How To Manage Your Money Like The 1%

how many times have you read or watched some complex financial crap like this oh hey john okay vincent to most effectively manage your money we're going to do a 40 50 portfolio split with a structured product and variable annuity with a guaranteed death benefit rider wait wait what what you don't know a structured product a structured product is basically a pre-packaged instrument that's linked to an underlying like the ftse 100 that's what if you're going nuts because of the confusing jargon and quite frankly really bad financial advice then i'm here to help this video will

teach you how to manage your money like the one percent and many of these strategies go against what 90 of the finance gurus out there teach because well they're giving really trashy advice so let's not waste any more time and let's get started but first let's get some pump up music going shall we there we go there we go okay let's go the wealthy didn't just lounge on the floor one day and say hey it'd be really cool if i was rich and then go back to eating their extra extra flamin hot cheetos well they

probably did but they didn't just stop thinking they also moved on to executing but before successful people can execute they need to plan so take out a piece of paper and let's jot down your money goals the key here is to work backwards let's say you want to buy a private jet one day what you want to do is figure out how much that will cost and set up the steps that you need in order to get there which by the way we're going with the exact ways to manage your money like the wealthy the

most important thing to remember is just make sure you have a goal it will help you keep track of your progress and give you something to work towards and to strive for because saving money just to save is really boring but getting closer to reach your goal every single day now that's exciting i'm gonna share with you the most important formula that the one percent uses to manage your money and unfortunately school didn't teach us this but thankfully thankfully they did teach us something even more important the pythagorean theorem at least now i know how

to find the length of a triangle the secret formula has to do with how much money you have coming in versus how much money you have going out also known as cash flow so you can imagine it as income minus expenses equal cash flow if you have positive cash flow it means that you have money left over and if you have negative then well you're falling into debt everything the wealthy does leads back to this formula so it only makes sense that we work with this and first we'll focus on this part expenses i bet

you 350 that you didn't know that truly wealthy people were actually frugal warren buffett with a net worth of over 100 billion dollars still lives in the same house that he bought at 1958 and i'm not saying you got to be like my man buffett but understand that truly wealthy people did not get to where they were by being flashy and fancy the wealthy are very cautious spenders that focus on the value of things and i want you to remember this aspect of value because here's where i contradict 90 of finance gurus out there i'm

sure you've heard countless times before to stop buying iced coffee every single morning what you should do instead is to invest that money and then you'll be rich yada yada yada and while that may be true here's why i think it's complete trash remember when i talked about value like three seconds ago well if that five dollar iced coffee makes you the happiest person in the world makes you a lot more productive you're more open to chatting more open to networking and reduces your stress for the rest of the day surely it's worth five dollars

right a lot of finance gurus out there are grasping at straws trying to focus so much on the little things but instead i think we should focus on the bigger spending habits like did you really need to spend 80 000 on a brand new car that's gonna make you happy for maybe a few weeks and then that car turns into just a regular old car with the same functionality as every other car i'm also going to get a lot of hate for this statement stop budgeting but before you get all ninja warrior in the comment

section just hear me out do you believe that the wealthy have a bunch of excel spreadsheets where they do this on august 17th i bought a mcdonald's burger with no cheese which cost me two dollars and seventy three cents i paid with my credit card ending in seven seven seven one which by the way wrong move always get it with cheese even if you're lactose intolerant to be clear i'm specifically talking about being super detailed a budgeting style that 90 of the finance gurus talk about i personally still budget but in a very very unique

way that makes it a lot easier and saves me a bunch of time because hey time is money but don't get me wrong detail budgeting could still be a good option if you're on a super tight budget if you have spending problems or if you're in a financially unstable place but if you don't have these money issues then here's what i do and this is a loosely better example of what the rich actually does and it's called a guideline automation my paychecks are deposited into my checking account and each month i transfer the amount that

i want to spend into a spending account which is with the same bank my spending account includes my fixed monthly bills my typical living expenses and by knowing what i need to spend on then i can set spending targets for food entertainment travel shopping etc i also use a free app like mint to track and see my spending categories whether i'm meeting my financial goals if i'm spending in a specific category more than i allotted and i do want to emphasize that this strategy isn't for everyone but my goal i think one of the best

goals is to simplify personal finance as much as possible because just psychologically speaking the more obstacles that we have in the way then the less likely we are gonna do it the rich are also really good at taking advantage of laws they hire super fancy financial professionals to help figure out dozens of different tax loopholes to reduce their taxes and don't worry you don't need a fancy advisor i'll actually share some of the easiest ways that you can also save on your taxes first is the 401k which is an employer-sponsored retirement account you can make

pre-tax contributions up to a maximum of 19 500 in 2021 and then invest the money over time a 401k is the simplest way to lower your tax bill and plus your employer usually offers a 401k match which is basically for your money and here's how this whole thing works let's assume your salary is 35 000 and your tax bracket is 25 if you do nothing and you pay taxes on the entire thing then you pay 8 750 in taxes but if you contribute 6 new salary which is 2100 into a tax deferred 401k account then

your taxable income becomes 32 dollars and the income tax on the thirty two thousand hundred dollars is eight thousand two hundred and twenty five which is five hundred and twenty five dollars less than the tax on your full salary so not only do you automatically save for retirement you also save on the taxes that you pay today you will however have to pay taxes on the money when you withdraw it when you retire but likely at a much lower tax bracket second is this thing called an hsa or health savings account which is available if

you have a high deductible health insurance plan and just like the 401k the money you contribute to the hsa is pre-tax and you can also use that amount to pay for qualified medical expenses and just like 401k you can also invest it and the third and my favorite way to save on taxes is with a roth ira account and this is quite possibly the most powerful way to invest and you might have heard of the infamous peter thiel who famously turned his roth ira account into a 5 billion monster that he has to pay how

much the tax is now zero zero dollars with a roth ira you contribute money that's already been taxed on but you don't have to pay taxes when you would draw it in retirement so although these contributions don't lower your tax bill in the present time after your money grows a few years years after years and you can withdraw the full amount tax free you remember those pesky loans that you took out years ago that you're still now paying off every single month well that's really impacting your expenses and i'm gonna show you the smartest way

that the rich actually use this to get rid of them the reason these bad debts are so annoying is because of the interest rate that you need to pay the longer the interest grows the more you're going to end up paying now the quickest and mathematically speaking the most efficient way to get rid of this debt is using this thing called the avalanche method and here's how you can do it think of how much money you can budget to pay off your debt every single month now make a list of all your balances and the

minimum payments that's required and list them in order from highest lowest by interest expense for example let's say you currently have a 1 000 credit card balance with a 20 interest rate a 2 800 credit card balance with a 10 interest rate and a 17 000 card loan with a 8 interest rate what you want to do now is make all the minimum payments on your balances and put any leftover money towards the balance with the highest interest rate in this example it's gonna be the credit card with the one thousand dollar balance and after

you fully paid off that one thousand dollar balance move on to the balance with the next highest interest rate which is the two thousand eight hundred dollar credit card balance and again put as much money as you can towards it and then rinse and repeat now many finance crews out there recommend the snowball method instead where you pay off the smallest balance first to keep you psychologically motivated on on track but mathematically speaking the avalanche method is the best way to go okay cool so we covered the expense part for the most part let's now

tackle this income part and if you're enjoying this video i truly appreciate if you could turn that like button into a beautiful black and comment below what's the first thing you want to buy when you're rich and also make sure you stay until the end to learn how to supercharge this entire formula that many finance gurus do not talk about getting back to warren buffett and quite frankly many many many wealthy people they all made millions and billions from investing their money it's one of the key ingredients to managing your money effectively but it's super

important that you invest smartly and i'll show you the easiest way to get started but first here's the way not to get started you've probably heard a lot about day trading from a bunch of different finance gurus but what they don't tell you is that 90 of day traders lose money and if you don't want these terrible odds when it comes to your money or anything 90 to 10 then the best thing you can do is instead invest long term before i tell you what i personally invest in let me show you the true power

of investing if we invest just 100 every month for 50 years at a rate of return of 10 at the end of the 50 years you would have only contributed about 60 000 but from over time in a stock market and returns your make your total portfolio value will be 1.4 million dollars the best and easiest way by far to start investing is with these things called index funds basically instead of investing in one stock that can go up or down with an index fund you actually invest in hundreds hundreds of different stocks where you

diversify your money and reduce your overall risk you can pretty much just set it up and forget it plus some of the indices that i actually invest in outperform nearly ninety percent ninety percent of those fancy fund managers out there if you're interested check out this video here but only after you finish with this video technically it's not income until you realize the gains but you get the idea i'm also going to get a ton of hate with my next strategy but it's also really key on how the wealthy got so wealthy and also how

they manage their money so make sure you listen very carefully you can use good debt to increase your income yep never said it that's it you need to realize that not all debt is bad and the idea that you need to avoid all debt is pretty trash financial advice assuming that you're responsible with your money good debt is a type of debt that allows you to create wealth as the income and the capital growth from the investment pays off the debt and exceeds the cost of paying off the debt let's say for example you purchase

a rental property for two hundred thousand dollars and you rent it out for two thousand dollars a month you pay one thousand dollars a month to the bank for the mortgage payments and let's say you need around six hundred dollars per month to cover all the expenses in running your rental property so what this means is that your property is now making you 400 each month including all expenses however there's always one thing you need to keep in mind it's the risk involved that your investment may actually decrease in value which results in you owing

more on the loan than the value of your investment so make sure you're extra careful with this strategy the next way to increase your income before i get into the two ways to supercharge your cash flow formula is simply by making more money and i'll share specific tips on what i personally did to do this now you could do the traditional thing that i've done before such as working overtime asking for a raise getting extra qualifications to get a better job or or you can do what the cool kids are doing nowadays and start a

side hustle because if there's anything that's good for you it's doing what the cool kids are doing but seriously side hustles are a great way to make extra money it's actually what jump started my journey into entrepreneurship and all it really requires is putting aside a couple of hours every few days to work on it if you're interested you should check out this video for the side hustles that i built up that should give you some ideas so that's all the normal things that wealthy people do to manage your money to improve this cash flow

formula but there are two secret ways to supercharge it that not a lot of people talk about one thing that you need to realize and always always remember is that no one no thing deserves to get a chunk of your money more than yourself here's the secret the one percent loves to educate themselves to gain information because of the value that they can get down the line and thankfully you're doing the same exact thing right now by watching this video so definitely give yourself a pat on the back investing yourself can yield one of the

best returns on investments that you can ever make whether it's investing in learning a new skill developing yourself professionally or personally you need to give to yourself first before you can give to others it's your responsibility to take the time to develop your gifts and talents so that we can best serve others and it doesn't mean higher education educating yourself can take many different forms for example i didn't all of a sudden learn how to film on videos how to write scripts how to seo on youtube how to edit videos film a camera did i

say that already i actually picked up these skills throughout more than 10 years 10 years from the small projects that i worked on throughout that time frame and youtube and this channel is the culmination of those 10 years of self-education the next way to supercharge the cash flow formula is through strategic planning and don't skip this part in any part of your life especially when it comes to money management you need to make sure that you have the money to support yourself through struggles that can pop out of nowhere make sure you have an emergency

fund that will support you for up to three to six months even if you don't have any income and this cushion of cash will give you a greater peace of mind that would allow you to take greater risk to allow your income to grow and plus it'll help you rest easy at night because you won't face the financial pressure every day that something's gonna go wrong but where should you keep your money we all know banks nowadays offer such low interest rates that there aren't many good places to store your money the national deposit rate

for interest checking accounts as of august 16 2021 is point zero three percent so you're pretty much earning nothing on your cash so that's why i'm excited to announce that we've partnered with our sponsor hm bradley an invite-only fintech platform that responds to how you manage your money what's really cool about hm bradley is that it offers saving tiers meaning that with a monthly direct deposit the more you save during a calendar quarter the more you can actually earn in the next quarter for example if you're in saving tier one you can earn up to

three percent annual percentage yield on your balance of up to one hundred thousand dollars which is one hundred times more than the national average the second cool thing is that you can really take advantage of the power of compound interest because you can earn interest on top of your deposit as well as the interest that you earned on your original deposit that means that you can make your money work even harder for you plus your deposits are issued by hash bank member fdic and are insured up to 250 000 per depositor if you're interested in

taking advantage of the saving tiers and potentially getting up to 100 times more than the national deposit rate check out hm bradley in the description below if you sign up through my friend link you'll skip the waitlist and be able to apply for an agent bradley deposit account right away it's really that simple everything comes back to this cash flow formula everything you do in life will impact this or this or all of it and even if you spend thousands of dollars with a private financial advisor they're gonna start with the exact same formula and

tell you what i told you today now that you have a solid plan it's time to execute because thinking and planning without taking action doesn't do anything the best time to start was yesterday but the next best time to start is today and if you're feeling financially behind it's important that you check out this video over here