How I Built a $400k Net Worth By 28 (Thanks to Market Crashes)

Summary

This video outlines a personal financial journey, focusing on the lessons learned through market crashes, career growth, and smart investing strategies. The individual shares how they leveraged the COVID market crash to make profitable investments, switched jobs for higher salaries, and built multiple income streams through side hustles like reselling and YouTube. Key takeaways include the importance of patience in investing, managing lifestyle inflation, and balancing career with personal fulfillment. The video emphasizes entrepreneurship, long-term wealth building, and setting realistic goals for financial independence.

Takeaways

• 😀 The COVID-19 market crash in 2020 created a significant opportunity to buy stocks at low prices, leading to substantial investment growth.
• 😀 Staying emotionally grounded during market downturns and taking a long-term view allowed the individual to turn a challenging period into financial success.
• 😀 Despite increasing income, maintaining a frugal lifestyle allowed for consistent investing without accumulating major debt or lifestyle inflation.
• 😀 Maxing out tax-advantaged accounts like 401k, Roth IRA, and HSA provided significant financial benefits, including tax savings and preparation for future medical expenses.
• 😀 Transitioning jobs can provide significant raises, as the individual earned a 25-30% raise by switching to a higher-paying software engineering position.
• 😀 Continued investments in safer assets, including dividend ETFs and large-cap stocks, helped weather market fluctuations and contributed to growing net worth.
• 😀 The shift from focusing solely on career success to pursuing entrepreneurial goals, including starting a YouTube channel, highlighted the importance of personal fulfillment.
• 😀 Despite a high salary and impressive investments, the individual experienced burnout and began to prioritize life satisfaction and personal projects.
• 😀 Starting small with investments and side hustles early on could have provided more wealth and experience in hindsight, as the individual wished they had started earlier.
• 😀 Achieving financial independence is possible by diversifying income sources, including dividends, side hustles, and YouTube monetization, all while managing expenses effectively.
• 😀 The individual plans to continue growing income streams, explore entrepreneurship, and ultimately create enough wealth to support a family and provide long-term stability.

Q & A

What role did the COVID-19 market crash play in the narrator's financial journey?

The COVID-19 market crash provided the narrator with an opportunity to buy stocks at low prices, particularly in major indices like the S&P 500, Dow, and NASDAQ. By controlling their emotions during this time and making smart investments, the narrator was able to significantly grow their wealth, eventually reaching over $200K in their investment portfolio.

How did the narrator manage their lifestyle while increasing their income?

Despite earning a higher salary, the narrator kept their lifestyle the same by living with their parents. This allowed them to invest the extra income into their investments without taking on large personal expenses or debt.

What impact did the narrator's career progression have on their investments?

As the narrator's career progressed and they received promotions, their income increased, which allowed them to invest more each month. They maximized tax-advantaged accounts like their 401k and Roth IRA, and later opened an HSA for additional tax benefits.

Why did the narrator switch jobs, and what financial benefit did they gain from it?

The narrator switched jobs in 2021 to pursue higher-paying opportunities, securing a 25-30% salary raise. Switching jobs provided faster salary increases compared to staying in the same position and allowed them to scale their investments further.

How did the narrator manage market volatility, and what was the result?

During market downturns like the one in 2022, the narrator controlled their emotions, stuck to a long-term view, and took advantage of lower stock prices. This strategy paid off as their investments bounced back, growing their net worth from $170K to over $350K.

What led the narrator to start a YouTube channel, and how did it contribute to their income?

Feeling burnout from the corporate grind, the narrator started a YouTube channel in August 2024 to explore entrepreneurship and creative outlets. Their channel grew to 10K subscribers, and they began earning around $500 per month in AdSense, adding a second income stream alongside dividends.

Why did the narrator decide to quit their job, and what was their plan afterward?

The narrator decided to quit their job to focus on traveling, spending more time with their girlfriend, and pursuing entrepreneurship. They planned to move back in with their parents to reduce expenses and continue growing their YouTube channel and other income streams.

What were some of the narrator's regrets and mistakes in their financial journey?

The narrator regrets not being smarter with cash management, not starting their investing journey earlier, gambling on risky stocks, and not opening an HSA sooner for its tax benefits. They also realized that money alone doesn't bring happiness.

How did the narrator's approach to investing change over time?

Initially, the narrator focused on individual stocks but later shifted to safer investments like dividend ETFs. They also prioritized investing in tax-advantaged accounts and increased their monthly investments as their income grew, eventually becoming more conservative with their investments.

What are the narrator's long-term financial goals?

The narrator's long-term goal is to build a sustainable income from entrepreneurship and investments. They envision having a paid-off house, a substantial investment portfolio, and enough income from dividends to support themselves and a family.