Placeholder Image

Subtitles section Play video

  • If You Have $1000 In The Bank, DO THESE 5 Things!

  • There is no limit to how much you want, even a hundred trillion dollars is not enough,

  • because once you have the entire planet, you would want to go to mars.

  • You perfectly know who I am talking about ( Musk & Bezos).

  • On the other side the good news is that, once these people leave the earth, they will no

  • longer be on the Forbes list because the Forbes list considers people who live here on earth,

  • which means now you have a higher chance to be on the top of the Forbes list, but I think

  • the founder of LVMH, Bernard Arnault will take their positions because apparently, it

  • seems like you don't need to build a tech company to become worlds richest person.

  • All you have to do is sell overpriced handbags to people who make a lot of money but are

  • still dumb enough to waste all that money on overpriced handbags with a logo that literally

  • says.

  • I have paid 5K for this handbag that literally performs the exact same job that any other

  • handbag does that cost $10.

  • But you can't call them dumb because they are making so much money, but they could be

  • dumb because they're wasting that money on dumb things, so I will leave that question

  • for you to answer in the comment section below.

  • I didn't mean to offend anyone.

  • I just can't understand why anyone would pay 5 or 10K dollars for a handbag.

  • Maybe I am just not smart enough to understand that.

  • Let's get back to the question of this video, how much money do you need to retire.

  • Let's just be realistic.

  • 10 million dollars? 100 million dollars? 1 billion dollars?

  • The answer is far from that.

  • in order to answer that question, we have to take a look at a few statistics.

  • In 2019, right before the pandemic, The Bureau of Labor Statistics said that the median personal

  • income is $35,977 or $61,937 for households.

  • But let's ignore the median and focus on the average household income, which is $87,864.

  • Of course, this number is not accurate for everyone because if you are in your 20s, you

  • need far less money compared to someone who is in their 60s who needs to pay a fortune

  • on insurance because with age comes health problems.

  • That's why guys if you want to save money, take care of your health and stop eating all

  • that junk food.

  • The next question is - how much do you have to invest in order to earn $87,864 every single

  • year without doing anything.

  • We are going to take a look at a few available options, and we will do the math.

  • If that number is higher or lower for you, you can just take that equation and use a

  • different number that suits your circumstances more accurately.

  • Don't be scared of the numbers we will talk about because at the end of the video, it

  • will all make sense.

  • That's why it's important to pay attention.

  • I get it.

  • It's not easy.

  • After watching 15-second TikTok videos, watching a 10 minute YouTube video seems like a 3-hour

  • movie, but I promise the value you will get from this video is far more than you will

  • from hours browsing Tiktok.

  • Have

  • you heard the phrase, never spend the principal, only spend the interest.

  • And that's the key to financial freedom.

  • If you have inherited 10 million dollars, let's say you invest it and get a 5 percent

  • interest annually.

  • That's half a million dollars a year.

  • For the rest of your life, you can confidently spend $500K or $41,666 dollars every single

  • month for the rest of your life, and your wealth won't even decrease by a single penny.

  • That's way better than splashing that 10 million dollars in one single year.

  • But the key question - since the average household income is $87,864, how much do you need to

  • invest to make that much money every single year?

  • For the sake of this example, We are not going to take any risky investments such as Crypto

  • or individual stocks such as Tesla or GameStop.

  • We are going to be ultra-conservative and take something super stable, something that

  • historically has proven to grow by a decent percentage like the S&P500 that grows by around

  • 10 percent a year.

  • 10 percent out of $878,640 is $87,864, the amount that we are looking for.

  • This means if you manage to invest $878,640, for the rest of your life, you can spend $87,864,

  • and your wealth will remain the same, but the problem is, how do you save $878,640?

  • when the average household income is $87,864.

  • That's literally saving every penny you earn for 10 straight years, which is impossible

  • for most people.

  • And that's the average which means, people who are in their 20s do make anything close

  • to that.

  • And that's where the magic of compound interest comes into the picture.

  • Let's say you are 21 years old, you are about to graduate and looking for a job, but luckily

  • you have saved 1K dollars.

  • Whether your partied less, avoided cool Starbucks coffee or you were single during your college

  • days.

  • That's one of the benefits of being single, but does it worth it?!

  • Anyways, let's assume you will invest that amount into the S&P500 and completely forget

  • about it.

  • You are not going to Withdraw it next September when the new iPhones comes up or when you

  • have no money left to hang out with your friends.

  • You will live as if you have never had that money at all.

  • And every single year, till the time you retire, you commit to invest 1K dollars into the SP500.

  • When you retire at 66, you will end up with 863,685.80 or $86,368 every single year.

  • By saving just a thousand dollars a year, you have built wealth that worth almost a

  • million dollars and generates $86,368.

  • That's why Einstein once said: "Compound interest is the eighth wonder of the world.

  • He who understands it, earns it, he who doesn't it, pays it!"

  • I know that waiting for 45 years sounds like a really long time, but we also took a very

  • small amount of money.

  • Saving 1K is not a big deal for most of the people who are watching this video.

  • We can take a more extreme example where you could save 3 or 5K dollars a year, and you

  • won't have to wait for 45 years to rip the rewards of compound interest.

  • Let me in the comments section below, how much are you willing to invest a year?

  • But not everything is sunshine and rainbows.

  • While in theory, it's possible to get a 10 percent rate of return, in practice, it gets

  • slightly more complicated.

  • The inflation rate in the US is around 2 to 3 percent, which means if you don't want the

  • real value of your investment to decrease every year by 2 or 3 percent, you should not

  • withdraw more than 7 percent of your investment.

  • On top of it, if you want your investment to grow by at least a small margin, like 2

  • percent, you are left with just 5 percent.

  • So, if you want to be able to withdraw $87K dollars and be confident that inflation won't

  • wipe out your wealth over time, you have to invest double that amount or 1.7 million dollars

  • or 2K dollars every year instead of 1K dollars, which is still reasonable for most people.

  • If you check out the fire community on the internet, you will find endless examples of

  • how people lived frugally for 5, 10 or 15 years and saved the vast majority of their

  • earnings but eventually became financially independent.

  • You don't have to go that extreme because life without work is boring, so you can pursue

  • this strategy as a backup plan in case if things go south.

  • But, you probably have a million questions about how that is possible.

  • I get it.

  • I was once in your position.

  • And to answer all of your questions, I have created a course that simple, straightforward

  • and fully animated.

  • I have literally answered almost all of the questions you have in your mind.

  • I strongly recommend it if you are serious about investing.

  • It will not just teach you how to invest in index funds but teach you how to analyze stocks

  • and read financial statements, and at the end of the course, you will have to complete

  • an assignment that I will personally check, and the best part of it is that you can get

  • 2 weeks of Skillshare premium if you use the link in the description and get the course

  • for free.

  • So don't miss it.

  • But what certainly have to keep in mind that you should not do anything with your money

  • unless you have covered your credit card debts first.

  • If your credit card has an annual percentage rate of, say, 20%, that doesn't mean you get

  • charged 20% interest once a year.

  • Depending on how you manage your account.

  • That's because interest is calculated on a daily basis, not annually, and is charged

  • only if you carry debt from month to month.

  • So it doesn't make sense to aim for a 10 percent rate of return while you have a debt with

  • 20 percent interest.

  • If you have enjoyed this video, you will most definitely enjoy this custom playlist that

  • I have created specifically for you that has our most popular videos on .... that can potentially

  • change your life.

  • And now give this video the thumbs up that it deserves, and make sure to subscribe if

  • you haven't done that yet.

  • Thanks for watching and until next.

If You Have $1000 In The Bank, DO THESE 5 Things!

Subtitles and vocabulary

Operation of videos Adjust the video here to display the subtitles

B1 percent invest interest single compound interest handbag

If You Have $1000 In The Bank, DO THESE 5 Things Now!

  • 15 0
    Summer posted on 2021/07/09
Video vocabulary