Full Early Retirement Guide (Starting From $0)
Published: 2021-09-01
Status:
Available
|
Analyzed
Published: 2021-09-01
Status:
Available
|
Analyzed
Predictions from this Video
Incorrect: 0
Prediction
Topic
Status
The speaker advocates for redefining retirement as 'freedom,' achieved when one has sufficient funds to stop working and control their time.
"he said the word retirement should be replaced with the word freedom because once you reach a tipping point when you have enough money to stop working you have true freedom"
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Achieving a 'freedom figure' is presented as the key to having full control over one's life and time, enabling early retirement.
"the word retirement should be replaced with the word freedom because once you reach a tipping point when you have enough money to stop working you have true freedom"
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Having a defined 'freedom figure' is crucial for financial planning, akin to having a target in a race to avoid wasted effort and misdirection.
"if you don't know your freedom figure then it's a bit like being blindfolded in a running race you can't see where you're going"
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For early wealth building, the speaker advises prioritizing wealth accumulation (assets increasing in value) over immediate cash flow.
"the key is to prioritize building wealth over cash flow"
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The speaker consistently reinvested the majority of any extra cash earned, especially when younger, to accelerate wealth building.
"whenever i made some extra cash when i was younger i made sure to reinvest the majority of it"
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The speaker utilized the debt avalanche method, prioritizing paying off high-interest debt (like a 32% store credit card) first after meeting minimum payments on all debts.
"i used the debt avalanche method which involved making the minimum payments on all my high interest debt then i used any extra money to pay off the debt with the highest interest rate first which was my store credit card at 32"
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To build a good credit score from age 18, it's recommended to use a credit card for small expenses like gas and pay the balance in full monthly to avoid interest.
"all you need to do as soon as you turn 18 is get yourself a credit card start putting a few little expenses on it like gas and pay that baby off in full at the end of each and every month"
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Opening tax-advantaged retirement accounts like 401ks (US) or SIPs (UK) allows saving money before taxes are paid, leading to significant tax savings later.
"if i opened up a retirement account then i could save money i hadn't paid tax on this is known as a 401k in the usa and a sip in the uk"
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Utilizing accounts like Roth IRAs (US) or ISAs (UK) allows savings on which taxes have already been paid, with future capital gains and earnings being tax-free.
"i opened another account that allowed me to save money that i'd paid tax on but in the future i wouldn't have to pay tax on my capital gains or in other words all the money that the money generated this is called a roth ira in the usa and an isa in the uk"
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Diversifying income streams is likened to Spider-Man having multiple webs, making one's life more resilient against job loss or other financial setbacks.
"imagine spider-man is you the platform is your life but now you have multiple income streams"
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When choosing side hustles, it's beneficial to leverage existing skills rather than starting something entirely new, which can also align with passions.
"pick side hustles that take advantage of my existing skills as i don't have to learn something completely new"
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Transitioning to passive income streams is essential to ensure money continues to grow even while sleeping, as side hustle income may not be permanent.
"it's time to start looking into passive income streams side hustle money doesn't last forever that's why you want passive income streams so your money can make more money while you sleep"
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Due to a lack of available time for additional work, the speaker turned to generating passive income through financial markets.
"i was working a nine to five job plus all the overtime flipping cars on the weekday evenings working in a shop on saturdays and tutoring people on sundays i actually had no more time to sell so that's when i started looking into ways to generate passive income through the markets"
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The stock market is presented as the most accessible avenue for passive income generation, especially with modern investing apps.
"the stock market is probably the easiest to get involved in especially nowadays"
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The speaker favors investing the majority of their funds into simple, low-cost index funds, which represent a collection of stocks.
"i personally like to put the majority of my money into simple low-cost index funds which are essentially baskets of stocks"
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The speaker consistently enables automatic dividend reinvestment to further grow investments.
"i always turn on automatic dividend reinvesting"
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The speaker allocates only 5% of their funds to established cryptocurrencies like Bitcoin, Ethereum, and Cardano, believing they will withstand the test of time.
"i personally only have five percent of my money in well-known crypto coins such as bitcoin ethereum and cardano"
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Real estate is identified as the 'holy grail' of wealth building, though it requires a larger initial investment.
"real estate is the last on the list and this is honestly the holy grail of wealth building"
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Leverage in real estate can be effectively utilized by saving for a rental property deposit, allowing tenants to help cover the mortgage while the property potentially appreciates.
"if you're able to save enough for a deposit on a rental property then you can really start unlocking the power of leverage"
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Reaching phase 4 of the outlined strategy is expected to position individuals well for achieving financial independence and early retirement.
"i'm confident that after you reach phase 4 you should be in a pretty good place to achieve financial independence and retire early"
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