This LOOPHOLE Lets You (Almost) NEVER Pay a Mortgage Bill Again

"if you wanted to buy this same $1 million property and you put down $200,000 now your monthly mortgage payments are going to drop from $4,800 a month to $3373 a month"

"The way the YouTube algorithm works if you do not smash that Thumbs Up Button then uh YouTube is much less likely to show you and other people our financial news and education videos to do this kind of house hacking you have to find a loophole in the system what's considered a home before you give me a Sentimental answer like home is where the heart is we're talking strictly Financial right now okay when most people think of a home here's what they're thinking they're thinking of this building with a roof on it with a door with a couple Windows actually maybe more windows and then a driveway this is what most people think of when they think of a home but technically speaking that's not the only definition of a home I mean you can own a condo which is one unit which is attached to a lot of different units your home can be an apartment but now you're renting this one unit inside of a building with a bunch of different units your home can also be a mobile home so there's a lot of different types of homes out there and if you wanted to buy a home this takes a lot of cash and most people don't just have a ton of cash sitting in the bank account where they can just go and buy their own home completely with cash so what do you do you go over to the bank and then the bank is going to loan you some money that way you have the cash to buy a home so now the bank gives you this mortgage that way you have the cash to buy this home and then every month for the next 30 years after that you're going to be paying your bank back this mortgage plus a little bit of Interest so this is what people want to avoid they don't want to have this big monthly payment because it is expensive and for the majority people when they think of being this housing payment free they have to wait 30 years until they can pay off their mortgage but there's a little loophole that you can use which will allow you to no longer have this money come out of your personal bank account you could have someone else pay this loan let me show you what I mean so you have this really nice 4unit multif family building on sale for a million dollar and each one of these units rent for $2,000 a piece they're pretty nice units they're spacious they're nice when most people think of buying this four unit multi family building here's what they think I'm going to buy this multi family building for a million dollars but I don't have a million dollar in the bank so now I got to go to the bank and get this commercial real estate loan that way I have the cash to buy this investment property so you go to the bank the bank's going to say hey you want to buy this property great put down $200,000 and then we the bank are going to loan you $800,000 and because it's is the commercial real estate loan we're going to charge you something around 6% a year in interest if you're getting a commercial real estate loan a business loan it's going to cost cost you a whole lot more than a regular mortgage which is why at this time it might be something around 6% interest which means this $800,000 that you're borrowing is going to cost you as the investor $48 a month this is how much money you're going to be paying the bank every single month to own this four unit building that you're renting out at first glance you might think wow that's a great deal you're making $2,000 $2,000 $2,000 $2,000 that's $88,000 a month in rent and you're only paying $4,800 to your bank that's thousands of dollars of margin except you forgot property taxes and property insurance and maintenance fees and management fees and property vacancies those five fees that I just mentioned are probably going to cost you something around $2500 a month this is in addition to your mortgage payment that you have to make every single month your loan payment so when your property is full you'll be making $88,000 a month in revenue and then you have to subtract your cost which 4800 plus 2500 something around $7300 a month which leaves you with a few $100 of margin every single month to put in your pocket and this can cover your vacancies that might come up and put some money in your pocket but in this particular situation you don't have a place to live so now you're going to have to go out and find another home to live in yourself and you're going to have to make a rent payment or a mortgage payment and chances are this money that's left over after paying off whatever vacancies come up is not going to be enough to cover your entire mortgage payment and your entire rent payment so now let's reanalyze this deal but this time you're going to do something different this time instead of renting this property out to four different families you're going to rent it out to three different families and you are going to live in this unit right here for yourself remember when I asked you in the beginning of this video what is a home well from a legal perspective as an attorney who is not your attorney I can tell you that your home which is called your primary residence it can be a one unit a two Unit A 3unit or a 4unit property so now if you go out and you buy this 4 unit multi M family building and you don't rent out all four units you live in one of the units and you rent out the other three now this is a 4unit building that you are using as your primary residence your home when you use this house hacking loophole there are four things that happen for you first you get a much cheaper loan because now you're buying a home and you can get a primary Home Mortgage instead of going out and getting a commercial business loan at the time of me recording this video this might only cost you 3% a year in interest compare that to what you would have to pay if you got the commercial loan like I talked about earlier so now if you wanted to buy the same $1 million property and you put down $200,000 now your monthly mortgage payments are going to drop from $4,800 a month to $3373 a month that's quite a big drop $3,400 a month might sound steep depending on your income but you have to remember one more thing your neighbors your people attached to your building are all going to be paying you $2,000 a month to live in your your building each all right now check this out so $2,000 $2,000 $2,000 every single month your neighbors are going to be sending you $6,000 a month when your property is full but you got some cost you have to pay right first thing you're going to do is you have to pay your bank you're paying your bank $3373 a month and then you also have your regular building expenses right your property taxes your maintenance your management fees your vacancy cost whatever this is right you have your regular cost to have a building have a home and this is going to cost you from the previous example $2500 a month this leaves you with $127 every single month that you have all your tenants in there after paying your mortgage after paying all of your housing payments your taxes your maintenance everything for your home you still have another $127 in your month because your neighbors are so generous that they decided to pay your mortgage for you you get to live mortgage free cuz you don't have a housing payment anymore your neighbors are paying it for you you're putting an extra $125 in your pocket every single month and your neighbors are helping you build equity in this million property every single month and none of this Equity is being built by you it's being paid for by your neighbors but now what if you don't want to pay that $200,000 down payment or what if you don't have that $200,000 down payment well that brings me to the second advantage of this loophole this is where alternative types of Finance to come into play like FHA Loans if you go the FHA loan route now you might only have to put down 3 and a half% on your loan but the issue with FHA Loans is there's a limit to how big of a home that you can buy but the interesting thing here is if you buy a multi-unit property like a 4 unit home like I talked about because four units count as a home then the FHA limit increases but before I get into that let me also remind you that more debt comes with more risk if you're only putting 3 and a half% down you don't have as much skin in the deal and you have bigger mully mortgage payment and so just understand that more debt comes and more risk and if you don't have a big enough equity in your property then you're also going to have to pay PMI but it is an option for some people who want to get into this house hacking game in certain areas you would be allowed to buy this 4unit property with is 3 and half% down with an FHA loan which means you only have to put down $335,000 and now you have this 4unit property that you're renting out to three other people now in this situation your mortgage payments are going to jump to $4,000 a month okay let's through the math 2,000 2,000 2,000 you have $6,000 coming into your pocket every month from your tenants and then the first thing you got to do is you got to pay the bank $4,000 so you pay in the bank $44,000 then you have to pay the additional $2,500 a month to live manage the property you know property taxes and everything else that means every single month out of your pocket you're going to have to pay $500 to live here but you also have a million doll property that you're building equity in each and every month and most of that is being paid by your tenant and in this situation you only had to pay $35,000 down to buy this million doll property the third benefit remember I said there's four the third benefit is that now you can sell this property for a profit and not pay any taxes if I just believe saying the real estate investor come in and I buy this property to rent out so now I'm not living here I'm renting out all four units and I rent it out for a year and a year goes by and I realize ooh I can sell this property for $1.2 million and now I sell this property for $1.2 million hey I made $200,000 in a year which is great but I got to pay taxes on that $200,000 of profits these $200,000 of profits of selling this investment property are called long-term capital gains and so I'm going to have to pay taxes on $200,000 and so I'm only going to keep a fraction of that but when this is your home remember this is your personal residence which means this is your home you can do that if you have four units so if this is your home home you have a special tax exemption which says you can sell your home for a up to $250,000 profit and you don't have to pay any taxes and if you own the home as a married couple then you can sell your home for up to a $500,000 profit which means you could sell this home for 1.5 million doll and then you wouldn't have to pay a penny in profit but sticking with the example if you buy this home and you live here and then you can have your tenants your neighbors pay you rent every single month and now your neighbors are paying for your mortgage they're building you equity in your home and now if you sell this property your home for $1.2 million you lived in this home free you built Equity free thanks to your neighbors and now you can sell this property and walk away with a couple $100,000 cash in your pocket and yes that's taxfree and then the fourth benefit is you can do something that I like to call multi-level house hacking at the time we recording this video most lenders have a rule that you are not allowed to rent out your primary residence unit so if you buy this property you can buy it as a home your own personal residents but you're not allowed to rent out your unit for at least 12 months but after 12 months you typically have the right to turn this unit into a rental unit as well so now you move out and now you just got this new rental unit remember if I bought this property initially as an investment property I'd be paying 6% interest I'd have to put $200,000 down and my monthly payments would be $4,800 a month but if I buy this property at my own home and I live here for a year remember I can get this at a 3% mortgage I can still put down $200,000 but now my monthly payments are going to be something like what was it $3,400 something like that a month and now I can live here for a year not have to pay any housing payments because my neighbors are paying for everything put $100 into my pocket every month and then a year later I can move out and then put an additional $2,000 into my pocket every month because these three tenants are paying the mortgage they're paying all the house housing bills they're paying for everything else this tenant is just profit after I move out so now this new property where I just moved out of can keep paying me that $2,000 a month every single month because now your interest rate doesn't change your bank is going to let you keep this 3% interest rate which you're not allowed to get if you're buying it as an investment property but here's the Dilemma if you move out of this property you still need a place to live right so you lived in this property for a year you didn't have to make any housing payments because your neighbors paid it for you you built equity in this property and then a year and a day later you move out you're bring in a new tenant and so you're putting another couple thousand in your pocket but you need a place to live so here's what you can do now you find another property like this another 4unit property and guess what you start this process all over again let me just finish drawing the windows I drew the door knob before the door All Right Now you have four new units and now guess what you move here you rent out these three units to your neighbors each of these neighbors are paying you $2,000 a month and you start this process again there's no limit to how many times you do this and every single year you can buy a new property you can let your neighbors pay your mortgage and you can continue building equity in more and more investment properties do this system five times and now you have five different investment properties with very low interest rate debt that are making you a profit every single month that you're building equity on every single month that your neighbors are paying for you to live there for every single month oh and after five of them you also have $10,000 coming into your pocket as profit every single month through passive income I know it's a lot easy to said than done but this process is possible and it's a very accessible way for you to go and get involved in real estate because now you are having your own property where you're living in but you're also building these rental streams and when you're ready you can move out and do it again"

"which means you only have to put down $35,000 and now you have this 4unit property that you're renting out to three other people Now in this situation your mortgage payments are going to jump to $4,000 a month"

"In this situation you only had to pay $35,000 down to buy this million doll property"

"you can sell your home for a up to $250,000 profit and you don't have to pay any taxes and if you own the home as a married couple then you can sell your home for up to a $500,000 profit"

"I can sell this property for $1.2 million and now I sell this property for $1.2 million hey I made $200,000 in a year which is great but I got to pay taxes on that $200,000 of profits these $200,000 of profits of selling this investment property are called long-term capital gains and so I'm going to have to pay taxes on $200,000 and so I'm only going to keep a fraction of that but when this is your home remember this is your personal residence which means this is your home you can do that if you have four units so if this is your home home you have a special tax exemption which says you can sell your home for a up to $250,000 profit and you don't have to pay any taxes and if you own the home as a married couple then you can sell your home for up to a $500,000 profit which means you could sell this home for 1.5 million doll and then you wouldn't have to pay a penny in profit"

"if the interest rate from your home is less than the interest rate from your investment then it makes sense for you to invest your money get a better return and then use your profits to pay down your home mortgage"

"if you buy this property you can buy it as a home your own personal residents but you're not allowed to rent out your unit for at least 12 months but after 12 months you typically have the right to turn this unit into a rental unit as well so now you move out and now you just got this new rental unit remember if I bought this property initially as an investment property I'd be paying 6% interest I'd have to put $200,000 down and my monthly payments would be $4,800 a month but if I buy this property at my own home and I live here for a year remember I can get this at a 3% mortgage I can still put down $200,000 but now my monthly payments are going to be something like what was it $3,400 something like that a month and now I can live here for a year not have to pay any housing payments because my neighbors are paying for everything put $100 into my pocket every month and then a year later I can move out and then put an additional $2,000 into my pocket every month because these three tenants are paying the mortgage they're paying all the house housing bills they're paying for everything else this tenant is just profit after I move out so now this new property where I just moved out of can keep paying me that $2,000 a month every single month because now your interest rate doesn't change your bank is going to let you keep this 3% interest rate which you're not allowed to get if you're buying it as an investment property"

"when you pay off your home it is a guaranteed return on your money versus here there's no guarantee"

"Do this system five times and now you have five different investment properties with very low interest rate debt that are making you a profit every single month that you're building equity on every single month that your neighbors are paying for you to live there for every single month oh and after five of them you also have $10,000 coming into your pocket as profit every single month through passive income"

"it would be more beneficial for you to pay that off instead of just paying off your mortgage because when you're paying off your 16% interest rate credit card well that's a guaranteed 16% return on your money"

"if the interest rate from your home is less than the interest rate from your investment then it makes sense for you to invest your money get a better return and then use your profits to pay down your home mortgage because now you can do it at a profit because now yeah you're paying interest to your Banker but you're making more money from Investments"

"if you get a mortgage that's smaller than that then you're going to need a non-conforming jumbo loan if you qualify for a conventional conforming mortgage then you can get a home with a down payment as small as 3%"

"The average stock market return is 10% a year historically and the average real estate return is also right around 10% a year that doesn't mean that the stock market and the real estate market are guaranteed to go up by 10% every single year it's an average meaning some years the markets go down some years they go up higher than 10% a year and if you look at it over the long term you're making 10% a year but if you don't have that sort of investing experience you might not see that same 10% return maybe you get a lower return"

"you're going to have to pay an upfront Insurance fee when you get an FHA mortgage and then you're going to have to pay an insurance fee on the back end for the life of your mortgage"

"when you pay off your home it is a guaranteed return if you're paying 5% a year on your mortgage or 6% a year or 4% it doesn't really matter what you're paying and you pay off your mortgage one year early well that's a guaranteed return on your money versus here there's no guarantee however here you could potentially get higher returns but it's not guaranteed"

"however because you're getting a lower interest rate and because you're putting 0% down you have to pay a higher upfront fee here an insurance fee with the VA mortgage than you see here or here"

"if you have other sorts of debt things like credit card debt things like your home equity lines of these are higher interest rate debts then it would be more beneficial for you to pay that off instead of just paying off your mortgage because when you're paying off your 16% interest rate credit card well that's a guaranteed 16% return on your money here when you invest your money in stocks or real estate the average return is 10% a year but when you're paying 16% to your credit card company that is a guaranteed 16% return for your credit card company but you're the one that's paying that so it's more beneficial for you to pay off these high interest rate debts instead of investing your money and instead of paying off your home because your home mortgage I'm assuming now is under 16% a year"

"fixed rate or an adjustable rate mortgage second is what interest rates are these are set by the Federal Reserve Bank third is how much your credit score is fourth is how much money you're putting down and fifth is how long your mortgage is"

"if you're paying it online there should be an option there if you're sending in a check make sure you send it in as a separate check talk to the lender talk to them make a note let them know that you want all of this money going directly towards your principal balance and it's not going to interest"

"I invest my money into my own business and startups so I have a company called Market briefs and I invest my Capital my cash into this company because I want to build this into a bigger Financial Media Company second I invest my money into real estate I talked about in previous videos how I invest my money into real estate for cash flow right now going buy houses single family homes I buy apartment complexes not for the purpose for me to live in myself but for me to rent out to other people that were now it's providing me consistent cash flow I also invest my money into stocks so now I'm investing my money into individual companies I'm investing my money into ETFs which are funds which will now I buy for appreciation because I believe in the economy I believe in the long-term health I believe in the long-term growth of the economy and I want a piece of that the stock market allows me to do that fourth I invest my money into cryptocurrency I look at cryptocurrency less as a meme opportunity just to try to flip things and make a quick profit I look at it as the future of money the future of property and the future of technology I think there's a lot of value in the blockchain and the things that it can do and I look at it as a software so I invest in it for that purpose and I also invest in physical gold which is the fifth place I invest my money and when I invest in physical gold I'm not really trying to get a return on my money per se I'm investing in physical gold as an alternative to saving money because the physical gold provides a better store of value than my cash does because cash can be printed you can create more inflation which dilutes the value of cash versus gold has to be mined it takes time effort and labor to mine a physical ouns of gold and so I know that this gold isn't producing more value but for me it's a better hedge against inflation and it's kind of like insurance against the worst case scenario"

"the longer the bank has to go without their money the riskier the investment is and so when you compare a 15-year mortgage with a 30-year mortgage a 30-year mortgage is going to seem a little bit riskier for the bank because their money is is going to be with you for 30 years and so the bank is going to charge you a little bit higher in interest with a 15-year mortgage the bank is going to get their money back in 15 years not 30 years and so they can charge you a little bit less in interest because it's less risky for the bank"

"if you really want to be able to afford a home you need to be putting down 20% Now I know that's a lot of money you want to buy a $300,000 home that's $60,000 in cash you got to put down"

"I invest my money into real estate I talked about in previous videos how I invest my money into real estate for cash flow right now going buy houses single family homes I buy apartment complexes not for the purpose for me to live in myself but for me to rent out to other people that were now it's providing me consistent cash flow"

"so what I want you to do is I want your monthly payment to be 25% of your actual take-home pay so you take the money money you're making you pay your taxes and now out of what's left 1/4 should be the maximum of how much you're paying towards your mortgage"

"I invest my money into cryptocurrency I look at cryptocurrency less as a meme opportunity just to try to flip things and make a quick profit I look at it as the future of money the future of property and the future of technology I think there's a lot of value in the blockchain and the things that it can do and I look at it as a software so I invest in it for that purpose"

"you don't want to go into a home thinking yeah you know what I'll make the sacrifice now that way in 5 years I can refinance into a better mortgage you don't want to do that because there's no way to predict what the world or what the real estate market or what the housing market is going to look like in 5 years"

"I also invest in physical gold which is the fifth place I invest my money and when I invest in physical gold I'm not really trying to get a return on my money per se I'm investing in physical gold as an alternative to saving money because the physical gold provides a better store of value than my cash does because cash can be printed you can create more inflation which dilutes the value of cash versus gold has to be mined it takes time effort and labor to mine a physical ouns of gold and so I know that this gold isn't producing more value but for me it's a better hedge against inflation and it's kind of like insurance against the worst case scenario"

"the only people that rent are losers and broke people if you want to build wealth you need to buy your home"

"as soon as you get pre-qualified you automatically have an edge over other buyers who are not pre-qualified because if I'm selling a home and I get two offers one is from somebody who's pre-qualified and one is from somebody who's not pre-qualified and you're pre-qualified and your offer is slightly lower than this person's I'm still going to take your offer even though it's less money because it's less headache and less uncertainty because you've already gotten pre-qualified part of the pre-qualification process is you getting prepared to actually get a morgage"

"so based off of these numbers and these mortgage rates and this down payment it is cheaper for you to buy this home then it would be for you to rent this home but if the going rental rate with the same property was $2,000 a month as opposed to $2,500 a month then it would be cheaper for you to rent this home than buy the home"

"The debt to income ratio is literally just a fraction where Banks look at how much debt you're making and they divide it by your income so nowadays Banks typically like to see a debt to income ratio of less than 36% so they want to see that your debt is less than 36% of your income and out of this 36% they typically don't want to see more than 28% for your mortgage so this is how much your mortgage should be Max and the rest of it can be your credit card debt your car loans whatever this is how much Banks ideally want to see but sometimes you'll see Banks stretch this total debt to income ratio from 36% up to 43%"

"half of American homeowners do not have $11,000 sitting in the bank account to protect them from a broken pipe"

"instead of sending $500 a month I want you to send in $250 every two weeks so now you're going to send in bi-weekly payments and this essentially going to end up being the same you're sending in $250 every 2 weeks or $500 over the course of every four weeks but now you're not going to pay off your debt in 112 months you're going to pay off your debt in just 95 months and now you're going to pay the same $30,000 of your principal balance which is what you owe but in the interest side of things instead of paying 25,800 you're only going to pay $21,200 so you're going to save over $4,500 in interest"

"The longer the bank has to go without their money the riskier the investment is and so when you compare a 15-year mortgage with a 30-year mortgage a 30-year mortgage is going to seem a little bit riskier for the bank because their money is is going to be with you for 30 years and so the bank is going to charge you a little bit higher in interest with a 15-year mortgage the bank is going to get their money back in 15 years not 30 years and so they can charge you a little bit less in interest because it's less risky for the bank"

"Your job is to know what you can afford for your wallet just because you can qualify for a million-dollar home doesn't mean that you can afford it and it doesn't mean that you should buy it"

"the easiest and fastest way to pay down your debt is to First have the strategy you have the financial discipline you have the financial education and once you have those things you have the system you just need more money to throw into the system that when now the system has cash to actually pay itself off and so now if you want to do that faster you need some more cash yes you can work harder at your job but if you really want to get there faster you need to know how to create new streams of income and the internet has made it more accessible than ever"

"one of the things I like to follow is a simple rule of five which says if you cannot buy five of them you cannot afford one of them"

"if you really want to be able to afford a home you need to be putting down 20% Now I know that's a lot of money you want to buy a $300,000 home that's $60,000 in cash you got to put down but if you really want to be able to afford a home you need to be putting down 20% when you put down 20% now you don't have to pay the higher fees you don't have to pay the higher interest rates and you have more equity in your home"

"what I want you to do is I want your monthly payment to be 25% of your actual take-home pay so you take the money money you're making you pay your taxes and now out of what's left 1/4 should be the maximum of how much you're paying towards your mortgage when you do that you will leave enough money for your savings and for your Investments that way you can work to build yourself wealth instead of having all of your money going into the bank to make the bank rich I want you to use your money to make yourself rich by paying a maximum of 25% of your take-home pay to your bank and then use it as much as you can to invest and Save in your own wealth"

"now you're paying $3,000 a month just to keep up with this car so now if you want to break out of thatt go out and buy a used car with cash if you were going to put $8,000 down to go out and finance this nice car take the8 Grand go out and buy a car with cash yeah it's not as nice but you don't got to worry about the payments"

"if you want to afford the home that you're buying you need to have a minimum 20% down payment so if you're buying a $400,000 home you need to have $80,000 in cash to put down to buy the home"

"the way you build wealth is by owning the assets and so if you do want to learn more but how you can start generating passive income by investing your money our team has put together a free guide"

"The debt snowball strategy is the strategy that Dave Ramsey talks about all the time what this says is you are going to list your debts not by the interest rate that you're paying but by the size of the debt and what you're going to do here is you're going to pay off the smallest debt first and then go the next smallest and then the next smallest the whole idea behind this is you're going to ignore the interest rates and you're going to pay off debts in a way where you can pay off the smallest balance first that way you can get the small wins that way you can get the psychological reassurance that you're doing something right and that you're winning here"

"here you're going to organize your debts based off of the interest rates and then you're going to pay off the the highest interest rate debt first because that's the debt that's costing you the most money because if One debt is costing you 20% a year and another debt is costing you 7% a year you're paying way more in interest on the 20% debt so you want to pay that one off first"

"instead of sending $500 a month I want you to send in $250 every two weeks so now you're going to send in bi-weekly payments and this essentially going to end up being the same you're sending in $250 every 2 weeks or $500 over the course of every four weeks but now you're not going to pay off your debt in 112 months you're going to pay off your debt in just 95 months and now you're going to pay the same $30,000 of your principal balance which is what you owe but in the interest side of things instead of paying 25,800 you're only going to pay $21,200 so you're going to save over $4,500 in interest and you're you're going to save another year of paying off this credit card bill just because now you're paying every 2 weeks instead of every month"

"the fastest way to pay down your debt is not just by following some of these tax is by getting more cash and the simplest and quickest way to get some more cash is to cut back some of your expenses but at the end of the day there's a limit to how much you can cut your expenses there's a limit to how much you can squeeze pennies out of yourself but there's no limit to how much money you can earn so what I want you to do is first you got to have the financial discipline of knowing how to live below your means because that's the discipline you need to understand how to manage your money if you don't have that discipline it doesn't matter if you're making $100,000 a year or $10 million a year if you don't know how to manage the money you have you will never be able to build wealth but once you know how to do that now I want you to think a little bit bigger how can you expand the high how can you grow the amount of money that you're making because there's no limit to how much money that you can earn"

"now you need to know how to make money on the internet because the way the internet works is people around the world are spending time on their phones and their computers and more and more people around the world are doing this now than ever before and this is a trend that is not slowing down and it's not going to slow down anytime in the near future so what I need you to do instead of just working harder at job which is great that's an accessible way for you to start earning some more money right now but if you want to really be able to scale the amount of money that you're making which you can use to now pay down your debt and you can use to help build your wealth by investing into assets you need to know how to make money on the internet the way it works is you have to understand how to create content how to drive eyeballs to whatever it is you have whatever brand you have you need to create content get eyeballs onto you and you need to learn how to turn these eyeballs into dollars"

"if you want to be able to pay down your debt and be able to build your wealth you need to have the financial discipline of knowing what you can buy and this is where you got to know what you can afford because we live in a spending culture and a debt culture where when you want something you got to have it now and I want you to have the nice things I want you to have the luxury things I want you to have the exotic expensive things I just wants you to be able to afford it first that means no more financing something that does not put money in your pocket if it's not paying you you can't Finance it"

"the reason why so many Americans are broke if you had to just pick one item it's because of how much money people are spending on their car more and more Americans now have a $1,000 monthly car payment I think it was 20% of all Americans who have a car payment have at least a $1,000 a month car payment that is a whole rent payment for a lot of the country so now when you're spending $1,000 a month just on the car payment you got to pay for the expense of gas the next thing you got to pay for is the expense of insurance the next thing you got to pay for is the expensive oil changes and then the next thing you got to pay for is the expensive maintenance on top of all of that so it's not just a $1,000 a month car payment you got to pay now you're paying $3,000 a month just to keep up with this car so now if you want to break out of thatt go out and buy a used car with cash if you were going to put $8,000 down to go out and finance this nice car take the8 Grand go out and buy a car with cash yeah it's not as nice but you don't got to worry about the payments now you take those payments and you reinvest it back into yourself"

"if you want to be able to afford it that means you got to be able to buy the whole thing without having to finance it the only exception to this that I would make is the home that you live in but now when it comes to buying things like a phone buying things like a car buying things like a sofa buying things like a TV stop financing it buy it with cash yes including that car too"

"if you cannot buy five of them you cannot afford one of them now you start to really change the way you think about spending your money if you got $1,000 in your bank account that means the most you can buy is a $200 phone or a $200 jacket or a $200 handbag and that way now you're not spending all of your money"

"the goal is not to live small for the rest of your life the goal is not to sit there and pinch pennies for the rest of your life pinching pennies is never going to make you wealthy because at the end of the day a penny saved is just a penny but you got to start by understanding how to control your spending before you start worrying about how you can earn more money because if you start earning more money without knowing how to control the spending well now you end up in a bigger Financial hole"

"the goal is to build wealth the way you build wealth is by owning the assets and so if you do want to learn more but how you can start generating passive income by investing your money our team has put together a free guide on how you can start generating passive income today and some different strategies that you can use to start investing your money for passive income"

"The first thing you got to do is you got to organize your debt you got to know how much debt you have you got to know the different types of debt that you have and you need to know how much interest these debts are costing you if you do not know this you will not be able to come up with the proper strategy to pay off your debt quickly"

"The first thing you got to do is not hire an expensive money coach or financial planner or financial adviser The first thing you need to do is just track your money money Once you're tracking money you want to make some adjustments to how you're spending of money once you make those adjustments make sure you're implementing those adjustments and then rinse and repeat as you start to get your money in order"

"if you want to get your finances in order the first thing you need to do is not hire an expensive money coach or financial planner or financial adviser The first thing you need to do is just track your money money Once you're tracking money you want to make some adjustments to how you're spending of money once you make those adjustments make sure you're implementing those adjustments and then rinse and repeat as you start to get your money in order"

"Then once you got a total number for your income the next thing you want to do is you're going to write down your expenses now same concept you're going to take out your bank statements you're going to take out your debit card statements you're going to take out your credit card statements I want you to take a look at all of your expenses and the reason why it's easier if for you use a Google sheet or Excel sheet is because it's going to be easier for you to categorize these a little bit later on but if you like paper that's fine now take out all of these and you need to know exactly where every penny went how much money did you spend on restaurants how much money you spend on groceries how much money spend on on vacations how much money you spend on your rent or your mortgage how much money did you spend on your utilities how much money did you spend on Netflix and everything in between write each one of these down then ideally you will categorize these and then you're going to write down your total expenses"

"then below that you're going to write your other numbers here how much money did you save how much money did you invest and how much money did you give to charity Once you have this right here now you have a financial spreadsheet showing you what's going on with your money because most most people and I'm just saying this generally I'm saying this statistically most Americans the vast majority of Americans have absolutely no idea of how much money they're making how much money they're spending where they're spending their money how much are they saving and how much are they investing and how much are they giving to charity"

"because when you do this you're grading yourself and you're going going to see holy crap how much money did I just spend at restaurants last month how much money did I spend going out on my car last month how much money did I spend on groceries last month and immediately you're going to start making some changes because when you see how much money you spend at groceries maybe you're going to start creating a grocery list and you're going to say unless it's on my grocery list I don't buy this thing at the grocery store if you see that you spent $600 at Benny hanana last month you're going to say okay I'm not eating out this month I'm going to go and cook my own meals this month"

"then number three is I want you to actually Implement these things that means now you have the statement for last month what do you think you're going to do next month yes you're going to do this again that means month after month and it shouldn't take you that long after you do it the first time the first time it's going to take you the longest the second time it's going to take you a little bit less time but by the third time you're going to be able to do it in 15 to 30 minutes every month you want to make a little sheet of how much money you're making and what's going on with your money that way you can understand what's going on with their money because it's going to help you make better decisions with their money"

"then it's number four rinse and repeat because now what's going to happen is once you take a look at this two months down the line you're going to have a much better Financial grasp of your money you're going to see how much money you're making you're going to know what your expenses are like you're going to have a better control of your expenses and now you're going to be looking at how can I optimize my expenses how many of these bills can I renegotiate how many of these bills can I get rid of because I'm not using them before can we downsize the car do we really need a car that's expensive that takes premium gas that has $782 a month just in the monthly payment without including all the other fees can you downgrade on these items"

"The reason why you want to keep these in separate bank accounts is because if you keep all of your money in One bank account how do you know which money is supposed to be invested which money is supposed to be saved for an emergency and which money is supposed to be spent and you might say oh I'm good with the money I know that $3,000 that's in there is just for my savings and this $8,000 there is for my investments and the other money I can spend well when it's all in one bank account it's very easy to accidentally spend your savings money and it's very easy to accidentally Finance your investment money"

"The biggest shift here when it comes to getting a hold of your finances turning your money around and becoming wealthy isn't just creating some Financial system and building some Financial education it's also about the mindset of money because a lot of times we grew up with no Financial education and no idea of how we're supposed to use and spend our money and so most people assume now when you start making money is you got to go out and spend your money this is America's consumerism mentality ha or to love it that is what it is and it's great for people who understand this because now you own the businesses you own the Investments That profit when people spend their money but when you don't understand this you're the one that's spending all their money going into debt to make the rest of the country Rich at your expense"

"This means number one if you have $1,000 in your bank account you can't go out and spend $11,000 and that means if you have $1,000 in your bank account you cannot afford a $1,000 jacket you cannot afford a $1,000 handbag you cannot afford a $1,000 iPhone because there's a difference between being able to afford something and being able to buy something"

"The only exception to this that I would make is the home that you live in but now when it comes to buying things like a phone buying things like a car buying things like a sofa buying things like a TV stop financing it buy it with cash yes including that car too"

"The reason why so many Americans are broke if you had to just pick one item it's because of how much money people are spending on their car more and more Americans now have a $1,000 monthly car payment I think it was 20% of all Americans who have a car payment have at least a $1,000 a month car payment that is a whole rent payment for a lot of the country"

"The reason why so many Americans are broke if you had to just pick one item it's because of how much money people are spending on their car more and more Americans now have a $1,000 monthly car payment I think it was 20% of all Americans who have a car payment have at least a $1,000 a month car payment that is a whole rent payment for a lot of the country so now when you're spending $1,000 a month just on the car payment you got to pay for the expense of gas the next thing you got to pay for is the expense of insurance the next thing you got to pay for is the expensive oil changes and then the next thing you got to pay for is the expensive maintenance on top of all of that so it's not just a $1,000 a month car payment you got to pay now you're paying $3,000 a month just to keep up with this car"

"if you were going to put $8,000 down to go out and finance this nice car take the8 Grand go out and buy a car with cash yeah it's not as nice but you don't got to worry about the payments now you take those payments and you reinvest it back into yourself"

"if you cannot buy five of them you cannot afford one of them now you start to really change the way you think about spending your money if you got $1,000 in your bank account that means the most you can buy is a $200 phone or a $200 jacket or a $200 handbag and that way now you're not spending all of your money"

"Pinching pennies is never going to make you wealthy because at the end of the day a penny saved is just a penny but you got to start by understanding how to control your spending before you start worrying about how you can earn more money because if you start earning more money without knowing how to control the spending well now you end up in a bigger Financial hole"

"The reason why so many people don't want to do this is because well it's going to take me a long time to start making any money for my investments and you're 100% right that's why I call it a decade of sacrifice but if you can put in that decade of living smaller and we're going to earn more money that way we can invest more aggressively after a decade you're going to have a whole new stream of income maybe a whole new asset that's producing more money for you that you can start using to live a better life but most people are not willing to put in that time most people are not willing to put in that work most people are not willing to put in the effort or make those sacrifices that's why most people will never become wealthy"

"The wealthy people are doing in this economic system is you're working to make more money to buy more Investments and if you can buy more Investments these investments will continue to make you money because of the way our economic system works and now if these Investments are making you more money well now you can take the money your Investments make and start to use that to live a bigger lifestyle and this takes time to do"

"the first thing you got to do is you got to understand how to track your money once you can start tracking your money you make the adjustments you start implementing and you keep working on this then you got to figure out how can you control the spending once you can figure out how to control the expenses because now you got the income coming in you got to control these expenses so you have more money to invest then is how can you earn more money"

"the question is how do you go from $40,000 a year to $400,000 a year and at first you might hear that and say how in the world can somebody like me go from 40 to 400 it doesn't make any sense but when you start asking that question you're going to start looking for new answers now you're going to start watching different YouTube videos you're going to start watching YouTube videos and how do you earn more money how do you start a business how do you start a side hustle how can you increase your income how can you change your career how can you get a new certificate then you can start doing different things and as you start doing different things now you're going to start seeing your income change as well it's not going to happen overnight this is a process remember a decade of sacrifice is more than just 6 months we're talking about a decade of work effort time and learning to put in the work to put in the effort that way you can start getting the rewards of your effort after putting in the work after putting in the time most people put in the work for six months and say where's my reward but you got to keep coming back putting in the Reps and understand now what are the questions you got to ask"

"I'm going to buy this multif family building for a million dollars but I don't have a million dollar in the bank so now I got to go to the bank and get this commercial real estate loan that way I have the cash to buy this investment property"

"So now if you wanted to buy the same $1 million property and you put down $200,000 now your monthly mortgage payments are going to drop from $4,800 a month to $3373 a month"

"if you buy this property like a 4 unit home like I talked about because four units count as a home then the FHA limit increases"

"and so now you have five different investment properties with very low interest rate debt that are making you a profit every single month"

"if the interest rate from your home is less than the interest rate from your investment then it makes sense for you to invest your money get a better return and then use your profits to pay down your home mortgage"

"So the question is now can you get a better return on your money by not investing your money into paying down your mortgage and investing your money in yourself"

"The average stock market return is 10% a year historically and the average real estate return is also right around 10% a year"

"if you have other sorts of debt things like credit card debt things like your home equity lines of these are higher interest rate debts then it would be more beneficial for you to pay that off instead of just paying off your mortgage"

"when you're paying off the 16% interest rate credit card well that's a guaranteed 16% return on your money"

"Banks typically like to see a debt to income ratio of less than 36%"

"you want to have a credit score of at least 760 or above if you're looking for the best interest rates"

"it doesn't make sense to get an arm when interest rates are already lower than they've ever been in the future the only way interest rates can go are up"

"if you qualify for a conventional conforming mortgage then you can get a home with a down payment as small as 3%"

"you can qualify for an FHA mortgage in some instances with a credit score lower than 620"

"USDA United States Department of Agriculture loans these are more for Rural homes this is for people who are lower income or moderate income this allows you to buy a home with 0% down payment in certain instances"

"VA loans let you qualify for mortgages with 0% down"

"when you compare a 15-year mortgage with a 30-year mortgage a 30-year mortgage is going to seem a little bit riskier for the bank because their money is is going to be with you for 30 years and so the bank is going to charge you a little bit higher in interest"

"your bank is going to say that they want your monthly pay payment to be something like 28% of your gross take-home pay"

"I want your monthly payment to be 25% of your actual take-home pay"

"real estate prices don't always go up"

"Real estate never goes down in value"

"if you don't have any savings like the majority of Americans you cannot afford to own your home"

"half of American homeowners do not have $11,000 saved up for an emergency"

"if you want to afford the home that you're buying you need to have a minimum 20% down payment"

"The solution to your debt problem is not going out and taking on more debt"

"Your credit card company is skinning you alive"

"The debt Avalanche model... you're going to organize your debts based off of the interest rates and then you're going to pay off the the highest interest rate debt first"

"The debt snowball strategy... you're going to pay off the smallest debt first"

"If you follow that model... instead of sending $500 a month I want you to send in $250 every two weeks... you're going to pay off your debt in just 95 months and now you're going to pay the same $30,000 of your principal balance... you're only going to pay $21,200 [in interest]"

"The fastest way to pay down your debt is not just by following some of these tax is by getting more cash and the simplest and quickest way to get some more cash is to cut back some of your expenses"

"There's no limit to how much money that you can earn"

"The internet has made it more accessible than ever... people around the world are spending time on their phones and their computers and more and more people around the world are doing this now than ever before and this is a trend that is not slowing down"

"If you don't understand this, you're the reason why everybody else gets to drive around in the nice cars. You're the Reason everybody else gets to fly around in the private jets and fly first class. You're the Reason everybody has those nice homes is because you keep spending all of your money."

"stop financing it buy it with cash yes including that car too"

"More and more Americans now have a $1,000 monthly car payment"

"If you cannot buy five of them, you cannot afford one of them."

"it's going to take me a long time to start making any money for my investments... we're talking about a decade of sacrifice"

"if you want to get your finances in order the first thing you need to do is not hire an expensive money coach or financial planner or financial adviser the first thing you need to do is just track your money"

"once you get paid in One bank account you can automatically have some of this money move to your second bank account so you have three different bank accounts"

"Wealthy people are working to make more money to buy more Investments and if these Investments are making you more money well now you can take the money your Investments make and start to use that to live a bigger lifestyle"

"And then you're going to have to pay the additional $2500 a month to live, manage the property, you know, property taxes and everything else. That means every single month out of your pocket, you're going to have to pay $500 to live here, but you also have a million dollar property that you're building equity in each and every month."

"And then you're going to have to pay the additional $2500 a month to live, manage the property, you know, property taxes and everything else. That means every single month out of your pocket, you're going to have to pay $500 to live here, but you also have a million dollar property that you're building equity in each and every month."

"So now if you buy this home and you live here and then you can have your tenants, your neighbors pay you rent every single month and now your neighbors are paying for your mortgage, they're building you equity in your home and now you can sell this property your home for $1.2 million, you lived in this home free, you built Equity free thanks to your neighbors and now you can sell this property and walk away with a couple $100,000 cash in your pocket and yes that's taxfree"

"Do this system five times and now you have five different investment properties with very low interest rate debt that are making you a profit every single month that you're building equity on every single month that your neighbors are paying for you to live there for every single month Oh, and after five of them you also have $10,000 coming into your pocket as profit every single month through passive income"

"so if you look at the same mortgage over 30 years or 15 years your 15-year mortgage is going to have a lower interest rate but your monthly payments are going to be higher because you have to pay the mortgage off within 15 years"

"so if you look at the same mortgage over 30 years or 15 years your 15-year mortgage is going to have a lower interest rate but your monthly payments are going to be higher because you have to pay the mortgage off within 15 years"

"if you want to really be able to afford a home, you need to be putting down 20% when you put down 20%, now you don't have to pay the higher fees, you don't have to pay the higher interest rates, and you have more equity in your home."

"I don't want you to pay that much money towards your mortgage because then on top of that you got to pay your taxes, you got to pay all of your other bills, your utility bills, your car payments, everything else. I don't want you to do that. So what I want you to do is I want your monthly payment to be 25% of your actual take-home pay."

"the only people that rent are losers and broke people if you want to build wealth you need to buy your home that way you can start building Equity you've probably heard something like that before but if that's so true why is the fastest growing demographic of renters rich people"

"if you want to really be able to afford a home, you need to be putting down 20% when you put down 20%, now you don't have to pay the higher fees, you don't have to pay the higher interest rates, and you have more equity in your home."

"if you have credit card debt, your credit card company is skinning you alive, and right now your sole focus should be to pay down your high interest debt that way you can afford to buy a home."

"The debt snowball strategy is the strategy that Dave Ramsey talks about all the time. What this says is you are going to list your debts not by the interest rate that you're paying, but by the size of the debt and what you're going to do here is you're going to pay off the smallest debt first and then go the next smallest and then the next smallest."

"here you're going to organize your debts based off of the interest rates and then you're going to pay off the the highest interest rate debt first because that's the debt that's costing you the most money"

"instead of sending $500 a month I want you to send in $250 every two weeks. So now you're going to send in bi-weekly payments, and this essentially going to end up being the same, you're sending in $250 every 2 weeks or $500 over the course of every four weeks, but now you're not going to pay off your debt in 112 months, you're going to pay off your debt in just 95 months and now you're going to pay the same $30,000 of your principal balance, which is what you owe, but in the interest side of things instead of paying 25,800, you're only going to pay 21,200."

"The fastest way to pay down your debt is not just by following some of these hacks, it's by getting more cash and the simplest and quickest way to get some more cash is to cut back some of your expenses. But at the end of the day, there's a limit to how much you can cut your expenses. There's a limit to how much you can squeeze pennies out of yourself, but there's no limit to how much money you can earn."

"the internet has made it more accessible than ever. That doesn't mean it's easy, it's actually very hard, because not everybody has access to the internet, but I want you to do is understand how you can turn the internet into a machine that's printing you money."

"I want you to be able to afford it. That means no more financing something that does not put money in your pocket. If it's not paying you, you can't finance it."

"so now if you want to break out of that, go out and buy a used car with cash. If you were going to put $8,000 down to go out and finance this nice car, take the 8 grand, go out and buy a car with cash. Yeah, it's not as nice, but you don't got to worry about the payments."

"So that means one of the things I like to follow is a simple rule of five, which says if you cannot buy five of them, you cannot afford one of them."

"The goal is not to live small for the rest of your life. The goal is not to sit there and pinch pennies for the rest of your life. Pinching pennies is never going to make you wealthy, because at the end of the day, a penny saved is just a penny."

"The reason why so many people don't want to do this is because, well, it's going to take me a long time to start making any money for my investments. And you're 100% right, that's why I call it a decade of sacrifice. But if you can put in that decade of living smaller and we're going to earn more money, that way we can invest more aggressively, after a decade you're going to have a whole new stream of income, maybe a whole new asset that's producing more money for you that you can start using to live a better life."

"The wealthy people are doing in this economic system is you're working to make more money to buy more investments. And if you can buy more investments, these investments will continue to make you money because of the way our economic system works."

"once you can control this, then it's all about how can you grow this. And as you grow this, remember the key is to grow how much money you're putting into investments. If you can grow how much money you're putting into your investments, you're going to be able to grow how much wealth you will be able to build."