've listened

to my podcast maybe you've read these

books that I've mentioned maybe you've

been watching every video that Alex

homos has ever put out but maybe you

haven't actually taken that first step

to try to make your first dollar on the

internet maybe you're not carving out

the time to actually take action on the

thing now how do you do that how do you

do that if you're busy if you're maybe

you're a student and you've got stuff to

do in the day maybe you've got a

full-time job so you have stuff to do

during the day maybe you're a parent

you've got kids so you've got stuff to

do during the day and like not even

during the day firstly it's important to

realize that almost everyone who ends up

becoming financially free very few of

them got there by having a completely

empty Cali calendar and they just had

swats and swads of spare time and that's

how they were able to build to build

that business mostly you know I've

interviewed probably hundreds of people

at this point who are financially free

they were all busy they all had life

commitments family commitments job

commitments the whole shebang and they

found a way to build this asset or build

this business if they're going down the

fast lane approach in their spare time

so what might this look like in the case

of one of my friends uh what he does is

that he carves out Monday and Tuesday

evening after work every every week

without fail to work on his YouTube

channel and his courses business because

he has decided that YouTube channel plus

selling a course is the vehicle that he

wants to do to get to Financial Freedom

if a friend says hey do you want to hang

out on Monday evening he's like nope

sorry I'm busy that evening he does

Wednesday Thursday Friday Saturday and

Sunday to hang out with friends but

Monday and Tuesday evening is carved out

for work on the YouTube channel and work

on the course alternatively you might

decide that an hour every morning before

work is the amount of time you are

carving out to work on your dream of

Financial Freedom that is the time you

are going to spend taking action it's

not the time you're spending learning

the skill because you can learn the

skill while doing the laundry while

doing the watching while commuting to

work you can listen to stuff you can

watch videos in those spare moments

throughout the day but it's those

concerted hourong at least blocks of

time where you're actually taking action

and actually trying to build the thing

so many people aspire to Financial

Freedom very few people put in the time

because if you look at someone's

calendar and you see what they spend

their time actually doing for most

people who aspire to Financial Freedom

you'll probably find that the calendar

does not reflect this goal of Financial

Freedom and then finally we come to bad

habit number three and this is a habit

that I like to call environmental

inertia inertia is sort of where you

just let things happen as they already

happening you're sort of operating with

the default mode now we've talked about

how an important Habit in getting to

Financial Freedom is learning the skills

and appreciating what the map looks like

we've talked about taking action but

there's a third aspect which is

intentionally designing your environment

so that you're able to come into contact

with people and with inspiration that

will help you out on your journey you

know one of the easiest ways to get to

Financial Freedom or rather to speed up

your process in getting to Financial

Freedom is to surround yourself with

people who are also on that Journey now

these people might be exactly where you

are on that Journey there might be a

couple of steps in front of you there

might be a couple of steps behind you

but if you have friends colleagues

relatives a network if you have people

around you who are also on the journey

to Financial Freedom you are all more

likely to make it because you all

benefit from this compounding effect of

the people that we have around us people

around us give us a lot of energy it

like means that when motivation dips

which it always does on this journey to

Financial Freedom it's not really a

straight line it's more like a s way for

motivation waxes and wains in those

moments where you're feeling down where

your business isn't working you just got

rejected from a sales call that you did

your YouTube video absolutely flopped no

one bought your course all of that stuff

you have people around you who

understand they get the journey that

you're on if all of the friends that you

have are people who have normal jobs and

who do not aspire to Financial Freedom

chances are you will find it very

difficult to go on that Journey on your

own it is a lot easier to go on that

Journey when you're with other people so

environmental inertia is when you're not

putting any effort into designing your

environment you're not putting any any

effort into going to events for aimed at

entrepreneurs or aspiring entrepreneurs

you're not putting any effort into going

to classes you're not putting any effort

into going to meetups you're not putting

in any effort to reach out to people in

your local area through Twitter or

Instagram who you might be able to send

a cold message to be like hey you know

you're an entrepreneur I I am as well

I've checked out what you're doing would

you like to grab coffee or lunch

sometime creating this network of other

entrepreneurs other people trying to

build assets and businesses on this fast

lane to Financial Freedom I think is one

of the biggest things you can do to

massively shortcut your process of

getting there and to ensure that you

don't allow the dips in motivation to

completely stall your progress on this

journey now if you Vibe with this video

firstly I would love to hear a comment

in terms of if you're at this point what

is one action point you're taking away

from this video on your journey to

Financial Freedom and secondly if you

want a whole video where I break down

the journey and more detail you should

check out this video over here which is

my honest advice to someone who wants

Financial Freedom and in that video I

recommend a bunch of different resources

that you can use to also improve your

odds of getting to Financial Freedom so

thank you so much for watching have a

lovely day and I'll see you in the next

video bye-bye