How to Get Peace of Mind with Money (1)
How to Get Peace of Mind with Money (1)
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00:00Money and finances are probably wrecking your peace of mind.
00:04They are a leading driver of health
00:06problems, family issues, and overall dissatisfaction with life.
00:11Today, I'm uncovering the hidden practices
00:13that promise peace of mind with your finances and are the steps to establish
00:19your foundation for wealth. And don't miss the last point, which wraps everything together.
00:24Let's dive in.
00:25Number one, create a monthly budget.
00:29A budget is telling your money what to do instead of wondering where it went.
00:34This is the foundation of your financial
00:36peace of mind. It's putting all of the bits and pieces of your financial life
00:40onto a digital sheet so your mind doesn't have to juggle it all.
00:44Open a Google Sheet.
00:45Have each column represent each month.
00:48Cover enough months to forecast out from today to multiple years out.
00:52This is going to be a living document, so you'll be expanding as needed.
00:56For the rows, write down every source of income.
00:59Expense and savings or investment.
01:02Write them down as they come up.
01:03You can change the level of detail later.
01:05It's just important to write everything down.
01:08Examples of income can be your salary
01:10from your job, rental income from real estate, etc.
01:14Examples of expenses can be a line per credit card that you have,
01:18which makes it easier versus writing down every single purchase, which is way too
01:23granular. Some other expenses can be mortgage payments, car payments,
01:27electricity bills, recurring vacation trips, etc.
01:31Examples of investments and savings can be automatic deposits to your stock
01:36brokerage, savings account, business checking account, etc.
01:40Don't try to make it perfect.
01:42Just start and you will improve it over time.
01:45Number two, automate as much as you can.
01:49Those who automate their finances can
01:51essentially automatically become millionaires.
01:55It's important we touch on this point before we get any further.
01:58Anything you implement from this video,
02:00you need to automate as much as possible, set it and forget it.
02:05This way it saves you time and it removes the human error out of the system.
02:10If you have credit cards, a mortgage or
02:12utilities to pay, then set them up as automatic payments.
02:15If you decide to put away some money
02:17into an emergency fund each month, do so with a recurring automatic payment.
02:22You get the gist. Automate as much as possible.
02:24Seriously, minimize the choices you make so the system can work its magic.
02:30Number three, emergency fund.
02:34You can call it a savings account or an emergency fund, whichever you like.
02:38It doesn't matter.
02:39Just open a high yield savings account that is FDIC insured and aim to accrue
02:45at least six months worth of your total cost of living.
02:48This way, if something bad happens to your
02:50income streams or there is a large unplanned expense that shows up,
02:55you should generally be covered and your life is not turned upside down.
02:59It's OK if you don't have the six months of savings to put away immediately.
03:03Just make it a goal and put away what you can each month.
03:06Build towards it.
03:07Per the previous point, automate the contribution into this emergency fund.
03:12This is not a sponsored suggestion,
03:14just purely from my own research and experience.
03:16But I prefer using Wealthfront.
03:18They offer a five percent annual return
03:20on the amount you have with them, and they are FDIC insured to the millions
03:25of dollars and taking money out as simple and fast.
03:27I have a link in the description.
03:29If you want to try them out with a bonus
03:31of an increased savings rate for a few months, always think about how hard your
03:35money is working for you. The return rate is a good measure of that.
03:38Five percent is great for an emergency fund.
03:41Number four, open a brokerage account.
03:45Now, let's talk about the growth aspect of your finances.
03:48You need some of your money working
03:49harder for you to really give you peace of mind.
03:52That's where a brokerage account comes in.
03:54Open a brokerage account with a strong
03:56platform that also gives you good returns on your cash that sits there.
03:59Also not sponsored, but from comparing all of the options out there,
04:03I recommend using a recently upgraded Robin Hood gold brokerage account.
04:08This option gets you five percent on your sitting cash and a one percent match
04:12on all cash deposited into an IRA when you sign up for their gold account,
04:16which is only a few dollars a month.
04:17And a user interface that is modern and simple.
04:20There's also a referral link below in the description for you to try them out.
04:23Set up a recurring deposit each month and buy stocks in companies that you
04:27personally know well and enjoy the products of.
04:30Do you love Costco? OK, then buy a few shares of Costco.
04:33Do you love Lululemon? OK, buy a few shares of Lululemon.
04:36Don't get into things you don't know about.
04:38That's just throwing your money into a casino.
04:40An index fund should always be a part of your mix of stocks.
04:43Vanguard has very good index ETFs to choose
04:46from, such as VOO and VGT.
04:48We'll get into more about stock
04:50investing and the principles to follow in other videos.
04:52So subscribe so you can be sure to get those tips.
04:56Number five, monitor long term trends.
05:00The stock market is designed to transfer money from the active to the patient.
05:05And this point is relevant for more than just the stock market.
05:08But spend your research understanding the long term trends,
05:12the macro behaviors more than the micro.
05:14Play the long game and don't worry about the short term fluctuations.
05:18Peace of mind comes from avoiding the short term bets, which is close to
05:21gambling and riding the macro waves and cycles that ignore the noise.
05:26Spend time reading about macro statistics
05:28and cycles that the local and global economies go through.
05:32Learn about technological shifts and changes in user behaviors and needs.
05:36Zoom out when looking at charts so you see the momentum across multiple years.
05:41Another non-supported tool I recommend using is TradingView.
05:46This tool has a great user interface to view stock charts and you can easily view
05:50the charts over multiple years and write down your comments for easy tracking.
05:54Link in the description as well.
05:56And while we're on long term trends, let's crowdsource some thoughts.
05:59What long term trends do you think are
06:01present today that we should consider when investing our time and money?
06:05Write in the comments below.
06:07Number six, pay off high interest debt first.
06:11You've heard this before.
06:12I'm sure paying the high interest rate debt first will save you the most money.
06:17Paying high interest is basically
06:19letting those credit companies win big at your expense.
06:22It should disgust you whenever you have to do it.
06:25So let's pay down those high interest
06:27debts as quickly as we can and get to a state where you are winning and not them.
06:32Low interest debt can be strategic.
06:34So not all debt is bad.
06:36If you borrow $10,000 at 1% interest,
06:39some may say you shouldn't borrow money.
06:41That's for suckers. Pay it off and fast.
06:44Well, if you followed the advice I gave
06:45you and opened up a Wealthfront savings account, you could put that $10,000
06:49into that account and be making 5% back 1% annual paid an interest to get 5% annual
06:55back you net 4% oversimplified.
06:59But point is, it's a numbers game and it's
07:02all about how you are going to use that money.
07:04How will you make it work for you?
07:06Sometimes you need to buy something with that money, whether it's a car,
07:09solar panels, a home, then it's up to you to determine how important that item is
07:14for you, how productive will it be in getting you to your goals?
07:18Number seven, maximize credit card points.
07:23Maximizing points is about finding value
07:26in the myriad ways to earn and spend them.
07:28You are going to spend money anyways.
07:30Might as well get stuff from it, right?
07:32Credit card companies are pushing all
07:34types of offers to try and win you as a customer.
07:36Some credit cards are good for general use and some are good for specific use.
07:41Just figure out what you mostly spend money on and see which credit card makes
07:45sense. The points you accumulate can either pay off the credit card balances or be
07:49transferred over to airline points or hotel points.
07:51It's realistic to be able to pay for an
07:54entire vacation with points, at the very least the airfare and hotel stay.
07:58The non-sponsored credit card I would
08:00recommend here for general use is the Robin Hood Gold credit card.
08:04This provides three percent back on all purchases with zero annual fee.
08:09You just need to have a Robin Hood Gold
08:11brokerage account, which I recommended earlier.
08:13Link for the referral is down in the description.
08:16And if enough of you guys sign up through my referral, I will make a video showing
08:20you guys an unboxing of an actual gold credit card that they are giving to those
08:25that refer 10 people, something fun and iconic just for our community to enjoy.
08:29And for all of your credit cards,
08:31remember to set an automatic payment of the statement balance each month.
08:36This way you pay no interest.
08:38Control what you spend so that you can pay the entire statement balance.
08:42The budget spreadsheet you created will
08:44help you know what you can spend each month without exceeding what you can pay.
08:48Number eight, pulse audit your finances.
08:52After doing all of the mentioned tips for peace of mind with your money, make sure
08:57to reserve some time each week or every other week to review your budget.
09:01Google Sheet and your credit card charges.
09:03Schedule a working session at a cafe,
09:05you by yourself or you and your partner, your laptop and a cup of coffee while you
09:09go through your numbers and see what needs to be tweaked.
09:12After every month goes by, see how far your forecast was to your actual numbers.
09:17How much did you keep to your credit card spend limit?
09:19How different is your forecasted checking
09:21account balance to what it actually ended at?
09:24Balancing out your budget with actuals
09:26will help refine your understanding of your life with money and incrementally
09:30get your budget to be more and more accurate and helpful.
09:34The more accurate your budget becomes, the less you will worry about your finances.
09:38The easier you will close that browser window and not be stressed with money so
09:43you can live your life, work on your projects and just feel real good.
09:48And if you'd like to get some pro tips
09:50for leveling up your mind in general, check out this video here.