This Is How Much Money You NEED To Invest EVERY PAYCHECK To Retire Wealthy
Published: 2024-02-11
Status:
Available
|
Analyzed
Published: 2024-02-11
Status:
Available
|
Analyzed
Predictions from this Video
Incorrect: 0
Prediction
Topic
Status
Future retirement income needs to be significantly higher than current spending due to inflation.
"your $50,000 a year that you're thinking of is today's money $50,000 a year today is very different than $50,000 a year 50 years from now"
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Shift focus from spending money on consumables to acquiring assets that generate income.
"when I want you to think about money I want you to think about money in terms of how many assets you can buy an asset is something that makes you money"
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A single real estate investment property can generate consistent monthly profit.
"after I bought my first real estate investment property it was making me something like $250 a month in profit every single month"
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The income potential from real estate scales linearly with the number of properties owned.
"from two properties I could make $500 a month with 10 properties I can make $2,500 a month with a 100 properties I can make $25,000 a month every single month passively"
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A minimum of 15% of income should be invested annually.
"15 cents is the minimum you should be investing"
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Consistent investing, rather than speculative ventures, is the key to wealth building for most individuals.
"investing is the real secret to building weal wealth for regular people it is not building the next Amazon it is not finding the next hot stock before it pops it is not winning the lottery"
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A significant portion of the American population is not investing for retirement.
"half of America is not investing any money not a single penny at all"
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401(k)s are not sufficient as the sole retirement or investment vehicle.
"your 401k was never intended to be your sole retirement or investment plan"
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The average 401(k) contribution rate is only 7% of income.
"the average 401k contribution is just 7% of your income"
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Investing at least 15% of income is crucial for wealth building.
"investing a minimum of 15% of your income is so important"
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Investing 15% of income over a career can result in approximately $900,000 by retirement, even with a conservative 4% return.
"if you invested this 15% a year and this $400,000 went into your Investments and you got a below average return for the course of your life and you only got a 4% and the return on your money... then this $400,000 will grow to right around $900,000"
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A 7% average annual return on invested capital can grow savings to $1.9 million.
"if you got an average return of 7% a year then there 400 ,000 you invested over your time would grow to $1.9 million"
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A 10% average annual return can grow invested capital to $4.8 million.
"if you could grow your money by 10% a year... then your money would not grow to $1.9 million it will grow to $4.8 million"
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The purchasing power of $100,000 will be significantly less in 45 years due to inflation.
"in 45 years $100,000 a year is not going to be as much as $100,000 a year today"
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Maintaining a current lifestyle in retirement may require an annual income of $100,000.
"if you want to continue maintaining your lifestyle at 65 that means you got to pull out $100,000 a year"
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Social Security and pensions are becoming less reliable sources of retirement income.
"Social Security is becoming a thing of the past and pensions are becoming history"
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An aggressive investment approach is necessary for personal financial security.
"aggressive investor... you need to be an aggressive investor"
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Dividend-paying stocks provide regular income payments.
"investing in dividend paying stocks now you're making money every quarter or every year from your stocks"
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Rental properties are a method for generating passive income and cash flow.
"investing in rental properties investment real estate now you're creating passive income cash flow"
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Older individuals who are starting to invest should do so more aggressively.
"the older you are the more aggressively that you need to invest"
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Investments can be made through retirement accounts (401k, IRA) or non-retirement accounts.
"you have one way investing your money which is through retirement accounts... and then the second way that you can invest your money is through non-retirement accounts"
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Retirement accounts offer tax deferral and tax-free growth to help fund retirement.
"the whole purpose of a retirement account is literally to help fund your retirement because when you invest your money in these accounts you can kind of get a tax deferral right now and then your money can grow taxfree"
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Investment amounts in 401(k)s and IRAs are limited by government regulations; personal retirement lifestyle goals should dictate investment levels.
"your 401k and Ira has limits and you got to make sure now that you're not investing your money based off of what the government limits you at you got to be investing your money based off of the way you want to live your life in retirement"
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Growth and startup companies in the stock market offer potential for rapid wealth growth but with higher risk.
"if you want to see your money grow quickly and you don't mind taking on more risk then you should consider investing your money in the stock market especially in growth companies and these kind of more startup companies"
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Blue-chip companies offer steady, slower growth with lower risk.
"if you just want to see slow and steady growth in your money then you can look at investing your money in more Blue Chip companies"
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Individual stock picking is demanding and not suitable for everyone due to the required effort and research.
"the stock picking game is not for most people because picking stocks requires a lot of work a lot of research and a lot of upkeep"
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Index funds and ETFs offer diversified exposure to many companies, reducing risk and workload compared to individual stock picking.
"what you can do is invest in something called a fund like an index fund or an ETF because these funds give you exposure to a whole bunch of different companies and so you have less risk you can put in less work"
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Dividend-paying stocks are recommended for investors seeking to generate passive income without selling assets.
"if you're looking for income where now you can create cash flow or passive income coming into your account every month or every year where now you can have money in your hands without selling your assets then you want to be investing your money in things like dividend paying stocks"
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Owning rental properties like houses or apartment complexes generates monthly rental income.
"you can invest your money in real estate because now if you own a house or you own an apartment complex now every single month the people that are living in your real estate or using your real estate have to pay you rent every single month"
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Real estate can serve as a safe place to store significant amounts of cash.
"real estate is also a really good store for your money because if you have a lot of cash and you want to put it somewhere safe then real estate is a good place to do it"
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Consistency in investing is crucial; it is not a one-time action.
"you got to be consistent and you got to keep investing your money because investing is not a one-time thing"
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Market crashes present opportunities to acquire assets at significantly reduced prices.
"if you see a market crash then come and buy as much as you can then because that gives you the opportunity to buy assets for pennies on the dollar"
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Automating 15% of each paycheck for investment is recommended.
"anytime you get a paycheck 15% of that should be automatic invested"
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Building significant wealth may require a decade of dedicated effort and sacrifice.
"a decade of sacrifice"
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Many people lack a system for managing money, leading to confusion about where their income goes.
"you got to start with this if you want to get your finances in order because most people's financial statements look like this you make money you spend money and then you wonder where all of your money went"
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It is recommended to purchase items, including cars, with cash rather than financing.
"stop financing it buy it with cash yes including that car too"
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High car payments are identified as a primary reason for many Americans' financial struggles.
"the reason why so many Americans are broke... it's because of how much money people are spending on their car"
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A rule of thumb for affordability: if you cannot buy five of an item, you cannot afford one.
"if you cannot buy five of them you cannot afford one of them"
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Wealthy individuals prioritize using increased income to acquire more investments.
"wealthy people are working to make more money to buy more Investments"
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Most people work to enrich companies by spending their money, rather than investing to enrich themselves.
"most people are working hard to to make somebody else rich... you are working hard to make every company spend your money at richer"
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Wealthy individuals fund their lifestyle with income generated by their assets, not their direct labor.
"the number one reason why wealthy people become and stay wealthy is because they do not spend their hard-earned money... they're spending money that they're money worked hard to earn"
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Wealth is often lost within three generations due to a lack of the wealth-building mindset in subsequent generations.
"most wealthy families lose that wealth within three generations because that mindset that it took somebody to build that wealth is different than the mindset of somebody who just wants to spend the money"
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Statistically, over 50% of Americans end up in a worse financial situation after earning more money.
"when the majority of people more than 50% of Americans make more money they end up in a bigger Financial hole"
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Over 50% of Americans earning six figures are living paycheck to paycheck.
"more than 50% of Americans who are making over six figures a year are living paycheck to paycheck"
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Focusing solely on earning more money is statistically ineffective for fixing financial problems if spending habits are not controlled.
"the first thing everybody says you should do is figure out how you can earn more money except that doesn't work statistically when most people earn more money they end up in a bigger Financial hole"
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0% APR credit cards are often perceived as 'free money,' leading to increased spending and profitability for lenders.
"when most people hear 0% APR they think zero cost that's why Industries selling you 0% APR are so profitable because they are giving you the illusion of free money"
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The initial steps to address financial problems involve stopping excessive spending and prioritizing high-interest debt repayment.
"you got to stop the financial bleeding number two is you got to figure out how to pay down your high interest debts"
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Significant spending cuts, including dining out, vacations, and luxury purchases, are necessary.
"you got to number one stop eating at of restaurants number two stop going out on vacations number three stop going to the Gucci store"
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Negotiating lower bills with service providers like cable, internet, and phone companies can save money.
"renegotiate some of your bills lower Call up your cable company your internet company your phone company"
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Tracking finances is essential for optimization, just as it is in business.
"if you cannot track it you can't optimize it let the exact same thing here with your money"
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Financial tracking enables living within one's means, avoiding overspending.
"that's going to allow you to finally start living within your means meaning you're no longer going out of your means"
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Credit card interest rates can range from 15% to 28%, making them a significant cost.
"your Visa your MasterCard your American Express your credit card company is charging you 15 20 25 sometimes 27 28% in interest on every dollar that you spend that you don't pay back in time"
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Paying down high-interest debt should be the primary financial focus.
"the first thing you got to do is you got to pay down this High interest debt first"
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Control spending habits before utilizing 0% APR credit cards to avoid accumulating more debt.
"before you move your money into a 0% APR credit card the first thing you got to do is figure out how to control the spending"
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The purpose of earning more money should be to accelerate debt repayment, saving, and wealth building.
"you're getting more money that way you can pay down this High interest debt faster and that way you can invest more money save more money and build more wealth"
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Wealthy individuals reinvest money to generate more money, which then funds their lifestyle purchases.
"wealthy people make money to make more money they don't make money to drive a faster car they let the money that the money makes buy them that faster car"
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A lifestyle adjustment may involve downgrading to more affordable vehicles like a used Toyota or Honda.
"you got to make a lifestyle adjustment and that means now you might need a downsizer car get rid of that expensive car and go to a used Toyota a Corolla or a Toyota Camry or a Honda Accord"
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Prioritizing true financial freedom and wealth over the appearance of wealth is a key decision.
"what's more important to you would you rather be a millionaire would you rather be wealthy would you rather have have that Financial Freedom or do you want to look rich so everybody else thinks that you're just part of the club"
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Stocks, real estate, and businesses are considered the most proven assets for building wealth over the past century.
"things like stocks things like real estate things like businesses these are the three most time-tested and proven assets that have built more wealth than anything else over the last century"
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Shift from being a consumer to a producer by investing in assets.
"instead of just being a consumer you want to be the producer"
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Passive investors should seek low-fee funds that provide long-term exposure to assets they believe in.
"if you want to be a passive investor... you should be looking for... a fund that gives you exposure to something that you believe in for the long term that doesn't charge you a lot in fees"
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Actively managed funds come with higher fees, whereas passively managed funds are typically lower cost.
"the downfall with that is you're going to pay higher fees versus a passively managed fund which is going to be managed by a computer that's going to give you exposure to some certain index or group of stocks"
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VTI (total stock market), SPY/VO (S&P 500), DIA (Dow Jones), and QQQ (NASDAQ) are examples of ETFs for investment research.
"vti is a total Stock Market ETF... spy and vo which invest in the S&P 500... DIA which is the ticker symbol for an ETF this gives the exposure to the Dow Jones... QQQ is an ETF that gives the exposure to the NASDAQ"
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Automate investments by setting up regular automatic withdrawals and deposits from your account.
"you're going to create an automation... every week every two weeks or every month money is automatically going to be pulled out of your account and automatically invested"
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During market downturns, it is advisable to maintain passive investment strategies and continue investing for the long term.
"when you go through an economic downturn or a recession or a market crash you turn it off or you sell that's not what you want to do with this passive strategy you want to be investing for the long term"
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The primary focus when investing in real estate should be on generating monthly cash flow, not just property appreciation.
"when I invest in real estate the number one thing that I'm looking for is not how much can I sell this property for... is how much cash flow will I get"
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A target of 7% cash-on-cash return is desirable for real estate investments, ensuring profit after expenses.
"I'm looking for a 7% cash onh return that means for every dollar that I invest I want 7 cents in cash flow after paying for all of my expenses"
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The majority of startup investments fail, making it a high-risk, high-reward endeavor.
"most of the startups that I invest in will go to zero that's just the nature of startup investing"
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Wefunder, Republic, and StartEngine are prominent online platforms for investing in startups.
"we funder one is Republic one is start engine these are three of the largest platforms on the internet that allow you to invest in these types of startups"
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Investments can yield returns through appreciation (increase in value) or cash flow (regular income).
"appreciation... and cash flow"
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The speaker prioritizes cash flow from investments to fund their lifestyle, valuing its stability over pure appreciation.
"for me the bulk of my entire Investment Portfolio produces cash flow because I like Investing For Cash Flow my goal is to use this cash flow for my investments to live my life"
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Income generated from investments (dividends, rent, profits) is taxable.
"when you get this type of cash flow you also have to pay taxes on this income whether it's dividends or rental income or profit you have to pay taxes on this income"
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Even if dividends are automatically reinvested, they are still taxable income.
"if a company is paying you a dividend and you automatically reinvest this dividend you never touch it it never even hits your bank account cuz it automatically goes back to buy you more stocks well you still have to pay taxes on the dividend income"
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Companies that pay out dividends may experience slower growth compared to those that reinvest profits back into the business.
"a company is now taking the cash out of its company and giving it to its owners which means it's not going to be growing as fast"
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Investing in dividend-paying ETFs, index funds, or mutual funds offers diversification for dividend income.
"invest in something like a fund maybe a dividend paying ETF a dividend paying index fund a dividend paying mutual fund"
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Rental income must cover all property expenses and generate profit for a real estate investment to be successful.
"rent has to be enough to cover your property taxes Insurance your maintenance your management fees any vacancy costs and then if you have any debt cover that as well and then put some money in your pocket each and every month"
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Focus on accumulating monthly cash flow from real estate investments rather than solely relying on property appreciation.
"I want to make sure I can make it profit in my cash flow every single month and just keep working to accumulate the cash flow"
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A balanced investment portfolio including stocks and real estate can be beneficial, but individual strategies should be personalized.
"person I invest in stocks and I invest in real estate it's just something that I'm interested in you don't have to go out and blindly follow anybody else"
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It is recommended to invest in taxable accounts in addition to 401(k)s and IRAs for comprehensive retirement planning and wealth building.
"this is not where your retirement planning should end even if you have a 401k and the IRA I still want you now to invest in addition to that to the taxable retirement accounts"
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The speaker's first real estate investment generated $250 per month in profit.
"after I bought my first real estate investment property it was making me something like $250 a month in profit every single month"
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Owning 10 properties is projected to generate $2,500 per month in profit.
"with 10 properties I can make $2,500 a month"
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The speaker advocates for a 75/15/10 plan: spend a maximum of 75%, invest a minimum of 15%, and save a minimum of 10% of income.
"if you're subscribed to our Channel chances are you've heard me talk about our 751 1510 plan which says for every dollar that you earn 15 cents is the minimum you should be investing 10 cents is the minimum you should be saving and 75 cents is the maximum you should be spending"
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Investing $400,000 with a 4% average annual return is projected to grow to approximately $900,000.
"if you invested this 15% a year and this $400,000 went into your Investments and you got a below average return for the course of your life and you only got a 4% and the return on your money if you were able to get a 4% average return on your money over your lifetime then this $400,000 will grow to right around $900,000"
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Investing $400,000 with a 7% average annual return is projected to grow to $1.9 million.
"if you got an average return of 7% a year then there 400 ,000 you invested over your time would grow to $1.9 million"
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Investing $400,000 with a 10% average annual return is projected to grow to $4.8 million.
"and if you could grow your money by 10% a year which is just a little bit above average especially when you account for inflation then your money would not grow to $1.9 million it will grow to $4.8 million"
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An individual starting at $30,000/year with a 3% annual income growth will be making approximately $106,000/year by age 65.
"if you were 21 today and you're makinging $30,000 a year by the time you're 65 if your income Grows by 3% a year you're going to be making something like $106,000 a year by the time you're 65"
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For faster growth and higher risk tolerance, investing in the stock market, particularly in growth and startup companies, is recommended.
"if you want to see your money grow quickly and you don't mind taking on more risk then you should consider investing your money in the stock market especially in growth companies and these kind of more startup companies"
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For slow and steady growth with lower risk, investing in established Blue Chip companies is suggested.
"if you just want to see slow and steady growth in your money then you can look at investing your money in more Blue Chip companies"
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To generate cash flow and passive income without selling assets, investing in dividend-paying stocks, which typically pay quarterly, is advised.
"if you're looking for income where now you can create cash flow or passive income coming into your account every month or every year where now you can have money in your hands without selling your assets then you want to be investing your money in things like dividend paying stocks because dividend paying stocks typically pay you a check every 3 months"
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Investing in real estate, such as houses or apartment complexes, generates monthly rental income.
"or you can invest your money in real estate because now if you own a house or you own an apartment complex now every single month the people that are living in your real estate or using your real estate have to pay you rent every single month"
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Using $8,000 cash to buy a car instead of financing a nicer one, and reinvesting the saved payment money, is suggested.
"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 now you take those payments and you reinvested back into yourself"
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The 'rule of five' suggests that if you can't afford to buy five of an item, you can't afford one.
"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"
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Over 50% of Americans earning six figures are living paycheck to paycheck.
"more than 50% of Americans who are making over six figures a year are living paycheck to paycheck"
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Building true wealth requires time, dedication, and sacrifice, allowing for the purchase of nice things for oneself and loved ones.
"if you want to build true and real wealth buy your parents something nice buy yourself something nice buy our spouse something nice but it requires time dedication and sacrifice"
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Earning more money statistically leads to a larger financial hole for most Americans who lack savings and investments.
"the majority of Americans are broke the majority of Americans have little to no savings and the majority of Americans have little to no Investments this is where the first thing everybody says you should do is figure out how you can earn more money except that doesn't work statistically when most people earn more money they end up in a bigger Financial hole"
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0% APR credit cards create an illusion of free money, leading to increased spending and deeper debt once promotional periods expire.
"everyone says just move this credit CR card debt to a 0% APR credit card that way you don't have to worry about the interest anymore except that doesn't work either when most people hear 0% APR they think zero cost that's why Industries selling you 0% APR are so profitable because they are giving you the illusion of free money so you can buy whatever you want and worry about the price later"
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A five-step plan to fix being broke includes: stop financial bleeding, pay down high-interest debt, earn more money, make lifestyle adjustments, and let money generate more money.
"the five things you need to do are number one you got you got to stop the financial bleeding number two is you got to figure out how to pay down your high interest debts if you have any number three is you got to figure out how to get more money number four is you got to make a lifestyle adjustment and number five is you got to let your money make you more money"
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Understanding where money is going is essential for optimizing it.
"if you don't know where your money is going how in the world are you going to be able to optimize your money"
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Credit card companies charge interest rates ranging from 15% to 28% on unpaid balances.
"the credit card company is charging you 15 20 25 sometimes 27 28% in interest on every dollar that you spend that you don't pay back in time"
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The speaker prioritizes investing for cash flow, aiming to use this passive income to fund their lifestyle even when not actively working.
"for me the bulk of my entire Investment Portfolio produces cash flow because I like Investing For Cash Flow my goal is to use this cash flow for my investments to live my life because cash flow this cash flow that comes in is going to come in month after month year after year even when I'm not working"
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Investing in a stock is equivalent to buying a piece of ownership in that business.
"if you want to invest in a company in the stock market what you're doing is you're literally buying a business"
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Dividend-paying stocks provide investors with a cash payment simply for owning the stock.
"some companies on the stock market not all of them but some companies on the stock market pay what's called a dividend a dividend is a cash payment that you get as an investor for doing nothing except owning the stock"
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Dividend-paying companies typically distribute dividends on a quarterly basis (every three months).
"companies that pay a dividend generally pay out this dividend quarterly meaning every 3 months"
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Investing in a Total Stock Market ETF provides exposure to the entire stock market.
"if you invest in a fund that gives you exposure to the total stock market"
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SPY and VO are ETFs that invest in the S&P 500.
"spy and vo which invest in the S&P 500 these are S&P 500 ETFs"
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DIA is an ETF providing exposure to the Dow Jones Industrial Average.
"DIA is an ETF that gives the exposure to the Dow Jones"
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QQQ is an ETF that provides exposure to the NASDAQ.
"QQQ is an ETF that gives the exposure to the NASDAQ"
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The speaker targets a 7% cash-on-cash return for real estate investments, meaning 7% of invested capital as profit after expenses.
"I'm looking for a 7% cash onh return that means for every dollar that I invest I want 7 cents in cash flow after paying for all of my expenses"
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The majority of startups an investor puts money into are expected to fail (go to zero).
"most of the startups that I invest in will go to zero"
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Wefunder, Republic, and StartEngine are major online platforms for investing in startups.
"one is we funder one is Republic one is start engine these are three of the largest platforms on the internet that allow you to invest in these types of startups"
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The speaker's investment portfolio is primarily focused on generating cash flow.
"the bulk of my entire Investment Portfolio produces cash flow because I like Investing For Cash Flow"
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An investment of $1,000 generating a 10% cash flow return would yield $100 in profit after one year.
"if you invested $1,000 into this asset you're going to generate $100 after one year of cash flow"
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An investment of $100,000 generating a 10% cash flow return would yield $10,000 per year.
"if you invested $100,000 then you're only generating $10,000 a year"
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Dividends are typically paid out by companies every three months (quarterly).
"companies that pay a dividend generally pay out this dividend quarterly meaning every 3 months"
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Investing in the VTI ETF provides exposure to the entire U.S. stock market.
"vti is a total Stock Market ETF meaning when you invest in this one ticker symbol if you invest in bti you're essentially investing in the entire stock market"
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SPY and VO are ETFs that track the S&P 500 index.
"spy and vo which invest in the S&P 500 these are S&P 500 ETFs"
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DIA is an ETF that provides exposure to the Dow Jones Industrial Average.
"DIA is an ETF that gives the exposure to the Dow Jones"
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QQQ is an ETF that provides exposure to the NASDAQ 100 index.
"QQQ is an ETF that gives the exposure to the NASDAQ"
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The speaker targets a 7% cash-on-cash return on real estate investments, meaning 7% of the invested capital is expected as profit annually after expenses.
"I'm looking for a 7% cash onh return that means for every dollar that I invest I want 7 cents in cash flow after paying for all of my expenses"
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A significant majority of startup investments are expected to result in a complete loss of capital.
"most of the startups that I invest in will go to zero"
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Wefunder, Republic, and StartEngine are major online platforms for investing in startup companies.
"one is we funder one is Republic one is start engine these are three of the largest platforms on the internet that allow you to invest in these types of startups"
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