How You Can REALLY Get Rich Quick
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- Опубліковано 3 лип 2024
- 00:00 Intro
00:53 Income & Expenses
02:38 Examples
05:00 Lifestyle Creep
06:29 Exploring Careers
07:49 Optimal Savings Rate
09:06 Multiple Streams of Income
10:41 Business Income
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Disclaimer: Please note that this video is made for entertainment purposes only and not to be taken as financial advice. Always make sure to do your own research.
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Thanks for watching, I appreciate you!
He is richest who is content with the least, for content is the wealth of nature.
Socrates
"load of crap"...lol. Erin telling it like it is, even if it's not popular...gotta love that.
PLUS she's living proof you can overcome the obstacles in your way. Never made a ton of money, had health setbacks right away, but TENACIOUS...
It can be done folks, you just have to WANT IT.
Great Video! We saved and invested 50-70% of our income, over the last 10 years, in equity index funds and individual stocks, which allowed us to retire in our 30s!
What did you do about health insurance?
That's amazing. I'd work another decade to make sure I have enough. We're in our 50's, can retire now too, but want to pad the nest egg more to have an even nicer lifestyle later plus know we can have great care in our old age too. You've got SIXTY years to go! Better to have more.
Since we have long time horizon our investments will continue to grow which is mostly in equities. @@dstevens518
Great job and I hope all the hard work pays off. I know it takes some amount of sacrifice to save that amount. We paid off our modest house in 5 years, which allowed us to save 65% of our average income in our 30s. My advice to my younger self, "Start saving with your first job at 15 years old."
I love your no nonsense tell it like it is approach. There are no gimmicks! Just important decisions with a very easy income/savings formula.
Simple Path To Wealth. Earn, live beneath your means, save and invest. It really does make wealth inevitable. How fast you get there is up to you.
@@dstevens518 it's like losing weight, but everyone wants the easy gimmicks.
Certainly eye opening how a 1% increase in savings can make such a difference!!
For the last two years, I had a very good salary and I was able to save the 65% as described in the Examples section of this video. The only reason why I was able to do it is because my house was paid off in late 2020. If I had a mortgage, I think the best I would have been able to achieve would have been somewhere around 50% to 55%. It's incredibly difficult to save more than 50% and you need a very good income to do it.
Move somewhere cheap with low taxes. I work online and moved to South America. I now am able save close to 90% of my USA paycheck due to cutting my cost of living by 75%
Always to keep in mind about averages is that the national average is unlikely to apply to your average.
A few people making millions of dollars a year outweigh a few hundred people earning part time minimum wage. The national average is going to look impossibly low in New York or California, but look impossibly high in rural Oklahoma (no offence Oklahomans!). So always look up averages for tour state or county for a more realistic comparison.
Another issue with averages is by age. In my local area the average household income is around $65k. So my wife and I will be just shy of $100k this year, and hopefully going to break $100k next year, so we are doing great! Right?... Right?! Actually, no. For our age group in our area the average income is just shy of $150k. So in a lot of ways we are waaaaaay behind the 8 ball. And there aren't many options for our personal situation to raise our income without extreme effort and/or sacrifice, and we are pretty well tapped.
But, the average income in our area is $65k, so it is more than possible to live a humble simple lifestyle closer to $50-60k, and that is what we do. This frees up about $30k that we can invest directly in a year. Then if you add in the amount of our house payment going towards principal, plus the employer match on my 401k and HSA, we are technically saving and investing nearly 50% of our income, and if we manage to continue to raise our income, then we should be able to get a bit above that 50% mark.
And every situation is different. I was late on a career track, and my wife and I both have health issues to contend with, so we are very late to the savings and investment game, and still very much playing catchup, and with an eye to at least Simi-retire early and work part time in our later years to account for our health issues which aren't likely to get better with age lol.
So we are a few years into saving near half our income, and should hit our age target for retirement savings in another year or two. After that, the plan is to keep up the extreme savings rate for another 3-5 years to get well ahead of our target, and then start backing off and converting a few percentage points from savings to lifestyle. The idea being that if we get ahead and generate a certain critical mass of funds, then it will allow compounding to do more and more of the effort towards our retirement plans. Saving more earlier, to give more flexibility the closer we get to retirement age.
First we were spending nearly half our income paying down debts, and that didn't feel good. Now we are saving nearly half our income to play catchup, and that feels a little better, but not quite like winning. I can't wait to get to the point where our sacrifices are to get ahead instead of paying for past mistakes and shortsightedness lol
Thoughtful post
Great video ❤
Engagement for Erin. Keep up the great work!
THAT'S TOO SIMPLE, ERIN!! :D
The big shovel is totally correct, nice job
I’m in my mid 40s saving 36% of gross income per month. I might be able to save up to 50% if I squeezed my budget to the max.
Can a person in their 50 s do this too
Your channel is really growing. I am so happy for you. I can’t wait for you to employ your baby and then contribute to your babies Roth IRA 😀
Thanks Darrell 💙🙏
The wife and I save about $100k/year for retirement but we make about $420k/year and we’ve been saving about 40% for 32 years. Our largest expense is federal and state income tax (California) by far. I turn 60 this coming January and our CFP told us, via Monte Carlo simulations that by the time I hit 70, our net worth will be as low as $31M and as high as $160M. Now the wife wants me to quit now but I love my career, colleagues and manager. Compound interest is truly powerful! I love the stock market but despise real estate investing.
not sure why u hate real estate...survivor bias maybe...but at ur income u don't need it...but for most of us average earners, the sweat equity possible can expedite the growing of ur net worth...worked for me....
Everyone has preferences as to which of the 7 wealth opportunities are right for them. Like you, my #1 preference was to be a super saver. I also love investing in the stock market and have gotten better at it over the years in part because I read and study everything I can and do not listen to the online "talking heads" who give specific stock investment advice. I enjoy listening to Erin's common sense advice.
I truly appreciate your perspective and encouraging attitude. I have found that inherited wealth played a significant role among some of my contemporaries. Not all were ab!e to keep what they received, but most started out financially advantaged.
A survey of 10,000 millionaires by Ramsey showed that 79% had no inheritance. 5 % had a tiny inheritance, like $5-10K, which was immaterial to achieving millionaire status. 5% got a substantial inheritance but only after they had already become millionaires. So 89% of millionaires did not have generational wealth to thank for their millionaire status.
What is a good rule of thumb, considering your current station in life as a retiree, what % of your yearly fixed income should go towards homeowner's insurance/real estate taxes? 1/12? or less?? Assuming zero debt...Thank you Erin!!!
I think your formula for optimal savings rate might be off or at least not properly titled. 95% savings rate would still need to yield over 35-40 years to achieve an amount capable of retiring on. The graph implies that you can work expense free for 1 year and achieve retirement but I dont think the graph points out that the extended timeframe of consuming retirement assets.
I have been treading the in between path of looking after my future but also enjoying the now, within reason. Planning for a comfortable and enjoyable retirement is very important but not everyone gets there. I am well aware that my mother and 3 of my grandparents died relatively young and never got to enjoy retirement.
To each their own. Everyone will have a different attitude and that's why it's called personal finance. I'd agree, you don't know for sure when your time is up, so have some fun, while you're saving...
Is the savings rate based on your gross pay then? I've never calculated it, but it looks like my savings and investment rate is around 36%. Never really tried to calculate it before. I just have a few different automatic transfers coming out of my checking account and of course the 401k at 19%
7 years with a scalable business you can get rich
30% may be a hard pill 💊 to swallow 😢
Thank you Erin. Videos are very nice. What are you using for editing?
I'm living 6 pack to 6 pack.
Dear Erin Talks Money Personal Financial Consulting Coach, LLC
Not sure when FIRE became an acronym for early investors. My light bulb went off in a college personal finance class.
The Rule of 72 was a game changer for me.
We have always saved and usually 15% or more. We hit M status at 45 and it quicker doubled and then again during the 2009 Bull Market.
Time in the market is a game changer for sure.
I have not seen the savings rate to FIRE before, thanks for sharing.
Tony
FIRE = Financial Independence Retire Early.
I think you should have made it more clear to invest the money than actually save it.
Erin you hit on exactly what I say. You start out with say 10k and have a 20% year. Ok only 2k. But now after a few years you have 500k and make 20%. Ok now we are talking. That’s a 100k. Money working for you. 🎉
My percentages are all over the place for the next 7 years. My daughter will be out of daycare in 2 the house will be paid off in 3 unless we invest more than 25% and I'm switching careers in 1 or 2. It feels like it's all up in the air. 🙃
Can someone who is 53 follow your advice for exploring new careers
Question? - What does financial freedom mean in context for the video? Is it 1Million Dollars or equal to your current income? Thanks!
Financial freedom occurs when you have enough (passive) income to live as you like. I’d like to live on $80k a year, which requires $2 million in SPY.
Thanks for the response. This would mean that financial freedom would be different for everyone. How do the charts with percentage of income to get to financial freedom apply since they don't account for income or total amount needed?@@jasonjstdr
@@Espresso-15 The chart works for any income, it's in percentages.
The US has no national healthcare coverage ... before you 'get rich quick enough to retire', call up your favorite healthcare insurer and ask for a quote for private healthcare coverage premiums (for the remainder of your natural lifespan) ... that estimate alone will stop you from dreaming about the FIRE movement and retiring rich "after only 10 years"
Easy solution, live abroad….
Kids don't necessarily increase your lifestyle, but they sure do increase your expenses
How can you build a nest egg in your 20s with crushing student loans, high rent costs, and inflation tho? It's just not realistic unless you come from a family with money who can help you with student loans, free housing, mortgage payments, etc. Basically the rich can afford to stay rich in most cases. But the rest of us have to struggle to dig ourselves out of holes in our 20s.
True. Those aren't excuses, they're reasons. But that just means more focus and discipline and time will be required for the rest of us. We did it, and didn't really even know we were doing it. We're in our 50's now, and when we were young, it was reasonable for the young to be poor and not feel the pressure of social media to live above our means. Ignore that b.s., develop good habits, and you'll find it's not as hard as you think..
If your employer does matching funds for 401(k), contribute that much as it is pretty much free money, but after you have several months worth of an emergency fund focus on paying off that debt. Build the nest egg later. The essential thing is to build the habit of increasing your net worth each month. Once the debt is paid down, pivot immediately by putting the same amount of money each month into an investment account.
Wait.... you're an insurance adjuster??
4:02 duh
There’s a lot of assumptions in this video. Economy and job stability matter a lot as well
70% saving? get real.
See Prepper Princess
Can be done with lots of sacrifice. The bulk of that sacrifice will be during the time you are becoming debt free.
@@romanprzybylinski9992 Yes it can! And the earlier one can do this the better. Time can be your ally or your enemy
Note that the 65% savings rate here is based off of after-tax income. If it was gross income I would agree, but I'm saving 78% after tax so it's not that unreasonable (53% gross).
If someone can live on 20% of your income, then you could save 70%. The last 10% would be increased taxes you have to pay at a higher income.
Mama might need to follow her own advice, even just a little, allocate some for living today????
Took me a few years to learn that one… but I am much better at it these days 😊
@@ErinTalksMoney awesome. Baby steps. Hint hint. Any update???
Baby is here 😊 had a very scary delivery but everyone is healthy now - we are adjusting to life - more updates to come soon
@@ErinTalksMoney❤❤❤ glad all is ok now. That’s what matters most.
@@ErinTalksMoneyany money content regarding new parent life? My first is due late December
Good lesson; pretty girl too
get married to a rich person and then get a divorce, not telling any one to do this but that's one of the fastest ways people have done it.
This doesn't work in every state. In my state only things earned or purchased after you got married are split. Anything someone already had before the marriage remains their property and cannot be touched.
Many women meticulously plan their divorce before they even get married. The length of the marriage, how many kids, etc. for maximum cash after they bail.
@@CB_4216I doubt that. Children aren’t pawns, and the work and money they require would make their use in order to maximize money from a divorce absolutely stupid. Honestly, you sound jaded. I’m sorry if you’ve been personally affected by a divorce, but I believe you need to be more forgiving of the other party/parties involved.
@@CB_4216this statement has been determined to be untrue!
Especially since two different men tried that with me. Scary. Dodged both bullets and my eyes are wide open now. Just because society doesn’t talk about male gold diggers doesn’t mean they don’t exist.
A rich person is likely to have you sign a prenup too.
ur verbiage is confusing...financial freedom is too vague and relative a metric...so not useful...financial independence is more definitive and objective.