Sooner and using credit systems listed above can come at a higher risk. Ramsey plan outlines a method that minimize risk therefore takes longer but if you used as suggested can create wealth.
Thank you. I’m on Dave Ramsey. I’m at level 3 stage 2. I love how you laid it all out. I’m 67 years old. I will not regret the past nor wish to shut the door on it, however, I do wish I’d found Dave Ramsey & you about 15 years ago, better yet when Dave started teaching this stuff 30 years ago. Again, thank you Daniel.
Wow, I commend you for your positivity; looking forward is the way to go and keep learning. At your age, I hope people that are in their 30s, 40s, will be motivated. When there is life, health, believe with determination nothing is impossible. Keep winning sir.
I love the step-by-step example using realistic numbers because anyone watching this could, in theory, take these steps and make a plan using their own numbers. This goes beyond just covering the concepts and actually showing people how they can implement them. This is what makes this a great video!
The recipe is relatively simple: be a conscious consumer, don't buy a gigantic expensive house, don't buy expensive cars. I might not get early retirement, but u also won't get cash strapped
The hypothetical does not take into account federal and state income taxes. $83,200/12 = $6,933 of gross income. Monthly expenses of $4,000 ($48,000/12) leaves you with $2,933. Minus monthly debt of $1,272 leave you with the $1,661 per the example. However, if you grab that $6,933 and you reduce it by 7.65% and withholding of about 20%, you are looking at about a take home of $5,025. When you take into account the monthly expenses of $4,000 and the debt payments of $1,272, you can see the numbers don’t add up. Obviously, the monthly expenses can be tweaked but at the rate of housing, food and insurance costs these days, $83,200 household income in this example is not enough to eek out a financial plan.
The first half of my career was on autopilot. I remember overhearing people talking clearly living comfortably on much less than me. I finally realized that I should actively put all of my extra money paying off debt. Before I knew it, that $1272 of monthly debt became monthly investment. I can’t speak for your personal situation but the key is being intentional. It’s possible to do it with 83k - maybe even less. If you don’t make that then focusing on salary increases may be needed. You can, of course complain and say it’s not possible. If so it probably will be because you are not willing to make the changes required to be successful at it.
Whatever you do, don't retire early until you've finalized your marriage and child-bearing plans. A single person can live a simple life on $1M x 4% - taxes = $30k/year. A family of 4 will be poor.
4% of a million minus taxes is more like $34,400. You don't pay social security or medicare taxes from retirement accounts. Also if you're in a state with no state tax add another $1500-2000. So $36500-37,000. If your house is fully paid off and assuming average rent in your area is around $1,000 a month then your family's take home pay is equivalent to about $50,000 which is the take home pay of a family who is still paying a mortgage. Also there's no need for you to be putting money into a 401k anymore while the other family sets aside at least 10% of income each year for retirement.
Im 32 and Im @ level 5.5 (able to afford plenty of digital entertainment) lol. Quit a job that I didn't enjoy, took a 5 month vacation and recently accepted a position @ 30% less than I was at but will be more fulfilling. This was made possible by keeping major expenses and debt as low as possible, saving AND investing at least 1/3 of income for over ten years. Being frugal is really a hip thing and is actually a marketable skill. KEEP SAVING PEOPLE!!
Nice. Saving 1/3 of ones income is sadly a dream for most. I would advocate 1/5 today, but even that can be quite taxing, some may only be able to do 10%, or less even. Its like... 40% of Americans could not even afford a 400$ emergency on their own. Its just sad....
Well done! Thank you for acknowledging that simply saving a pile of money then "living comfortably" through 4% annual withdrawals isn't the ultimate retirement end game for some. There's so many levels beyond that.
It's painful to see how people are complaining instead of taking these awesome advices and running numbers based on their current and future numbers/situation.
this example is similar to my wife and I... early 40's/late 30's... no kids... make a combined $85k a year... only debt is $25k on our house and $10k on the car... monthly cost of living expenses are $3k... take home pay is $5k... currently working on paying off debt and getting our emergency fund back up to $9k (we let it drop to $8k this past year)... hoping to get the car paid off this year (2 years early) then we can throw that money towards our house (originally set to be paid off in 2027)
Start funding your 401K and IRAs. This is the most important funding because it has time to grow (compounding) and to plan on retirement because it will sneak up on you before you know it.
@@ralphemerson497 I've been working on my 401k since I started working in 2002. mine hasn't done great and I don't get a match, I've got slightly over $101k in it right now. My wife didn't have a job with a 401k until the past 5 years and she's just finally making past min. wage. At least her company provides a 50% match with a maximum match of 4% for 8% contribution. last year we made a combined $96k before taxes, but she got a raise this year plus bonus incentives. only owe $9800 on the house now, cars are paid off, but I did buy a boat that I owe $3400 on right now. I'm not too worried about retirement, as long as I have a boat on the lake and get to live where I do now I'm happy, I don't like to travel or move to other places.
@@drunclecookie216 The best thing about America is anyone can do what they want. If a $3,400 balance on a new boat make you happy, God Bless You. Don’t worry that the $3,400 put into a ETF index fund will return roughly $20,000 in ten years. But if the boat makes you happy and there’s no concern for retirement savings, go get ‘em.
@@ralphemerson497 the boat was actually $10k, I bought it last July on a 4 year loan. The $3400 is all I have left on it with the intent to pay it off this summer.
He skipped a lot of steps in how it could be possible, but you're correct that they would need to pay off the "car loan" to transfer title. Personal loans, refinancing mortgage, etc. All options, but not covered.
You transfer the debt from a secured loan to an unsecured loan, usually in the form of a consolidation. Then sell the car and pay off a chuck of that debt. Very simply done through your bank or lender.
Whatever you do, don't retire early until you've finalized your marriage and child-bearing plans. A single person can live a simple life on $1M x 4% - taxes = $30k/year. A family of 4 will be poor.
"Being intentional with their finances". That's probably the golden line in the video. Once you understand opportunity cost and the power of compounding, you'll think twice about going for that expensive (spontaneous) vacation. And I concur, the more I earn, the more frugal I get.
An expensive holiday is the only thing I would over pay for. Life is about experiencing things with the people you love. Everything else is just a thing that you don’t need.
The working overtime works well in youth (usually) because you have more energy, better health and fewer time constraints. Though this plan works when you are older, it works best at ages 18-24.
Kind of defeats the purpose of schooling to teach this. The objective is dependency, being dependent upon a job or government. The last thing school wants is independent people who have freedom to make choices. Now of course there may be some rogue teachers out there that implement standard teachings with practical information, but don't count on it
but if every1 were told to do like above video and doing it.... I'm pretty sure the above video advise will be SHIT advise as the economy will be different... guess we will never know as it will never happen
No problem! I hope the video helps give you an idea of where you are (if not there are some links in the description to other peoples' stages that may give you some other ideas!), and congratulations on continuing to save consistently even though you were sure where you were. That's not always easy to do if you can't clearly see the end point in my experience 😉
I'm 30 years old starting a business part time, two kids, and a hubby at collage. We are at level 1. But with only $10 000 in debts I hope we working towaerds level 4 in just one year after my husband finish school. (We live in Sweden and only pay about 1% on student loans, so I consider us debt free even though we still have student loans.)
23yr old engineer earning about 75k/yr (hoping to hit six figures within the next few years). Contracting for now so no 401k. My expenses are about 30k/yr. Currently I have about 3 1/2 months worth of savings and I'm building up to a 6mo savings. I'm saving about $650/mo for that emergency fund and I also have an IRA that I'm thinking about converting to a Roth IRA. That IRA was my previous employer's 401k that got converted and it has about $2600 in it. I also just started putting in $525/mo. I've got an auto loan on a 4yr old car that has a balance of $2200 on it yet. I have $14,000 in student loans and a mortgage on a condo with a $69,000 balance. I think I'd consider "debt free" to be no debt besides a mortgage because the vast majority of people always have a mortgage. I've technically hit level 2 already but I'm going for 6 months so I won't really have that until the end of this year. Then I'll kill my student loans and hit level 3! It's kind of fun actually. Unless you don't consider yourself debt free if you have a mortgage. I don't know I mean you can always sell your house and be debt free immediately so I don't think that's the same thing. People who rent aren't really debt free then, they owe hundreds or thousands every month and always will. Same with a mortgage.
Jordan Golde congratulations :-) you are lucky to have such a salary at your age. when I was your age I earned so much less. I'm now earning slighter above that. many people earn so little that retiring goes very slow even if everything is saved
You are doing great to have that kind of income for your age. Invest wisely and dont blow money on stupid stuff just to make people think you are rich. Invest your money wisely so that when the time comes you decide to have a family, you are well prepared
Amazing. Love this channel. Am 21, just starting out. I have a feeling this video (and others from this channel) will be gold for me in my journey to be more financially educated. Cheers!
I totally agree. Embarrassingly I was a certified financial advisor for a short season and this concept was not even taught to me then. I stumbled across it much later, but now I'm on a mission to share the message (and strategies) with others as well. Wishing you all the best on your wealth-building journey.
Haha, smart baby, you have there Ranza! Yes, to you building towards financial independence for you and your loved ones. Wishing thee the absolute best on your wealth-buidling journey.
Your mileage may vary, but I think setting out timetables for these stages based on 10% compound growth is somewhere between ambitious and deceitful. Most prudent plans set out 6-8% growth. If you achieve faster growth - fantastic, but build a realistic plan first.
By turning my career into a business, using my own time and hiring off-coast labor force and selling to emerged markets, I am at saving rate 90-95% for past 2 years, need 4 years more for 1st million $ and 8 years to financial independence. I am 31. Hope that will encourage you to start a small business too. And off coarse I won't stop working, will just choose the most interesting higher paying projects.
My husband and I are currently on level 5....but I'm torn between "coasting" for the rest of my life and working towards level 8 or even 9. We worked so hard for so long I'm not sure I have much left in me and I'm only 33....lol. Early retirement does come at great sacrifice,which why I'm coasting right now and need a break.
I’m 24 and currently at level 5.... only because I work in high income country and able to retire in my hometown in Bali...my goal is to work for a little bit longer so I don’t need to “retire” at a survival mode
I've been financially independent since 45 and got so bored with having nothing to do so I started another business. now at 60 I think I'm about ready to do anything but work. I've been working since the age of 14. I think it's enough work for one life. the one thing about this video that really stuck with me is how my desire for material things declined. just don't see the value in those anymore. also the biggest key which this video points out is keeping your expenses to a minimum. it's almost exponential how your money will grow.
I am 30 years indonesian male. I've watch a lot of similar videos. Now I'm gonna simplified my understanding. 1) Being more minimalist less consumerism overtime. This is in my blood so I don't have to even effort a little 2) Build my own business. I Have few employees, but still too attached to the business. Working on it. Keep open to new ideas, I might make a side hustle as youtuber :D 3) Invest good, primarily on rentable real estate. Let see how it works in the next 5 years
already living the dream! the trick is build passive streams + businesses that run without you. The faster you leave the typical 9-5 the faster you'll find a way haha
After Dave Ramsey I am now debt free. So I bought a minor fire damaged house for 19K I am remodeling to rent out as 4 - 1 bedroom suites and its has a guest room in the garage I will live in. This passive income will be my retirement plan as I am already old enough to retire, would you comment on this idea?
@@trance1986 nice man.... That's inspiritational, how old are you and at what age did u start if u don't mind me asking, I just turned 23 and furiously researching into this but I seem to be seeing so much information that's contradictory.. Idk what to do lol
So this problem has just 3 parts to it: the amount you are investing per month, where you are investing it and how much time you have before you want to retire. It's helpful to think of milestones in terms of how much per month is being invested: 50/month, 100/month, 500/month, 1000/month etc. In trying to hit these milestones, we need to earn more and spend less in addition to clearing debt. People don't realize that even 500/month invested starts the clock, this is way more than even 50/month and infinitely more than zero in terms of how it feels. Hopefully my friends at 50/month have that pleasant surprise of forgetting about it for a few years, then you open the statement and see 3 zeroes in there. Now we want more, that was exciting and motivating to join the 1 comma club.
Overtime, 5 hrs/week x2 *52/12* $20.00/hr * 1.5 * .75 = $962/mth . 0 .75 is the net pay after marginal tax rate is applied (Fed, 12%, State 5% ( alabama), 7.2% SS and Medicare). BasePay Alabama, $83480 - $6000 for SS/Medicare - $6757 for Fed tax and $3674 for Al state Tax leaves $67049 or $5587/mth minus $4000/mth living expenses or about $1600/month.
You left out any consideration for paycheck withholding. Taking into account health insurance, federal and state tax, medicare, and social security, your hypothetical couple's monthly take home pay will be closer to $5,500. If you subtract their monthly expenses of $4,000 and their monthly debt service of $1,273 from their actual take home pay, the surplus is $227. They are still solvent but it will take much longer to build an emergency fund and snowball their debt than your scenario outlines.
This is what I was thinking while watching as well. Taxes is at least 30% depending on where you live, and health care would be an extra expense as well.
I also don't understand how they can sell their cars for 15k each, and not use that to pay off the loans they had on the car. Unless they got a new loan, there should be a lean on the cars so they couldn't sell the car until paid off, unless they were transferring the debt, in which case they wouldn't get the entire 15k.
@@pked5688 Exactly. A note on a car is considered a secured loan meaning that the car, as collateral, is securing the debt and ensuring you pay the note. Otherwise your car gets repossessed. If you sell the car privately, the bank will call the note and the entire principle will be due. You can't sell a car and then keep paying down the debt.
@@JohnDoe-fg9ng Total taxes about 16500 in Alabama. About 25% (Marginal Rate) ( 7.2% SS and Medicare, 12% Fed, 5% State) in Aabama so they would only get to keep about 75%. My familys expenses run about 48K/year includes health insurance and everything.
Wynn Locher Yeah they never paid taxes. They either ended up in Federal Prison or are living paycheck to paycheck and never got to level 2. Dumb oversimplistic video. If everyone can save $3,000 a month after expenses, they are already on their way to financial freedom and don't need a dumb 22 min flawed video to explain to them how.
@Janelle Cliffs I had similar experience at first but I got to know better when I contacted an expert trader, he has helped me in making huge profits trading with him.
Essentially financial independence is elementary, all you need to do is keep monthly expenses very low, then make money, save money then invest that money. Once you make more than spend every month, you are now financially free. Hopefully, this simplified the whole process. Thank you, love your video by the way.
So I am between 7 and 8 but should reach 8 by mid 2020 I quit my job in 2018, my income were good enough to never work again but not good enough to just move with full confidence even though where I live it is quite expensive... now in a few months I will reach financial abundance because I refused to move and focused on increasing my income... "retiring" at 35 feels good
He mentions that they picked majors with good job prospects. Any engineer, scientist, etc. should have no problem clearing 40k per year ($20/hr) and will typically earn close to double that within a couple of years (80k/year or $40/hr). This makes a degree in these fields a solid investment. If you go to college for anything other than that you are wasting your money unfortunately, the current system is a scam and cost of a college degree is NOT correlating to ROI for most majors. There are of course some higher paying jobs in non STEM fields but they are far from abundant :(.
@@LyraTyrell that's how I honestly feel. Every time I read about someone online who retired early. They're usually an engineer or whatever. I'm currently 26 averaging 40k-50k a year without college, but I wanna make more without having to grind overtime at a dead end job that I'm sure will replace be when robots take over. I'm in sort of a dilemma of what to back to school for at 70k+ a year that would be easy to achieve within 1-2 years of schooling and minimal debt while balancing full time work. I don't feel like I'm smart enough or capable of doing so by barely graduating high school may have to take some high school refresher courses which would delay my desired time. I'm kind of getting anxiety & depressed, because it's like "this is it" and I feel like such a failure in my eyes.
I passed my financial independence number in 2020. Based on my calculations, I will hit my financial freedom number in 2022. My goal is to retire somewhere between financial freedom and financial abundance. I'll be roughly 52 years old by then. Looking forward to an early retirement! 😃
Study from age 5-21; work for others, extreme save & invest, raise a family from 21-45; semi-retire, travel, & do whatever you want from 45-75; fully retire from 75-90+. Don't work until you're 62 or 65 to retire because in most cases you won't have the energy or health to travel or do anything after 70 or 75. Retire earlier and enjoy life more! Why work all your life and then die?
@@freedomlife3623Yes, health is #1. By getting out of the rat race (working like hell) one will naturally have time for health. The sooner one stops working full time the better. Live simply, lower costs, and enjoy life! Better yet, pass down assets like home to children so they don't even have to save up for housing. It's already paid off.
I don't think any of these "financial experts" understand cars. If you have have car loans, your cars are likely only worth about what the loan values are, at best. Meaning, if you sell the cars... you have $0... or you likely owe some money. And since they don't yet have an emergency fund... they don't have cash to go buy a nice used car.
I was wondering about selling the cars but not paying the loan in full. Won't you have to get a personal loan to get the lien off the car so you can sell it? I have never had a car loan but I would assume the bank won't let you sell their asset without fully paying the loan
Well someone ran a red light and my lawyer got the difference for my Corvette!! I feel like shaking the guys hand cause I didnt get hurt and got rid of lots of debt.
Thank god I wasn't the only one thinking this. I always hear the "sell your car and get a cheaper one" advice. Most likely you will lose money. In reality if your original car purchase is something you can manage you're likely better off sucking it up and paying it off. In the long run you will have a car that can last a couple years longer then had you bought a cheap used car. This situation isn't ideal but if you've already made a bad car purchase (and had the car for a while) then this is often the best course of action.
The financial experts understand depreciation and interest. A $20,000 car depreciating at 10% per year loses $2,000 in the first year, while a $4,000 car loses $400. Similar for a car loan, $20,000 at 14% interest costs $2,800, while a $4,000 loan at 14% costs $560 per year. Sell the new car for $20,000, buy an old car for $4,000, and put the remaining $16,000 into the car loan. Your current net worth remains unchanged, but your costs reduces from ($2,000 depreciation + $2,800 interest) = $4,800, down to ($400 depreciation + $560 interest) = $960 in the first year.
I'm at level 2 but until end of the year i don't t have any suprized purchases or any debt. And I change my home with another lower rent place. So while when I'm cutting my purchases I add them to my savings and it will make me go to my goal much more easier for now (if you are putting your goals for now to 3.000€ in my account until end of te year obviously 🙂 ). But it's just a short time plan 🙃
You forgot that when Jane divorces John, John will lose his house and 75% of the joint savings. Also he will have a negative monthly cash flow of alimony + child support that can be close to $3000 / mo.
Thank you, this really helps! As a student who's trying to learn as much as I can about finances as I can, this really gives a clearer picture on what goals I should aim for next. Currently tackling level 2, so it's a long way to go, but we'll get there!
This was a great video and I thought it was really insightful! However, there are a couple things that I thought were missing. That is, interest accrued on loans and taxes on income.
I am 32 years old and have only 5000€ of debt. I could ditch this one relatively quickly, but the problem is that I have several required emergency spendings (That I will not go into right now) that cannot be postponed, which will force me to delay any financial independence plan even further. The reason of my late entering of "early retirement scene" is because only in my late 20's I reached financial solvency. How would you suggest I proceed?
BigBadBeef I understand exactly where you're coming from. That's why I came out with this video to help others just like I was helped with steps on managing my money: ua-cam.com/video/ZuJ23STX0eo/v-deo.html Please share this video with others that need to get out of a financial bind.
The 10 Levels of FI
Level 0 - 2:25 Financial Dependency
Level 1 - 2:57 Financial Solvency
Level 2 - 3:06 Financial Stability
Level 3 - 3:13 Debt Freedom
Level 4 - 3:36 Coasting Financial Independence
Level 5 - 5:05 Financial Security
Level 6 - 6:02 Financial Flexibility
Level 7 - 6:51 Financial Independence
Level 8 - 7:31 Financial Freedom
Level 9 - 7:58 Financial Abundance
BJL Tv perfect. Thank you!
thankss
awesome thank you
Thank you
Thank you 🙏🏽
I'm on the Dave Ramsey plan currently. So far payed off all 44K of credit card debt in 2 years. Level 8 is what I've been shooting for.
That's awesome Brent! Must feel good to have that much debt paid off, keep it up 👍
Brent 44k in 2 years? Dude you are KILLING it. No joke this takes dedication and focus. Keep going!!
Sooner and using credit systems listed above can come at a higher risk. Ramsey plan outlines a method that minimize risk therefore takes longer but if you used as suggested can create wealth.
Right on!
I'm following that plan too but I call a mortgage debt too and I'm attacking it in baby step 2. Only 119k to go...
Set the Speed X1.5.
Save you the most important asset you have. (TIME)
Great tip!! I was just noticing that he talked kind of slow. And scrolled to the comment section haha
Hah, I run every youtube video at 2x :)
Holy shit, I peed...
I watch every non fiction video and listen to non fiction audiobook/ podcast at 1.5x minimum. It’s awesome and all that time saved adds up.
I took your advice before I started the video, I dont want to put it at normal speed now because 1.5 seems like an average speed lol
Nice insightful video. I am at level 5-trying to get to level 9!
You can do it!
Thank you. I’m on Dave Ramsey. I’m at level 3 stage 2. I love how you laid it all out. I’m 67 years old. I will not regret the past nor wish to shut the door on it, however, I do wish I’d found Dave Ramsey & you about 15 years ago, better yet when Dave started teaching this stuff 30 years ago. Again, thank you Daniel.
Wow, I commend you for your positivity; looking forward is the way to go and keep learning. At your age, I hope people that are in their 30s, 40s, will be motivated. When there is life, health, believe with determination nothing is impossible.
Keep winning sir.
I love the step-by-step example using realistic numbers because anyone watching this could, in theory, take these steps and make a plan using their own numbers. This goes beyond just covering the concepts and actually showing people how they can implement them. This is what makes this a great video!
The recipe is relatively simple: be a conscious consumer, don't buy a gigantic expensive house, don't buy expensive cars. I might not get early retirement, but u also won't get cash strapped
Level 5's represent! We climbing!
The hypothetical does not take into account federal and state income taxes. $83,200/12 = $6,933 of gross income. Monthly expenses of $4,000 ($48,000/12) leaves you with $2,933. Minus monthly debt of $1,272 leave you with the $1,661 per the example. However, if you grab that $6,933 and you reduce it by 7.65% and withholding of about 20%, you are looking at about a take home of $5,025. When you take into account the monthly expenses of $4,000 and the debt payments of $1,272, you can see the numbers don’t add up. Obviously, the monthly expenses can be tweaked but at the rate of housing, food and insurance costs these days, $83,200 household income in this example is not enough to eek out a financial plan.
The first half of my career was on autopilot. I remember overhearing people talking clearly living comfortably on much less than me.
I finally realized that I should actively put all of my extra money paying off debt. Before I knew it, that $1272 of monthly debt became monthly investment.
I can’t speak for your personal situation but the key is being intentional. It’s possible to do it with 83k - maybe even less. If you don’t make that then focusing on salary increases may be needed.
You can, of course complain and say it’s not possible. If so it probably will be because you are not willing to make the changes required to be successful at it.
Whatever you do, don't retire early until you've finalized your marriage and child-bearing plans. A single person can live a simple life on $1M x 4% - taxes = $30k/year. A family of 4 will be poor.
SevenRiderAirForce stay single forever
4% of a million minus taxes is more like $34,400. You don't pay social security or medicare taxes from retirement accounts. Also if you're in a state with no state tax add another $1500-2000. So $36500-37,000. If your house is fully paid off and assuming average rent in your area is around $1,000 a month then your family's take home pay is equivalent to about $50,000 which is the take home pay of a family who is still paying a mortgage. Also there's no need for you to be putting money into a 401k anymore while the other family sets aside at least 10% of income each year for retirement.
Thanks for calling this out. Recognize that life changes and goals will change a LOT over 20 years.
I am not having kids so I should be all set.
Dammit I knew it . Getting into a relationship will make me stay poor.
The only video anyone needs to see in their lifetime
Im 32 and Im @ level 5.5 (able to afford plenty of digital entertainment) lol. Quit a job that I didn't enjoy, took a 5 month vacation and recently accepted a position @ 30% less than I was at but will be more fulfilling. This was made possible by keeping major expenses and debt as low as possible, saving AND investing at least 1/3 of income for over ten years. Being frugal is really a hip thing and is actually a marketable skill. KEEP SAVING PEOPLE!!
Nice.
Saving 1/3 of ones income is sadly a dream for most.
I would advocate 1/5 today, but even that can be quite taxing, some may only be able to do 10%, or less even.
Its like... 40% of Americans could not even afford a 400$ emergency on their own.
Its just sad....
Kay that’s cause when they make more money they spend more, whereas they should spend as little as possible
This video changed my life a year ago. It woke me up to everything!
you got woke
Well done! Thank you for acknowledging that simply saving a pile of money then "living comfortably" through 4% annual withdrawals isn't the ultimate retirement end game for some. There's so many levels beyond that.
It's painful to see how people are complaining instead of taking these awesome advices and running numbers based on their current and future numbers/situation.
This shit isn't practical, that's why. How do you sale your car if you have payments on it still? Plus those numbers don't add up.
@@teddypgray Just like anything you do it takes effort n grit n the confidence it can b done. It's definitely possible.
This is a great video, thank you!
You bet!
Woooow I love this... I need to start planning my financial freedom this gives me a guide line !!
Woohoo! Glad to hear it 😃
It’s been a year. How are you doing?
this example is similar to my wife and I... early 40's/late 30's... no kids... make a combined $85k a year... only debt is $25k on our house and $10k on the car... monthly cost of living expenses are $3k... take home pay is $5k... currently working on paying off debt and getting our emergency fund back up to $9k (we let it drop to $8k this past year)... hoping to get the car paid off this year (2 years early) then we can throw that money towards our house (originally set to be paid off in 2027)
Except the difference in 10-20years of compound interest in investments people in there 30's 40's lose for starting late is hard to overcome.
Start funding your 401K and IRAs. This is the most important funding because it has time to grow (compounding) and to plan on retirement because it will sneak up on you before you know it.
@@ralphemerson497 I've been working on my 401k since I started working in 2002. mine hasn't done great and I don't get a match, I've got slightly over $101k in it right now. My wife didn't have a job with a 401k until the past 5 years and she's just finally making past min. wage. At least her company provides a 50% match with a maximum match of 4% for 8% contribution.
last year we made a combined $96k before taxes, but she got a raise this year plus bonus incentives. only owe $9800 on the house now, cars are paid off, but I did buy a boat that I owe $3400 on right now. I'm not too worried about retirement, as long as I have a boat on the lake and get to live where I do now I'm happy, I don't like to travel or move to other places.
@@drunclecookie216 The best thing about America is anyone can do what they want. If a $3,400 balance on a new boat make you happy, God Bless You. Don’t worry that the $3,400 put into a ETF index fund will return roughly $20,000 in ten years. But if the boat makes you happy and there’s no concern for retirement savings, go get ‘em.
@@ralphemerson497 the boat was actually $10k, I bought it last July on a 4 year loan. The $3400 is all I have left on it with the intent to pay it off this summer.
How the hell did they sell their cars and not pay off the full balance?? My banks don't release titles until they're paid off.
Exactly!
He skipped a lot of steps in how it could be possible, but you're correct that they would need to pay off the "car loan" to transfer title. Personal loans, refinancing mortgage, etc. All options, but not covered.
New plan. Finance a Bugatti, sell it for cash, worry about the rest later.
You transfer the debt from a secured loan to an unsecured loan, usually in the form of a consolidation. Then sell the car and pay off a chuck of that debt. Very simply done through your bank or lender.
That couple is living better than 99% of this audience. Myself included.
Yeah, sometimes it's disheartening when the example assumes that your job earns double what minimum wage offers.
Whatever you do, don't retire early until you've finalized your marriage and child-bearing plans. A single person can live a simple life on $1M x 4% - taxes = $30k/year. A family of 4 will be poor.
Thank you for this! I was wondering if I was the only one thinking this...
"Being intentional with their finances". That's probably the golden line in the video. Once you understand opportunity cost and the power of compounding, you'll think twice about going for that expensive (spontaneous) vacation.
And I concur, the more I earn, the more frugal I get.
An expensive holiday is the only thing I would over pay for. Life is about experiencing things with the people you love. Everything else is just a thing that you don’t need.
The working overtime works well in youth (usually) because you have more energy, better health and fewer time constraints. Though this plan works when you are older, it works best at ages 18-24.
this is what should be taught in high school
Most of the teachers that taught at my school were too stupid to understand this
R E C
Hahaha. True.
Kind of defeats the purpose of schooling to teach this. The objective is dependency, being dependent upon a job or government. The last thing school wants is independent people who have freedom to make choices. Now of course there may be some rogue teachers out there that implement standard teachings with practical information, but don't count on it
but if every1 were told to do like above video and doing it.... I'm pretty sure the above video advise will be SHIT advise as the economy will be different... guess we will never know as it will never happen
They just want us to be employed so business builders has a supply of employees
Great video, I feel fully motivated! Do u have a coast calculator you recommend?
This is my absolute favorite video so far!!! Keep it coming. I really enjoy and learn with your content.
Thanks for the support Johanna! I'll do my best to keep them coming as regularly as I can. Hope you continue to enjoy and learn 😉
Thanks for the video, im in the uk and on my Journey, i just find it hard to work out where i am but i just keep saving.
No problem! I hope the video helps give you an idea of where you are (if not there are some links in the description to other peoples' stages that may give you some other ideas!), and congratulations on continuing to save consistently even though you were sure where you were. That's not always easy to do if you can't clearly see the end point in my experience 😉
i came back to watch this one again, very informative!
I'm glad to hear it was good the second time around 😉
I'm 30 years old starting a business part time, two kids, and a hubby at collage. We are at level 1. But with only $10 000 in debts I hope we working towaerds level 4 in just one year after my husband finish school. (We live in Sweden and only pay about 1% on student loans, so I consider us debt free even though we still have student loans.)
Thats amazing
Level 7, 4 years until level 9!, FREEDOM!!!!
Very awesome, I will use this guideline for myself. Very useful, thanks.
You are welcome! Glad it was helpful :)
What?! internet is not included in your list of survival expenses ?!!😮🤨
Have you ever heard of Starbucks or the public library wifi lol.
Please can you explain slowly? I'm sorry because im not professional in english🙏 i feel that your videos are great and valuable. Thank you
Thank you! Your content has truly helped me, you have no idea ♥️
You just made my day. I'm glad to hear it is helping 😁
Probably the most informative video I've ever seen
23yr old engineer earning about 75k/yr (hoping to hit six figures within the next few years). Contracting for now so no 401k. My expenses are about 30k/yr. Currently I have about 3 1/2 months worth of savings and I'm building up to a 6mo savings. I'm saving about $650/mo for that emergency fund and I also have an IRA that I'm thinking about converting to a Roth IRA. That IRA was my previous employer's 401k that got converted and it has about $2600 in it. I also just started putting in $525/mo. I've got an auto loan on a 4yr old car that has a balance of $2200 on it yet. I have $14,000 in student loans and a mortgage on a condo with a $69,000 balance.
I think I'd consider "debt free" to be no debt besides a mortgage because the vast majority of people always have a mortgage. I've technically hit level 2 already but I'm going for 6 months so I won't really have that until the end of this year. Then I'll kill my student loans and hit level 3! It's kind of fun actually. Unless you don't consider yourself debt free if you have a mortgage. I don't know I mean you can always sell your house and be debt free immediately so I don't think that's the same thing. People who rent aren't really debt free then, they owe hundreds or thousands every month and always will. Same with a mortgage.
Jordan Golde
congratulations :-)
you are lucky to have such a salary at your age. when I was your age I earned so much less. I'm now earning slighter above that. many people earn so little that retiring goes very slow even if everything is saved
You are doing great to have that kind of income for your age. Invest wisely and dont blow money on stupid stuff just to make people think you are rich.
Invest your money wisely so that when the time comes you decide to have a family, you are well prepared
Amazing. Love this channel. Am 21, just starting out. I have a feeling this video (and others from this channel) will be gold for me in my journey to be more financially educated. Cheers!
Cheers! And it's awesome to see someone as young as you taking such an interest in your financial future. And welcome to the community 😉!
I wish i knew this, and compounded investing when i was 21 😄
I strongly agree with this method. I'm at Level 3 myself and am working toward 4.
I wish this was taught in high school and they gave us an option to take this class instead of home economics class.
Most likely kids would find this boring.
I totally agree. Embarrassingly I was a certified financial advisor for a short season and this concept was not even taught to me then. I stumbled across it much later, but now I'm on a mission to share the message (and strategies) with others as well. Wishing you all the best on your wealth-building journey.
@@razwanahmed89 I agree, but let's be honest which topic don't kids find boring. :)
Long but very useful, love it!
Thanks!
My 6month old child subscribed to this channel, lifes telling me something 🤔
Haha, smart baby, you have there Ranza! Yes, to you building towards financial independence for you and your loved ones. Wishing thee the absolute best on your wealth-buidling journey.
Your mileage may vary, but I think setting out timetables for these stages based on 10% compound growth is somewhere between ambitious and deceitful. Most prudent plans set out 6-8% growth. If you achieve faster growth - fantastic, but build a realistic plan first.
I agree with you on that
By turning my career into a business, using my own time and hiring off-coast labor force and selling to emerged markets, I am at saving rate 90-95% for past 2 years, need 4 years more for 1st million $ and 8 years to financial independence. I am 31. Hope that will encourage you to start a small business too. And off coarse I won't stop working, will just choose the most interesting higher paying projects.
Thanks for clarifying! It's great to see what those concepts actually mean and will surely help many on their financial journey! 🙌
Glad it was helpful!
So much info presented in the best manner. I really don’t leave comments but this is a really good video.
My husband and I are currently on level 5....but I'm torn between "coasting" for the rest of my life and working towards level 8 or even 9. We worked so hard for so long I'm not sure I have much left in me and I'm only 33....lol. Early retirement does come at great sacrifice,which why I'm coasting right now and need a break.
Heather Evans keep going! You’re still young and have the capability to work. Maybe find a hustle that doesn’t kill you like your current work?
Maybe onlyfans with your hubby? Something like that…
Heather you're 36 now (presumably). You coasting or are you flying? Let me know!
I’m 24 and currently at level 5.... only because I work in high income country and able to retire in my hometown in Bali...my goal is to work for a little bit longer so I don’t need to “retire” at a survival mode
I've been financially independent since 45 and got so bored with having nothing to do so I started another business. now at 60 I think I'm about ready to do anything but work. I've been working since the age of 14. I think it's enough work for one life. the one thing about this video that really stuck with me is how my desire for material things declined. just don't see the value in those anymore. also the biggest key which this video points out is keeping your expenses to a minimum. it's almost exponential how your money will grow.
I am 30 years indonesian male. I've watch a lot of similar videos. Now I'm gonna simplified my understanding.
1) Being more minimalist less consumerism overtime. This is in my blood so I don't have to even effort a little
2) Build my own business. I Have few employees, but still too attached to the business. Working on it. Keep open to new ideas, I might make a side hustle as youtuber :D
3) Invest good, primarily on rentable real estate.
Let see how it works in the next 5 years
4 years to go
Excellent video,but sadly half of USA will not be able to obtain this.
already living the dream! the trick is build passive streams + businesses that run without you. The faster you leave the typical 9-5 the faster you'll find a way haha
What kind of businesses have you built sir? If you don't mind me asking
@@yashgupta5460 lmaoooo
I am a new UA-camr and this video helped out a lot!
Thank you so much for this video. It is really helping me start my journey towards financial independence.
Glad it was helpful!
Great video, thank you
I am between level 5 and 6. Estimating another 5 years or so to reach full FI.
Same! In 5 years, I'll be retired! Only 25 right now! I talk about how I'm doing it on my UA-cam channel!
Aiming for level 8 for me over on my channel, but wouldn't complain about being on level 9!
Financial independence step by step, working one step at a time until financial independence is achieved.
After Dave Ramsey I am now debt free. So I bought a minor fire damaged house for 19K I am remodeling to rent out as 4 - 1 bedroom suites and its has a guest room in the garage I will live in. This passive income will be my retirement plan as I am already old enough to retire, would you comment on this idea?
From having 0 savings and 0 debt just 3 years ago to LVL 5 at this moment... Big goal to be at lvl 7 by 40 and basically retire from 9 to 5 job...
Almost 2 years later and guess what I'm between 6 and 7.. Hard work and sacrifices pays off...
@@trance1986 nice man.... That's inspiritational, how old are you and at what age did u start if u don't mind me asking, I just turned 23 and furiously researching into this but I seem to be seeing so much information that's contradictory.. Idk what to do lol
@@fazalihtisham4421 I'm 34. I started when I was 28.
@@trance1986 what's your job if u don't mind me asking?
@@fazalihtisham4421 I work for the gov
excellent tutorial the truth seemed great to me the explanation and everything
Useful content but FAR too many ads! This would discourage me from viewing other videos from this creator in favour of the others out there.
Thank you so much for being on UA-cam. You have been a great help over the last few months since I found you.
No problem Will, I'm glad to hear I've been able to help 😁
I love this!!! Great breakdown
Thanks, Sarita!
Thank you for sharing information like this.
Sure thing! Glad you got something out of it :)
I like this! My husband and i dream of early retirement (at 55). 4 years to go!!
Thanks for the great video
Awesome, Dana! Sounds like the two of you are nearing the finish line 👍. Do you guys have any plans for what you want to do when you retire?
We want to travel and volunteer.
That's an awesome plan!
We also have investment properties to take care of 😜
55 is early? 😁😃 I'm 46 and already retired!
I am definitely level 2. Working on paying off debt.
You got this!
A powerful step @jhessgirl keep up the good work. Being debt-free is liberating and the foundation to building wealth.
So this problem has just 3 parts to it: the amount you are investing per month, where you are investing it and how much time you have before you want to retire. It's helpful to think of milestones in terms of how much per month is being invested: 50/month, 100/month, 500/month, 1000/month etc. In trying to hit these milestones, we need to earn more and spend less in addition to clearing debt. People don't realize that even 500/month invested starts the clock, this is way more than even 50/month and infinitely more than zero in terms of how it feels. Hopefully my friends at 50/month have that pleasant surprise of forgetting about it for a few years, then you open the statement and see 3 zeroes in there. Now we want more, that was exciting and motivating to join the 1 comma club.
Overtime, 5 hrs/week x2 *52/12* $20.00/hr * 1.5 * .75 = $962/mth . 0 .75 is the net pay after marginal tax rate is applied (Fed, 12%, State 5% ( alabama), 7.2% SS and Medicare).
BasePay Alabama, $83480 - $6000 for SS/Medicare - $6757 for Fed tax and $3674 for Al state Tax leaves $67049 or $5587/mth minus $4000/mth living expenses or about $1600/month.
With 5 hrs overtime will leave about 2500/mth to work on bills and investments.
You left out any consideration for paycheck withholding. Taking into account health insurance, federal and state tax, medicare, and social security, your hypothetical couple's monthly take home pay will be closer to $5,500. If you subtract their monthly expenses of $4,000 and their monthly debt service of $1,273 from their actual take home pay, the surplus is $227. They are still solvent but it will take much longer to build an emergency fund and snowball their debt than your scenario outlines.
This is what I was thinking while watching as well. Taxes is at least 30% depending on where you live, and health care would be an extra expense as well.
I also don't understand how they can sell their cars for 15k each, and not use that to pay off the loans they had on the car. Unless they got a new loan, there should be a lean on the cars so they couldn't sell the car until paid off, unless they were transferring the debt, in which case they wouldn't get the entire 15k.
@@pked5688 Exactly. A note on a car is considered a secured loan meaning that the car, as collateral, is securing the debt and ensuring you pay the note. Otherwise your car gets repossessed. If you sell the car privately, the bank will call the note and the entire principle will be due. You can't sell a car and then keep paying down the debt.
@@JohnDoe-fg9ng Total taxes about 16500 in Alabama. About 25% (Marginal Rate) ( 7.2% SS and Medicare, 12% Fed, 5% State) in Aabama so they would only get to keep about 75%. My familys expenses run about 48K/year includes health insurance and everything.
Wynn Locher Yeah they never paid taxes. They either ended up in Federal Prison or are living paycheck to paycheck and never got to level 2. Dumb oversimplistic video. If everyone can save $3,000 a month after expenses, they are already on their way to financial freedom and don't need a dumb 22 min flawed video to explain to them how.
good breakdown, but i'll just keep it to 3 broad categories rather than 10. thanks for the video!
Good call! The key is finding what works best for you :)
You can only manage your money and get rich when it's at work for you, investing is the best option, getting rich is a process
What kind of investment will you suggest for me wouldn't involve so much risk
Investing with no experience and knowledge is a waste of time and money.
@@gretchen3158 made couple of investment but my investment in forex trading yields huge profits for me weekly.
@Janelle Cliffs I had similar experience at first but I got to know better when I contacted an expert trader, he has helped me in making huge profits trading with him.
@Janelle Cliffs you can contact him directly via, {Stuartwilkinstrader@gmailcom}
You have to save and invest your money 💰
Essentially financial independence is elementary, all you need to do is keep monthly expenses very low, then make money, save money then invest that money. Once you make more than spend every month, you are now financially free. Hopefully, this simplified the whole process. Thank you, love your video by the way.
Often the easiest things are the least likely to be followed!
So I am between 7 and 8 but should reach 8 by mid 2020
I quit my job in 2018, my income were good enough to never work again but not good enough to just move with full confidence even though where I live it is quite expensive... now in a few months I will reach financial abundance because I refused to move and focused on increasing my income... "retiring" at 35 feels good
The couple starts making $20 a hour at 23?
I was a certified senior pharmacy tech at Walgreens at that age and I was making $13.75
He mentions that they picked majors with good job prospects. Any engineer, scientist, etc. should have no problem clearing 40k per year ($20/hr) and will typically earn close to double that within a couple of years (80k/year or $40/hr). This makes a degree in these fields a solid investment.
If you go to college for anything other than that you are wasting your money unfortunately, the current system is a scam and cost of a college degree is NOT correlating to ROI for most majors. There are of course some higher paying jobs in non STEM fields but they are far from abundant :(.
I’m 19 and make $25 an hour. It’s not unrealistic or impossible
@@LyraTyrell that's how I honestly feel. Every time I read about someone online who retired early. They're usually an engineer or whatever. I'm currently 26 averaging 40k-50k a year without college, but I wanna make more without having to grind overtime at a dead end job that I'm sure will replace be when robots take over. I'm in sort of a dilemma of what to back to school for at 70k+ a year that would be easy to achieve within 1-2 years of schooling and minimal debt while balancing full time work. I don't feel like I'm smart enough or capable of doing so by barely graduating high school may have to take some high school refresher courses which would delay my desired time. I'm kind of getting anxiety & depressed, because it's like "this is it" and I feel like such a failure in my eyes.
@@connorkelly690 what do u do?🧐
@@BrianBloop I run a land development business. I manage jobsites, and run heavy equipment
very good presentation - all the math and formulas are correct....
Levels 4+ are what is often called as having “f@ck you” money, and it is really liberating to achieve it.
Best chanel on this topic! Good work!
Glad you think so!
Goal is to retire at 39! We are almost There!
That's awesome to hear! Keep it up 👍
Thank you so much for sharing
Thanks for watching!
I passed my financial independence number in 2020. Based on my calculations, I will hit my financial freedom number in 2022. My goal is to retire somewhere between financial freedom and financial abundance. I'll be roughly 52 years old by then. Looking forward to an early retirement! 😃
What are u invested in
How's it going🗿
lv.5 financial security now but i'm moving up the ladder
7:30 When you can't afford the right number of sides on your STOP sign.
🤣🤣🤣🤣🤣🤣
Study from age 5-21; work for others, extreme save & invest, raise a family from 21-45; semi-retire, travel, & do whatever you want from 45-75; fully retire from 75-90+. Don't work until you're 62 or 65 to retire because in most cases you won't have the energy or health to travel or do anything after 70 or 75. Retire earlier and enjoy life more! Why work all your life and then die?
Actually most important part is invest in your health and well-being. I know many people are traveling and enjoying life in their 80s.
@@freedomlife3623Yes, health is #1. By getting out of the rat race (working like hell) one will naturally have time for health. The sooner one stops working full time the better. Live simply, lower costs, and enjoy life! Better yet, pass down assets like home to children so they don't even have to save up for housing. It's already paid off.
This is literally one of the best videos I’ve seen in awhile!! Keep it up! Thank you
Glad you liked it!
Monday motivation!
I haven't finished watching the video yet, but I have got to say that this channel is amazing, keep doing the amazing work.
Wow, thanks! Glad you're enjoying the channel so far :)
Good to know where we're at and where we're going! Great video
Thank you!
You're welcome!
I don't think any of these "financial experts" understand cars. If you have have car loans, your cars are likely only worth about what the loan values are, at best. Meaning, if you sell the cars... you have $0... or you likely owe some money. And since they don't yet have an emergency fund... they don't have cash to go buy a nice used car.
I was wondering about selling the cars but not paying the loan in full. Won't you have to get a personal loan to get the lien off the car so you can sell it? I have never had a car loan but I would assume the bank won't let you sell their asset without fully paying the loan
Well someone ran a red light and my lawyer got the difference for my Corvette!! I feel like shaking the guys hand cause I didnt get hurt and got rid of lots of debt.
Thank god I wasn't the only one thinking this. I always hear the "sell your car and get a cheaper one" advice. Most likely you will lose money. In reality if your original car purchase is something you can manage you're likely better off sucking it up and paying it off. In the long run you will have a car that can last a couple years longer then had you bought a cheap used car. This situation isn't ideal but if you've already made a bad car purchase (and had the car for a while) then this is often the best course of action.
The financial experts understand depreciation and interest. A $20,000 car depreciating at 10% per year loses $2,000 in the first year, while a $4,000 car loses $400. Similar for a car loan, $20,000 at 14% interest costs $2,800, while a $4,000 loan at 14% costs $560 per year.
Sell the new car for $20,000, buy an old car for $4,000, and put the remaining $16,000 into the car loan. Your current net worth remains unchanged, but your costs reduces from ($2,000 depreciation + $2,800 interest) = $4,800, down to ($400 depreciation + $560 interest) = $960 in the first year.
I'm at level 2 but until end of the year i don't t have any suprized purchases or any debt. And I change my home with another lower rent place. So while when I'm cutting my purchases I add them to my savings and it will make me go to my goal much more easier for now (if you are putting your goals for now to 3.000€ in my account until end of te year obviously 🙂 ). But it's just a short time plan 🙃
First goal: graduate 100% debt free. 1.5 semesters to go.
What major?
@@alexbob5209 Economics with a concentration in Finance
@@Somuchcooleronline1 okay. Your degree is useful. I'm majoring in business with a concentration on finance
Get scholarships and stuff
Thanks for this video. You gave me something to think about.
Your welcome!
@@NextLevelLife "You're"
You forgot that when Jane divorces John, John will lose his house and 75% of the joint savings. Also he will have a negative monthly cash flow of alimony + child support that can be close to $3000 / mo.
The most important investment...MGTOW!
John should have chosen a life partner more carefully, rather than then playing victim
@@sgist7824 john is an actual victim of divorce scam tho, it's like telling women to wear burqa rather than play victim when got raped
@@visencorp6502 😂 again, John needs to take responsibility for his own choice in life partner.
@@sgist7824 yes, by going MGTOW of course
The Danny devito quickbooks commercials are excellent
Thank you, this really helps! As a student who's trying to learn as much as I can about finances as I can, this really gives a clearer picture on what goals I should aim for next. Currently tackling level 2, so it's a long way to go, but we'll get there!
Current at LVL 3. Most of the Markers for LVL 4 are in place, working on the investment side.
This was a great video and I thought it was really insightful! However, there are a couple things that I thought were missing. That is, interest accrued on loans and taxes on income.
The great taking
I am 32 years old and have only 5000€ of debt. I could ditch this one relatively quickly, but the problem is that I have several required emergency spendings (That I will not go into right now) that cannot be postponed, which will force me to delay any financial independence plan even further. The reason of my late entering of "early retirement scene" is because only in my late 20's I reached financial solvency. How would you suggest I proceed?
BigBadBeef I understand exactly where you're coming from. That's why I came out with this video to help others just like I was helped with steps on managing my money: ua-cam.com/video/ZuJ23STX0eo/v-deo.html Please share this video with others that need to get out of a financial bind.
Great video that I learned a good bit from but assuming a 10% return every year is a bit optimistic
The assumption is that the returns will average 10% over time. You'd be right that a 10% return each and every year would be unrealistic 🙂