"How I saved my first $100,000 (my formula)" - Transcript | YTScribe

at an old Berkshire Hathaway shareholder meeting Charlie Munger was asked what his best advice for investing and Building Wealth is his response was the first 100 000 is a bit but you gotta do it I don't care what you have to do find a way to get your hands on 100 000 and after that you can ease off the gas a little bit that first 100 000 is for most people the most difficult part of creating wealth and so in this video I want to share with you my formula how I accelerated saving and investing

my first 100 000 and hopefully this will give you some ideas in how you can do it too if you're new here I'm Nisha I'm a qualified accountant and on this channel we talk about all things money and self-development let's get into it the very first thing I did before anything else was increase my savings cap you can only save as much as you earn if you earn three thousand dollars a month the maximum that you could ever save if you literally did not spend a thing is three thousand dollars that's your savings cap the

only way to increase that savings cap is by making more money and so that is where my primary focus was when I was going for this Milestone there are so many ways you can do this buy and sell something on the side start a side hustle take on extra freelancing work but honestly the quickest and easiest way to do this is by just getting a pay rise through your day job and so that is what I did a job should either be there to learn or be there to earn ideally both but for me at

different points in my career I focused on one or the other and if I haven't got either I've switched jobs the biggest pay risers I saw was when I moved between organizations between 30 to 40 percent pay jump which for me was Far higher than what I got in the years that I stayed in the same organization so I have a full video which breaks down exactly what I made and what my base salary was every year for the last nine years I'll link that over here and that shows you what I did at what

point in my career to ultimately increase the savings cap something that you'll notice from that video is that even though the ghost salary might look high what my take home is after tax is another thing altogether saving your first 100 000 is hard and if you're relying on just one source of income to be able to do that it's going to be a very very long game especially after taking into account all the other fixed costs that you have rent or a mortgage bills groceries it will take most people years and years which leads me

to the second way of increasing your earnings potential and that is through exploring other options and better yet ones where you can keep more of what you make there are a million different ways to get to the same destination and so once my salary was at a certain level to get to the next level I used my salary as leverage to buy my first investment property I say investment property but I knew that I was going to in fact live there three four five years later and my tenant also knew about this so I'll explain

my thought process behind this in the next part of the video but ultimately this decision meant I was able to get another source of income through rental income and again increasing my savings cap so you want to think about how you can buy assets or what assets you could buy to generate additional cash flow at the same time I was also exploring with different side hustles and developing skills that would help me increase my income outside of my day job and I can tell you I failed so so many times at this maybe I'll make

a whole video on all the businesses that failed because at many times it felt like I was going backwards I'd be putting money into these businesses but no money was coming back out so I'd keep going back to the drawing board and starting over and over again try loads of things and when you fail fail fast and fail forward every time I failed I took those learnings with me to the next thing I tried and then if that failed to the next thing I tried and I kept going until it all added up and led

me to something that did work which leads me to the second thing I did which is a absolute must if you're trying to get to the 100 000 and that is to creatively live below your means I use the word creatively because I see so much personal finance advice centered around depriving yourself and I don't want to Advocate that lifestyle because even though being Frugal and saving resonates with more people there are so many other ways to live below your means without having to live like a bro student for your entire life and money should

be used as a tool to create the life that you want not take away from it and a lot of this is about just being smart about how you're using your money so I mentioned earlier about buying an investment property that later became a place that I lived I probably would not have been able to buy that property if I didn't a have the massive advantage of having a reasonably well paid job and secondly being able to live at home with my parents for the first few years of my working life and even after that

I bought the property I lived at home for a bit longer because the opportunity cost of living in that place versus renting it out was around 2 500 pounds a month now I get it there are so many reasons why people can't do this you don't get along with your parents you want to move out and be independent they don't live near where you want to stay whatever it is for me being able to firstly spend more time with them at that point in my life and secondly through it being able to save more really

helped me accelerate getting to that Milestone and going back to Charlie munger's quote find a way to get your hands on the first 100K do whatever it takes this was my way it definitely isn't the only way one of my friends bought a two-bedroom flat at the same time but she wanted to move out so her way to get her hands on the first 100 000 and live below her means was to rent out the spare bedroom living below your means doesn't just mean not being able to do something it also means being creative about

how you can afford to do that thing and one of the best ways to do this is by analyzing where the biggest costs in your life are and think about how you could get the same thing but for Less I have a free save your first 100 000 tracker that is in the description box below and the whole premise behind this is to see how and where you're spending across an entire year when you can visibly see exactly where each pound or each dollar is going you become a lot more mindful of where the biggest

costs are and then your brain really starts to unlock ways and ideas in how you can live below your means so take some time to look at this and figure out how you can increase the gap between your earnings and your expenses as much as possible and then with the difference you can do the next stage which is letting it multiply the first 100 000 is the hardest but the reason why there's such a focus on it is because once you save and invest that amount the next 100 000 and the 100 000 after becomes

a lot easier than the first because of the power of compounding think about it someone with 1000 and someone with a hundred thousand can be investing in the exact same thing returning eight percent per year the first person will make eighty dollars after year one and the second person would make eight thousand and then that money gets reinvested and the difference just keeps getting greater and compounds which is why other than what you need to keep aside for your emergency fund any additional savings should be invested to benefit from that compounding early on you don't

need a hundred thousand to start investing you can start investing for as little as one pound or one Euro through apps like trading 212 who are very kindly sponsoring this video trading 212 is a great app and lets you trade stocks funds ETFs and foreign exchange even if you don't have enough money to start investing seriously you can build the habits early on so if you're new to the world of investing you can use fake money and invest fake money which tracks what the market is doing in real time so you can see if I

invested 100 pounds into x what that would be worth in weeks months years down the line this gets you comfortable with the Habit investing so that when you're ready you can start to use the real mode what I also like about trading 212 is their pies feature where you can follow other people's pies so someone may have created an investment pie for example 20 in a growth fund 30 and an energy fund to 50 and the S P 500 and you can see the performance of those pies and copy those pies into your own account

they have also recently added a new feature for multi-currency accounts usually if you're investing in a us-based fund where a large portion of the stock market is you'd have to convert your money and incur FX fees every time you do this if you're depositing from Europe but now you can actually withdraw and deposit from the same currency of your bank account's currency so you don't have to pay your bank conversion fees and it effectively allows you to manage foreign exchange volatility by letting you hold multiple currencies through the App instead if you want to try

out trading 212 you can get a free share worth up to 100 pounds when you use the code Nisha nischa so thank you training212 for sponsoring this video ultimately saving your first 100 000 may seem Out Of Reach but if you really put it at the Forefront and focus everything you do around it even if it means sacrificing some things here and there you can really accelerate your journey to Building Wealth I'd love to know where you stand in your financial building stage and what you're doing to get to that six figure savings Mark if

you want some ideas on what you can cut back to save more and invest more without cutting back on your quality of life I have a video that's completely dedicated to that I'll link that over here thank you for watching don't forget to subscribe if you haven't already and I'll see you in one of my other videos