STEP BY STEP: How To Break Out Of The Financial Rat Race (& Become Wealthy)
Published: 2024-05-26
Status:
Available
|
Analyzed
Published: 2024-05-26
Status:
Available
|
Analyzed
Predictions from this Video
Incorrect: 0
Prediction
Topic
Status
A negative or 'poor' mindset is identified as the primary obstacle to achieving financial success.
"The biggest disability that you can have is a poor mindset because a poor mindset will stop you from achieving anything."
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A positive and forward-thinking mindset is crucial for success, as a negative mindset can pre-emptively shut down opportunities.
"if you do not have a good mindset if you don't have a positive and a Forward Thinking mindset you will never have the opportunity or a chance to become successful because your mind has already shut down your success"
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Wealthy individuals convert active income (from jobs/businesses) into passive income by investing it, so that their money works for them.
"Active money is the money that you earn from going to your job or from running your business... Passive money is the money that you do not have to work to earn... what wealthy people do is they work hard here they work hard to generate this active money and anytime they generate this active money from their job or their business or whatever they want to take as much of this active money and put it here that way they have more money working to earn that money passively"
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The speaker invested in real estate during the 2008 crash when prices were significantly discounted (90-93% off, under $10,000).
"When I started buying real estate I was buying at the bottom of the 2008 real estate crash... real estate was selling for 90 sometimes even 93% off meaning you could find a home for sale for under $10,000"
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Properties that were bought for $35,000-$50,000 during a specific period are now valued at $200,000-$400,000.
"Those same homes that were selling for 35 Grand to 50 Grand are now worth two to three maybe $400,000"
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A 'rule of five' suggests that if you can't afford to buy five units of an item, you cannot truly afford one unit.
"if you cannot buy five of them you cannot afford one of them"
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An asset is defined as something that generates income, while a liability is something that incurs expenses.
"an asset is something that puts money into your pocket and a liability is something that takes money away from your pocket"
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Prioritize purchasing rental properties for income generation before buying a primary residence, as the latter is for personal use, not profit.
"if you're serious about becoming wealthy before you go out and buy a home to live in go out and buy a rental property because when you buy a rental property you're going to buy for one sole purpose to make money"
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A specific condo investment is generating $250-$350 per month in passive cash flow.
"this condo is paying me somewhere between $250 and $350 a month in profit each and every month and this is cash flow that I was getting without having to do anything"
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By investing $500 monthly instead of paying for a car, one could accumulate over $3.5 million in 50 years at an 8% return.
"if you took that $500 a month and I set given it to your car company and you paid yourself so you use this $500 and you use this money to invest... after 50 years your $500 monthly investment that you were given to your car company is going to be worth more than $3.5 million in your bank account"
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Holding cash in savings accounts is detrimental due to low interest rates and rising inflation, causing its purchasing power to decrease.
"the dollars that you keep in your bank account which are not growing because if you go to your banker and you ask them what interest rate they're paying you on your savings it's going to be next to nothing so your cash is sitting there flat it's sitting there dead while the price of everything else keeps going up"
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Cash should be saved for emergencies (3-12 months of expenses), big purchases, and investments, but not for other purposes.
"you want to have somewhere between 3 to 12 months worth of expenses sitting there... second you want to save cash for a big purchase... third the last reason why you should be saving cash is to buy an investment if it doesn't fall into one of these three things you should not be saving cash"
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The wealth-building journey involves three phases: saving, growing money (income and investments), and learning to spend wisely.
"the first thing that everybody goes through is you go through the saving phase... the second thing and very few people come to hear is you need to know how to grow your money... then you have to know how to spend your money"
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A suggested financial system allocates 75% to spending, 15% to investing, and 10% to saving from all income earned.
"75 cents is the maximum that you can spend 15 cents is the minimum that you invest and 10 cents is the minimum that you save"
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The speaker prioritizes cash flow investments because they provide income without requiring the sale of assets.
"the majority of my investments are cash flow Investments meaning the majority of my investments not all of them but the majority of them are paying me with some sort of cash flow because I like cash flow and the reason why I like cash flow is because when I have cash flow I can get paid without having to sell my assets"
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Financing items that do not generate income, such as cars, is discouraged because it involves paying interest on depreciating assets.
"if this thing does not put money in your pocket you should not be financing it period... financing cars means you're paying interest to drive around in a car that's losing value"
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A personal rule for affordability states that one should only purchase an item if they have enough cash to buy five of them.
"if you cannot buy five of them you cannot afford one of them"
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Starting a business is identified as the most significant wealth-building strategy in America.
"the number one way that has built more wealth than anything else is by going out and starting a business"
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As wealth increases, individuals become targets for others seeking to claim some of that wealth, necessitating asset protection.
"as people realize that you have money they're going to try to take their hands put it in your pockets and take some of that for themselves as well"
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Owning assets through an LLC (Limited Liability Company) can protect personal assets from business-related lawsuits, as only the LLC's assets are at risk.
"this property is owned by an entity let's just call it just Breit Sing LLC just Singh doesn't own any real estate just Singh LLC does now just Singh owns just Singh LLC but just Singh LLC owns this property... if the only thing that this LLC owns is this property and it's worth $200,000 you declare bankruptcy the tenant gets the property so the max they're entitled to is whatever is in this LLC they cannot come after my personal assets"
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To become wealthy, one must shift from a negative view of wealth and wealthy people to one of curiosity, asking how wealth is achieved and how to replicate it.
"if you want to now actually become wealthy you can't have such a negative attitude towards wealthy people and Wealthy things you have to start asking the question of how did they become wealthy and how can I become wealthy"
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The speaker suggests that one should not worry about discretionary spending (like Netflix or a particular car) until they have achieved certain financial foundations, implying these are not priorities when financially struggling.
"until you do this until you have these two things you should not be worried about spending money you should not be worried about what car you drive and you should not be worried about having a Netflix subscription as well"
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