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ladies and gentlemen damasik Caballeros
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if you give me 10 to 15 minutes of your
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time today I can show you how to manage
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your money so you will never go broke
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again if you can pause what you're doing
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out of your busy schedule and just give
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me your attention I can show you how to
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manage your money so you will never have
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to worry about your car breaking down
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paying bills on time or losing your job
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and I'm not even going to ask you
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anything in exchange just that one penny
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for watching those five second ads in
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this video deal maybe even watch it two
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times and pay me two pennies but anyways
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in this video I want to share a
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five-step plan in order to break away
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from the paycheck to paycheck life a
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plan where you can take control over
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your finances and don't have to worry
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constantly about money and this is not a
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get rich quick side hustle video where I
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tell you to befriend an old person
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online now this is actually a practical
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video where you can apply everything I
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say in your life and over time if you
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manage your money this way you will
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never have to worry about going broke
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again so here is my five-step plan to
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managing your money so you will never go
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broke again
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step one understand exactly why people
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are living paycheck to paycheck
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I want to start this video off just by
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saying that money isn't random it isn't
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evil it's not out to get you money is
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just basic math and I am sure that you
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understand basic math so I just want to
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start by getting you to understand
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exactly why people are living paycheck
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to paycheck because it's so simple now
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99 of people in this world will trade
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their knowledge skills in labor at a job
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in exchange for a paycheck then they use
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that paycheck for the first round of
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spending on big payments like bills rent
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and groceries and after that there's a
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much smaller amount of money left over
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that smaller amount of money goes
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through a second round of spending on
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extra things like Amazon eating out in
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ice cream and after all that spending
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there is no money left over so they have
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to do it over again work make money
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first round of spending smaller amount
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of money second round of spending no
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money
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over and over most people live their
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lives this way most people don't
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understand that this is not a
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sustainable way to live because for
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example what happens if you lose your
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job well money stops coming in and the
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entire thing collapses
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and even if you have a 10-year job where
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you think you never have to worry about
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losing your job it's just a vicious
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circle where things never get easier and
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there's no light at the end of the
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tunnel you can't live your life this way
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this is just existing it is not living
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you need to get out of this way of
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thinking and develop a more sustainable
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plan so now I want to talk about exactly
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how to develop that plan and let's start
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with the basics
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step two adopt a Frugal mindset
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one thing that I preach over and over
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again in my channel is that being Frugal
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is not about pinching pennies and
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depriving yourself but frugality is
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managing your money in a way where
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you're not depriving yourself nor
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wasting anything
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most people could save so much money and
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create a much more sustainable lifestyle
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if they just adopted Frugal habits and
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cut their wasteful spending so let's go
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back to the Chart I just showed you and
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adopt some Frugal habits and see how it
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changes the flow
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so just like before they work make money
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but now they've adopted more frugal
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mindset and they choose to move to a
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smaller house where they don't have a
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bunch of extra space they get a cheaper
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car with a smaller payment and they take
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steps to lower some of their bills well
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because they did that they now have more
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money left over in the second round so
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they use their superhuman Frugal habits
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and cut out wasteful spending on the
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smaller expenses like stop eating out so
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much cut down their Amazon shopping and
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only get ice cream three times a week
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and in the end they have some money left
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over
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you see how much of an impact the tiny
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decision of being Frugal and cutting
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wasteful spending made on the flow
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because they were making intentional
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decisions to lower their expenses at the
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end of the cycle they even had a little
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bit of money left over before the next
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paycheck in this step alone isn't gonna
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change your life but it's a good place
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to start it's the first step in getting
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out of the paycheck to paycheck life so
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now that we talked about this basic
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thing let's go in a little bit more
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detail and move on to the third step
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step three begin establishing the
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emergency fund
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all right although you adopted some
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Frugal habits that made you in a better
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financial position you can't just depend
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on frugality in order to have a healthy
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relationship with money you have to
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develop a plan where you're not one
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paycheck away from catastrophic disaster
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like 58 of Americans are
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so let's go back to the chart and I'm
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going to show you exactly how to do this
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now just like before you work make money
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but this time before you start the first
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round of spending take a small amount of
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money out whatever you can afford and
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put it in a savings account this is
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called paying yourself first and we're
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going to put it towards the emergency
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fund
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and you need to do this to set aside a
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specific amount of money every single
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paycheck for this emergency fund because
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what happens if your car breaks down or
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you lose your job you're gonna need some
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money and Santa Claus he ain't coming to
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town so you put the money in the
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emergency fund and you never use it
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unless there's emergency got it all
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right back to the chart
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you work make money pay yourself first
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then do the rest and over time slowly if
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you are consistent this will grow and
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ideally the rule of thumb is this should
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be 6 to 12 months of living expenses in
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case you lose your job or something
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expensive comes up you have the money
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ready
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and because you did this simple thing
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imagine if you suddenly lose your job
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well because you have this emergency
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fund you can just take money out of that
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in the meantime to pay your bills until
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you get a new job and so at this point
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you're no longer 100 reliant on a
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paycheck you have this emergency fund to
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use in case something goes bad and so
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you're slowly breaking out of this
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paycheck to paycheck life and developing
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a more sustainable way to live you're no
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Elon Musk but you're getting there so
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now let's keep moving and move on to the
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fourth step
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step four begin getting your money to
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work for you
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now once you reach enough money in your
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emergency fund to cover 6 to 12 months
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of living expenses
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congratulations you don't need to add
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any more money into that because of a
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little thing called inflation
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and you probably have heard of this
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before but for some reason over time the
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price of a Big Mac just keeps going up
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there ain't no dollar menu anymore and I
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don't know why this is maybe greed maybe
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selfishness maybe corporate welfare I am
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no Economist but this thing just happens
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over time but once you finish your
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emergency fund you start to get your
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money to work for you you get your money
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to make you more money and you do that
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by opening a brokerage account and
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investing in something called index
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funds and I made a step-by-step video up
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here of how to do that but let's go back
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to the charm and let me show you exactly
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how this works you work you make money
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and since your emergency fund is
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complete you stop putting money in it
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instead you begin putting the money into
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an investment account into the stock
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market then over time that money will
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make more money
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but the thing about making money from
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this is that when you make money you
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don't spend it you just let it keep
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growing and keep making you money
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without you doing anything and this is
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called passive income
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it's money that you're making without
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doing any work and if you look at the
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chart all you have to do is put the
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money in the stock market then over time
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it'll make you more money and then that
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money goes back into the stock market
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and over time it will make more money
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and so on and you can go on YouTube and
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see all these people promising you that
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you can make fifty thousand dollars a
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month in passive income by doing these
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things but in my opinion index investing
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or investing in the stock market is one
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of the only true forms of passive income
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the other source is you're going to have
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to work for like 10 years and then it'll
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eventually become passive income so
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let's go back to this chart and watch
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the flow of this
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so like always you work you make money
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emerging funds complete you invest and
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then continue on the rest work make
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money invest
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over and over in index investing or
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investing in the stock market is not
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going to make you rich but it is going
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to grow your money and help you fight
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inflation rather than just putting it in
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a savings account and so if you look at
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the flow of this it's a much more
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sustainable plan because if you lose
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your job you now have the emergency fund
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to depend on and you have these
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Investments
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it's becoming much more sustainable you
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don't have to worry about this vicious
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circle of living paycheck to paycheck
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and what's going to happen if you lose
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your job and you no longer have a
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paycheck so now that you're becoming
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more financially secure let's get a
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little bit creative and move on to the
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final step
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five get creative and continue expanding
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when you become less dependent on a
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paycheck by establishing an emergency
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fund and investing in the stock market
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options start to open up because you're
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not as desperate anymore sure you still
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need money but you're always going to
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need money and I think that you're
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always going to want to work too it's
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more about doing work that you don't
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despise
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and so at this point in our journey you
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can be a little bit more creative you
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can figure out new ways to generate
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income on your own terms so let's look
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at the chart and see how this works an
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extremely basic way is maybe a side
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hustle like being an Uber driver to
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bring income outside of your normal job
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or you can consider starting a business
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for example I make money from this
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YouTube channel which I use as income
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and in this day and age they are an
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infinite amount of possibilities to make
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money you don't need a small loan of a
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million dollars from Daddy anymore you
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just need to think outside the box
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you have to be creative and figured out
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on your own and I don't claim to be the
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successful millionaire that has it all
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figured out but I'm learning a lot about
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this right now it is very hard to figure
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out ways to make money outside of a
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paycheck there's no instruction manual
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but as tough as it is it is very cool to
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make money without depending on a
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paycheck and so that is the system of
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how to manage your money without ever
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running out most people's financial
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situation looks like this a vicious
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circle of make money spend money and
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need to make more money
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but a more sustainable plan looks like
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this adopt Frugal habits to lower your
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expenses create your emergency fund
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start investing to grow your money and
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start generating other forms of income
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and so the system isn't dependent on one
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single source of income you could afford
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to go without a paycheck every now and
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then because you have these other
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sources backing you up and I could lie
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and tell you that I know how to make
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fifty thousand dollars in passive income
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and you could do it too but that doesn't
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help out anybody this actually works
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it's slow it's boring but if you take
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steps in your life today to develop a
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more sustainable plan and get out of
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this paycheck to paycheck Vicious Circle
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you will never have to worry about going
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broke again and with that muchas gracias
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video 109 Noble Chico
