Name: Simple Steps to Financial Freedom
Uploaded: 2019-05-23T11:53:49.000Z
Duration: 10 min 39 s
Description: Thousands of YouTube videos with English-Chinese subtitles! Now you can learn to understand native speakers, expand your vocabulary, and improve your pronunciation...

You may have heard that money doesn't buy happiness

Past simple

and the person that told you that probably had a lot of money,

I think what's closer to the truth is having money's not everything

And while I don't always take financial advice from rappers,

When you don't have money it becomes the source of a lot of pain, frustration, and anger.

It consumes your life and becomes the lens with which you see the world.

"Hey, how much did that cost?" "Oh, that must've been expensive."

When we don't have it, every problem seems to revolve around money.

And while being rich won't fix every problem in your life,

stacking up some money seems like a worthwhile pursuit.

When you become financially free, you will no longer make every decision solely based on money.

You don't take the job just because it pays better,

you don't have to look at the price of organic groceries to make sure you can afford them,

hell, you can take Uber Black to the airport

Imagine being at a place where you never had to worry about money again.

Imagine a place where money wasn't the major stressor in your life and on your relationships.

The steps to get there are simple, but it's not gonna happen overnight.

Save a thousand dollars and put it into an emergency fund that you'll only use in dire circumstances.

I remember reading a story from Dave Ramsey from someone who literally put their emergency fund

inside a frame with the words "break glass in case of emergency."

This money should only be used if, and when, shit hits the fan.

when you need to replace your water heater,

basically when your life would otherwise become completely derailed,

that's when you go to the emergency fund.

Because everything that can go wrong, will go wrong

and instead of borrowing money from your family again,

or pulling out your credit card, pushing yourself further into debt,

The great thing about the emergency fund is that it starts to give you that feeling of financial freedom.

For the first time maybe in your adult life, you have some room to breathe.

This step is the quickest way to finally start to gain some control back in your life.

About 80% of American adults are in debt and we've just accepted this as the status quo.

Maybe we bought shit we didn't need to furnish an apartment we couldn't afford,

or purchased a new car when we could've bought used.

For me, one of the biggest problem with debt is that it restricts your monthly income.

So when you're paying five to seven hundred dollars, even more

on your mortgage, student loans, your car payment

it severely restricts the amount of money you can save.

The other thing I'll say is that you're gonna be saving thousands of dollars

in interest if you're able to pay off your loans quicker.

Forget about cutting back on your daily lattes,

this is where you're gonna take the biggest step toward financial freedom.

Let's say you have a hundred thousand dollars in student loans at a 5 percent interest for a twenty year term

if you only pay the minimum for the entire period of the loan,

you'll end up giving the bank over a hundred and fifty eight thousand dollars.

So what's the best way to pay off your debt early?

There are a couple takes on how to do this.

You could tackle the high interest loans first.

Each loan is a different amount with a different interest rate.

By the numbers, the smartest decision is to attack the highest interest rate first,

Another option is called "The Debt Snowball."

By tackling the smallest loan first, we're able to knock it out quicker,

which helps build momentum and motivates us to pay off other loans.

So when I first got really serious about paying off my debt early

I brought everything and organized it into a spreadsheet like this.

sometimes I would log in every single day

and just visualize what it would be like to pay off some of these loans.

And I would just delete them, one by one, like a madman,

like somebody who's completely delusional,

and I would keep an eye on my monthly payments

because I knew that if I could get them low enough, then I'd be able to move out of my parents' house.

I started to feel like there was a light at the end of the tunnel

and I would actually eventually be able to pay all this off.

What would it feel like to have six to twelve months worth of expenses in your bank account at all times?

Imagine the kind of freedom and stability you'd have

that you'd be taken care of for the foreseeable future.

This is why having runway is so important.

Open up a spreadsheet and take account of all your monthly expenses.

Rent, groceries, internet, insurance, Netflix, your phone bill, etc.

So pulling all of this information into my spreadsheet was an amazing way for me to start to see

what's the absolute minimum that I needed to survive on?