How to NEVER Be BROKE Again - Step-By-Step Guide
Published: 2023-12-24
Status:
Available
|
Analyzed
Published: 2023-12-24
Status:
Available
|
Analyzed
Predictions from this Video
Incorrect: 0
Prediction
Topic
Status
Prioritize paying off high-interest debt like credit cards and hard money loans before focusing on investing.
"if you have any sort of high interest debt so these are things like credit cards or hard money loans if you have this type of high interest debt then your sole focus in the beginning right now should be to pay off this highin debt"
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Paying off low-interest debt early can be considered an investment with a guaranteed return equal to the interest rate saved.
"if you don't have any sort of low interest debt so these are things like a car payment or a mortgage or student loans one of the things that you can do to invest your money and get a guaranteed return is pay off your debt early"
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ETFs offer diversified exposure to the stock market, making them a viable investment option for those who don't want to pick individual stocks.
"instead of you going out and trying to find the best stock to invest in you can invest in an ETF or a fund that's going to give you exposure to the entire stock market"
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An asset generates income, while a liability consumes income. Wealth is built by acquiring more assets than liabilities.
"an asset is something that puts money into your pocket a liability is something that takes money away from your pocket"
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Avoid financing liabilities (things that don't generate income), except potentially a primary residence.
"if you are buying a liability so if you're buying a car you're buying anything that's not putting money back into your pocket you are no longer allowed to finance it period"
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Credit cards can be beneficial if used correctly by understanding how they make money (merchant fees) and by paying the balance in full to avoid interest, thus earning rewards.
"if you want to use your credit card the right way you need to First understand how your credit card company makes money that way you can understand this and that way you can use your credit card in a way that's going to benefit you so every time you swipe your card your credit card is going to charge the store a fee for processing the payment"
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Avoid using credit cards if you cannot pay the balance in full each month, and prioritize paying down existing credit card debt aggressively.
"if you are paying interest on your credit card you were using it the wrong way and you should not be using a credit card maybe at some point in the future you can consider using a credit card but right now if you have credit card debt you should not be using a credit card and you got to pay down this credit card debt Asa P"
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Adopt a 'pay yourself first' system by investing and saving before spending, which is a key differentiator between the wealthy and the majority who spend first and save/invest leftovers.
"you want to invest and save first and then you spend whatever's left the majority of America and this why the majority of America is broke the majority of America spends their money first and then they'll save or invest whatever's left"
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Build an emergency savings fund equivalent to 3 to 12 months of living expenses.
"you want to have somewhere between 3 months and 12 months worth of expenses so figure out how much your monthly expenses are multiply it by three and then multiply it by 12 and that's the range of cash that you want to have saved"
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The majority of people should adopt a passive investing strategy, as active investing (stock picking) is difficult and often leads to losses.
"the vast majority of America 90 to 95% maybe even 90 98% of Americans should be passive investors"
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ETFs provide exposure to diversified stock market segments, and consistent, automated investing in ETFs is key to success in passive investing.
"ETFs... giving you exposure to baskets or groups of stocks so that way you don't have to find the perfect company but the key to win in this type of passive investing game is you got to just keep throwing money into the ETFs every week every two weeks every month"
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As time becomes a more limited factor for wealth building, increasing financial education is crucial for achieving better investment returns.
"the higher the returns that you get on the money that you invest the wealthier you will become and now when time is a more limited factor you're going to have to get more focused on that Financial education not just so you can invest more but so you can get the better Returns on your money"
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To increase investment capital, focus on lifestyle adjustments to spend less, and also actively work to earn more.
"the most accessible thing that you can do is make the lifestyle adjustment that way you can spend less yeah work to earn more too that way you have more money going into your Investments but the most accessible thing that you can do is you got to learn how to spend less money that way you have more money just throwing into your Investments"
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It is never too late to make a career change, regardless of age.
"it is never too late to make a change even if you're in your 40s even if you're in your 50s even if you're in your 60s it is never too late"
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Pursue income-generating activities, such as side hustles or businesses, during evenings, weekends, or lunch breaks to increase earning potential.
"you can start on the evenings you can start on the weekends you can start on the mornings you can work on a lunch break you can find time to get committed to start learning to be better to doubt creating that new income"
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If savings account interest rates are higher than low-interest debt rates (e.g., a 2.8% mortgage vs. a 4.5% savings account), it may be more financially prudent to save the money rather than aggressively pay down the debt.
"if you got a mortgage back in 2020 or 2021 and your mortgage is 2.8% a year here now you're debating what should I do should I pay down my mortgage faster or should I do something else with my money well if one of your options is I can save my money into a highin savings account that pays 4 and a half% and my mortgage is 2.8%"
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Investing in personal development, such as learning new skills through various media and potentially hiring coaches, is a crucial investment for increasing earning potential and wealth.
"one of the best investments that you can make is in yourself that means start by spending your time to learn watch YouTube videos listen to podcasts listen to articles read books about ways to earn more money ways to build a business ways to grow a business way to scale a business ways to be creative ways to be Innovative"
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JP Morgan Chase Bank suggests a recession may be necessary to control inflation.
"JP Morgan Chase Bank who says that our economy needs a recession to save our economy at least that's according to JP Morgan Chase Bank who says that our economy needs a recession"
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JP Morgan Chase Bank believes current stock market valuations are rich, leading them to be cautious about aggressive equity investments due to factors like potential recession and tightened liquidity.
"Rich valuations which means essentially that they still believe that the stock market is overvalued they say the stocks essentially company's valuations are too high and because of that they're not investing as aggressively into equities right now"
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The Federal Reserve is expected to continue raising interest rates to combat high inflation, which will likely lead to a further slowdown in the economy.
"we know at the time when we recording this video is that while inflation is still high we're seeing the economy slow down and we're probably going to see more interest rate hikes coming the Federal Reserve Bank has made this very clear that they expect to raise interest rates more in the future"
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The Federal Reserve aims to cool the labor market, believing the high number of jobs created is contributing to inflation, and plans to achieve this by reducing economic demand.
"the Federal Reserve Bank is working to correct they're working to change what happened in the last few years they want to cool the labor market why because they feel like too many jobs were created that that's also fueling the inflation problem so what do they want to do they want to correct that they want to correct that through demand"
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Losing money is an inherent part of investing, but not investing at all carries a guaranteed loss due to inflation and missed opportunities.
"you are going to lose money period every single person in the game has lost money at some point but when you don't take that risk you're also guaranteed to lose money because now not only are your savings going to lose value to inflation but you're also missing out on huge opportunities"
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The speaker acknowledges losing money on investments, specifically detailing a past real estate deal where inexperience led to significant mistakes and financial stress.
"I have lost money in Investments I've talked about this openly I made a video about my worst real estate deal ever... I was early I was young when I bought that deal I did not know what I was doing and I made every mistake possible"
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Achieving wealth, especially when starting later in life, requires significant commitment and sacrifice, as individuals must compensate for less available time by investing more aggressively and making difficult lifestyle adjustments.
"you got to make the sacrifices you got to get real with yourself and we're going to go over some numbers where you're going to have to put in the sacrifice right now do whatever it takes because if you do not have a solid plan towards Building Wealth or retirement now you are going to have to get extremely committed because you don't have the same time as somebody who's 21 or 25"
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A negative mindset towards wealthy individuals can hinder one's own ability to achieve wealth, as money is viewed as a tool that amplifies existing traits, not inherently good or bad.
"if you're not rich so I hate people who are rich and I can pretty much guarantee that when you carry that mindset it's going to be impossible for you to ever become rich"
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A crucial first step in improving finances is a comprehensive assessment, including current savings, investments, debts, income, spending tracking, and protective financial/legal measures.
"you got to start by assessing your finances where they are right now number one do you have any savings number two do you have any Investments including a 401k or an IRA number three do you have any debts and what kind of debts are they number four what is your income combined number five are you tracking your money number six what legal or financial Shields do you have"
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The economic system is designed to encourage spending, even with borrowed money (0% APR, credit cards), which benefits corporations and banks at the individual's expense.
"our entire economic system is designed to get you to spend your money and not just that it's designed to get you to spend money you don't have because now when you go into Lululemon and you don't have the money to buy those leggings the $100 or $200 leggings well what do you do well you can walk out which is not good for Lululemon but you could buy it with 0% APR or you can put on your credit card"
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True wealth is built by owning assets that generate income, not solely by increasing income, as many Americans mistakenly use higher incomes to acquire liabilities (like cars and larger homes) that consume wealth.
"wealth is built through owning assets it's not built through having a big income this is a big misconception here in America because most people in America are working for a bigger income and then they use that bigger income to drive a nicer car and live in a bigger home and that's why most of America is broke because well that car and home isn't putting any money in your pocket"
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The traditional education system often fails to teach essential financial literacy skills like money management, investing, and wealth building within the current economic system.
"I never learned about how to manage my money I never learned about how to invest my money and I never learned how to build wealth in the economic system that we have right now"
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The education system focuses on maximizing labor income, but true wealth building in a capitalist society relies on leveraging capital income through investments.
"you can make money from your labor and then you can make money from your Capital you have to understand this if you want to be able to build wealth because our education system and our schooling teach us how to maximize the income that we make here from our labor"
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Corporate executives have a fiduciary duty to shareholders, meaning their primary goal is to increase company profits, not necessarily to maximize employee compensation.
"the executives corporate Duty is not to the employees it's to the shareholders it's to these people so the number one goal of the people that's running the company is to drive this the profit higher it's not to pay the employees the maximum amount possible"
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The potential return from investments (7-10%) is significantly lower than the interest paid on credit card debt (14-25%), making debt repayment a more financially sound decision.
"your Investments are paying you 7 to 10% historically on average which means if somebody got 10% a year on their stock market portfolio that would be considered a great return but then if you have to go and turn around and pay 15 20 25% on your credit card debt you are losing money"
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Wealth building is driven by the velocity of money, meaning how quickly one can grow their invested capital, and accelerating this process is key to financial success.
"building wealth is all about the velocity of your money how fast can you grow your money from $11,000 to $10,000 and your job now is to figure out how you can accelerate the velocity of your money"
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The American capitalist system rewards risk-takers, as taking calculated risks can lead to unlimited potential returns on investment.
"in this capitalist system the one that America is in right now that's not how it works if you take a big risk There's No Limit how much you can make you can 1X 2x 100x a million x your money and your return meaning there's no limit to how much money you can make and the more risk you take the more calculated risk you take the more money that you can make"
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Understanding one's current financial situation is the foundational step for improvement.
"the first thing that you have to do in order to start improving your finances is you got to get a pict pict of where you are right now because everybody's going to be in a different boat"
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There are numerous ways to earn money, from traditional labor like mowing lawns to online services such as digital marketing, video editing, graphic design, and copywriting.
"you got to start by having a way to earn money there's an unlimited ways that you can earn money go out and start mowing people's Lawns go and shovel people's snow go and rake people's leaves if you don't want to do that then go and sell some services online go and learn how to do digital marketing learn how to do video editing learn how to do graphic design learn how to do copywriting"
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A diversified passive investment portfolio can include ETFs for value companies (like S&P 500), dividend-paying stocks for cash flow, and rental properties, with a focus on generating cash flow.
"I have ETFs that give me EXP exposure to Value companies things like the S&P 500 I have ETFs that are giving me exposure to dividends this is actually the biggest piece of my entire passive investing portfolio I like dividends because I like cash flow cash flow is the bulk of my Investment Portfolio because my rental properties are there for cash flow"
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The author predicted that 2023 would be an unfavorable year for financing large liabilities like new trucks, suggesting individuals should prioritize financial preparation for upcoming investment opportunities instead.
"I say that 2023 is not the year for you to go out and finance a brand new truck because this is the year for you to get financially smart that way you can get prepared of putting money aside for your Investments putting money aside to capitalize on more investment opportunities and then number two building your financial education that way you can actually see the opportunities when they happen"
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