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How To Manage Your Money Like The 1% — Transcript

by Mark Tilbury · 5,946 words · 865 segments · language en · Watch on YouTube

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0:00Let me tell you something that will
0:01change your life if you let it sink in.
0:04The richest people in the world are 75%
0:06entrepreneurs, 15% investors, 7%
0:11inheritors of wealth, 3% athletes,
0:14entertainers, and artists, 0% employees
0:18who just earn a salary. So, if you want
0:20to know how to manage your money like
0:22the 1%, you have to understand what
0:24those first four categories have in
0:26common. So, let's think about it.
0:28Entrepreneurs own businesses. Investors
0:31own assets. Rich kids own trusts.
0:34Finally, athletes, entertainers, and
0:37artists own rare skills. So, it's clear.
0:40If you don't own something, you are
0:42what's owned. That's the secret most
0:44people miss. So, how can you start
0:46owning things like the 1%? Well, you
0:48need to follow the 25-15-50-10
0:51rule. I designed this rule so that
0:53anyone, no matter what their income, can
0:55manage their money like the top 1%
0:58because the truth is it's not about how
1:00much money you make, it's about how you
1:02manage what you make. I'm not just some
1:04YouTuber. I've actually used this rule
1:06for decades and it's enabled me to
1:09become a multimillionaire, even though I
1:11started out with no money and no
1:13qualifications. So, let's get into it.
1:19The first 25% of your income should be
1:22going towards growth. This is the 25%
1:25that works for you. By growth, I don't
1:28mean some kind of mindset nonsense about
1:30growing as a person with the power of
1:32meditation. I mean using this money to
1:34buy things that increase in value. You
1:36see, when most people get their
1:38paycheck, they pay the bills and then
1:40blow the rest on useless things they
1:42don't even remember buying. This is
1:44exactly why 99% of people are trapped
1:46owning nothing of value. The truth is
1:49this is all by design. The system wants
1:52us rich for a week, then skint by the
1:54end of the month, waiting for the next
1:55payday, so we've got no breathing room
1:58and then we're forced to work even
2:00harder next month just to keep up. This
2:02is effectively modern-day slavery. Just
2:04think about it. Slaves used to work
2:06every day with no pay, but they got free
2:09food, shelter, and water. Today, people
2:12work nearly every day and get paid.
2:14However, their money is mostly spent on
2:16food, shelter, and water. The only thing
2:18that has changed is the illusion of
2:21freedom. Once you understand this, you
2:23can start fighting back by taking that
2:25first 25% of your income and putting it
2:28straight into assets. This is anything
2:30that grows in value over time and puts
2:32money in your pocket. The idea is that
2:34while you're out working, these assets
2:36that you own are working for you in the
2:37background. Eventually, these assets
2:40could even make you more money than your
2:41day job. You might think you don't have
2:43enough money to invest in assets.
2:45However, you need to find the money
2:47because the sooner you start, the
2:49better. Let me show you something that
2:51will blow your mind. This is Billy. He
2:53started investing $200 a month at 20
2:56years old. And this is Phil. He didn't
2:59start until he was 30, but to catch up,
3:01he invested $300 a month. Now, let's
3:04fast forward it to when they reached 60
3:06and they both stopped investing. Now,
3:09I'm going to give Phil a walking stick
3:12and I'm going to give Billy some
3:14glasses. Right, that's better. Now,
3:17let's add up how much each one saved.
3:20Billy put in $200 per month for 40
3:22years, so that's a total of
3:26$96,000.
3:28However, Phil put in $300 per month for
3:3130 years, which is a total of
3:35$108,000.
3:37So, Phil ended up with more money,
3:39right? Because he saved more each month.
3:41Well, not exactly because they were
3:44investing instead of just saving. If we
3:46assume an average annual return of 10%,
3:49which is the average return of the S&P
3:51500 over the last 100 years, then the
3:54numbers start to look a little bit
3:56different. Phil's investment would be
3:58worth
3:59$678,146.
4:04Not bad. Whereas, Billy's investment
4:06would be worth a staggering
4:09$1,264,816.
4:14How crazy is that? Billy invested
4:17$12,000 less, but ended up with nearly
4:20$600,000
4:22more, all because he started earlier.
4:24That's the power of compound growth.
4:26That's why you should start now, even if
4:28it's small, because waiting will cost
4:30you more than you think. But, how can
4:32you actually get started? Well, step one
4:34is to select your growth assets. There
4:37are loads of ways to grow your money,
4:39but not all of them carry the same risk
4:41or reward. So, I like to think of them
4:43as a scale from relatively safe and
4:45steady to high risk, high reward. At the
4:48lower risk end, we've got
4:51index funds. Honestly, this is where
4:53most people should start. You're not
4:55trying to pick winners, you're just
4:57buying a slice of the whole market, like
4:59the S&P 500 I mentioned before. You
5:02don't need to check charts or time the
5:04market, you just let it sit there and
5:06grow quietly in the background. Then
5:08there's
5:09real estate. That could be rental
5:11property if you've got the money or
5:12REITs if you haven't. REITs lets you
5:14invest in real estate without buying a
5:16property. It's kind of like buying a
5:18small share in a building with a bunch
5:20of other people. In the middle is
5:22skills. Learning a skill that makes you
5:25money is hands-down the fastest return
5:27on investment you'll ever see. I'm
5:28talking about things like copywriting,
5:31editing, sales, coding, anything you can
5:34actually use to bring in income. Unlike
5:36stocks or property, no one can take it
5:38away from you. However, it does take
5:40more time to learn and that's why it's
5:42higher up the risk scale than the other
5:44two. Further up, we've got online
5:47businesses, stuff like drop shipping and
5:49selling digital products. These can pay
5:51off big, but they take a lot of effort
5:53and you've got to be ready to fail a few
5:55times before you find your feet. Then we
5:57get to individual stocks. I know it's
6:00tempting to try and pick the next Tesla,
6:02but unless you've done your homework and
6:04you really know what you're doing,
6:06you're basically just guessing. So, if
6:08you're going to do it without learning
6:09the specifics, keep it small and treat
6:12it like a hobby, not your main strategy.
6:14And right up the top is alternative
6:17investments. I'm talking Bitcoin,
6:20Ethereum, NFTs, gold, wine, sneakers,
6:23you name it. Can you make money with
6:25these? Absolutely. Can you lose it
6:28overnight? Also, absolutely. I've played
6:31around with some of these, but I never
6:33risk more than I'm willing to lose.
6:35These are your moon shots, fun to try,
6:37but not where you'd build long-term
6:39wealth. So, if I were you, I'd start
6:41with the stuff that actually builds a
6:43foundation, which are index funds and
6:45high-income skills. Then, as you grow
6:47more confident, you can start dabbling
6:50with the rest. you know what to invest
6:52in. Now, we've got to talk about how to
6:54invest because if you're doing it
6:56through the wrong kind of account, you
6:57could be handing over thousands in
6:59unnecessary tax without even realizing
7:02it. That's why step two is to set up
7:04tax-advantaged accounts. Right, let me
7:07show you the smart way to legally save
7:09as much money as possible. Before we
7:11dive in, remember I'm not a financial
7:13advisor. I'm just sharing what I've
7:15personally done over the years. Okay,
7:17let's start with the UK.
7:21One of the best options is the stocks
7:23and shares ISA. You can invest up to
7:25£20,000 a year and anything you earn is
7:29tax-free. You can set one up on
7:30platforms like Trading 212. All you have
7:33to do is select the stocks and shares
7:35ISA when you sign up. Since I was
7:36planning to talk about Trading 212
7:38anyway, I reached out to see if they'd
7:40be interested in sponsoring this portion
7:42of the video. They agreed and are also
7:45giving away a free fractional share
7:47worth up to £100 to anyone that uses the
7:50code Tilbury when they create an
7:51account. You can also invite your
7:53friends and once they fund their
7:55accounts, you'll both get a free
7:56fractional share. If you're working a
7:589-5, you've probably got access to
8:02a workplace pension. Usually, you'll put
8:05in 5% and your employer will match with
8:083%. That's basically free money. You
8:11don't pay any tax on the money it earns
8:13while it's growing, you only pay tax
8:15when you take it out later on. If you're
8:17in the US, your setup's a little bit
8:19different. The Roth IRA is one of the
8:22best accounts you can open. You invest
8:24money you've already paid tax on, but
8:27every penny it earns grows completely
8:29tax-free and when you retire, you can
8:31take it out with zero tax. The limit on
8:34this account is $7,000 a year if you're
8:37under 50. Even billionaires use this
8:39account. Peter Thiel, one of the guys
8:41behind PayPal, reportedly turned his
8:44Roth IRA into over $5 billion.
8:47He did this by investing in early-stage,
8:50high-growth companies including PayPal
8:53and Facebook, which then increased in
8:55value significantly. Then there's the
8:57401k,
8:59which is basically the US version of a
9:01pension. The money you put in comes out
9:03of your paycheck before tax. It also
9:06grows over time without being taxed
9:08while it's invested and if your employer
9:10offers a match, definitely take it. Now,
9:13I know a lot of you aren't in the UK or
9:15USA, so here's a list of all the
9:17tax-advantaged accounts I could find.
9:20Hopefully, you can find an account in
9:21this list that lets you take advantage
9:23of the tax savings your country offers
9:25you. The problem is lots of people open
9:28up these accounts, put their money in
9:30every month, and don't actually invest
9:32in anything. That brings us on to
9:35step three, actually start investing.
9:38All right, so now you've picked your
9:39growth assets and you've set up your
9:41account. Whether you're on Trading 212,
9:44Vanguard, or something else, it's time
9:46to actually put your money to work. The
9:48best thing you can do is set up a
9:49monthly transfer that goes straight from
9:51your bank account into your investment
9:53platform, ideally on payday. That way,
9:57you never even see the money sitting in
9:59your account and get tempted to spend
10:00it. Once it lands, you don't need to
10:02mess about with charts or try to time
10:04the market. Just look for some index
10:06funds. One of the most popular methods
10:08is to build a free fund portfolio. The
10:11first fund is normally a US stock index
10:13fund, which basically invests in lots of
10:15US-based companies like Apple and
10:17Amazon, for example. The second fund is
10:20an international stock index fund, which
10:22is similar to the US-based one, but
10:24instead it covers companies outside the
10:26US. And the final fund is something
10:28called a bond fund, which helps provide
10:30stability as they're generally less
10:32volatile than stocks and can help smooth
10:35out the ups and downs of the market. Let
10:37me show you how to set something like
10:38this up on Trading 212. If you haven't
10:40already signed up, then I'll leave a
10:42link in the description. If you've
10:43already signed up within the last 10
10:45days, you can head over to the promo
10:47code section of Trading 212 and enter
10:50the code Tilbury to get a free
10:52fractional share worth up to £100. This
10:55is a nice boost to get you started with
10:57investing. Then go over to pies and then
11:00click the plus icon. Now you can select
11:02whatever stocks you want to include in
11:04your pie. For our US stock market fund,
11:07let's search for the S&P 500. This
11:11Vanguard one should do nicely. If you're
11:13based in the US, then you can also pick
11:16the Vanguard Total Stock Market Index
11:18Fund, known as the VT Sax. This fund is
11:21like owning a tiny piece of 500 of the
11:24biggest, most famous companies in
11:26America, like Apple, Amazon, and
11:29Coca-Cola. By the way, look out for the
11:31terms accumulation or distribution in
11:33the brackets. Personally, I always go
11:36with accumulation as it reinvests your
11:38dividends back into the stock
11:40automatically. Then let's go and search
11:42for our next one, which is our
11:43international fund. For this, let's
11:46select iShares MSCI World UCITS ETF with
11:51the ticker IWDA and tap add to pie.
11:56This fund is like having a collection of
11:57companies from all around the world. It
11:59includes big businesses in places like
12:02Europe, Japan, and Canada. Now for our
12:04bond fund, let's search for iShares USD
12:08Treasury Bond 7-10 Year UCITS ETF with
12:13the ticker IBTM and tap add to pie. This
12:17fund is like lending money to the US
12:19government. They promise to pay you back
12:21with a little extra, which helps you
12:23keep your money safe and steady even if
12:25stocks go up and down. Right, now those
12:27are added, we can click the arrow to go
12:30to the next step.
12:31On this page, you can adjust the
12:33percentage allocation of your money to
12:35each fund. If you go with an aggressive
12:37approach, this involves investing more
12:39in stocks, which can grow faster, but
12:42can also go up and down a lot. For
12:44example, you might choose an investment
12:46mix where 90% of your money is in stocks
12:49and only 10% is in bonds. This setup has
12:52the potential for big returns, but also
12:54comes with sharp ups and downs in the
12:56short term. If you prefer slightly less
12:58risk, but still want a chance for higher
13:00returns, then a slightly less aggressive
13:03approach might suit you better with
13:05around 80% in stocks and 20% in bonds.
13:09Don't get put off by the terms
13:10aggressive. It's all down to your age.
13:12As a general rule of thumb, the older
13:14you are, the more bonds you should have.
13:16So let's make the S&P 500 60%,
13:20the iShares World Fund 30%, and the bond
13:24fund 10%, and click next and then auto
13:29invest. This value projection is really
13:31awesome as it shows you how much money
13:33you could make based on historical
13:35averages. Of course, when you invest,
13:37you can get back less than you invested
13:39as investments can rise and fall, but
13:41it's still a great way to get an idea of
13:43how much you could make based on
13:45data-backed projections. Once your
13:47investing is automated, your job is
13:49simple. Stop fiddling and go and make
13:51more money because the truth is, the
13:54people who build wealth aren't the ones
13:56picking the fanciest stocks. They're the
13:58ones consistently putting in more over
14:00time. That means your focus should now
14:03be on increasing your income so you can
14:05increase your investments. This is where
14:07the skill building I talked about in
14:09step one really starts to come into
14:11play. If you haven't yet learned
14:13something valuable, do it as a side
14:15hustle, bring in more cash, then feed it
14:18straight back into your investments.
14:24The next 15% of your income should be
14:26going towards stability. This is the 15%
14:29that keeps you in the game. A lot of
14:31people don't realize that not all your
14:33money should be thrown into growth
14:35investments or spent. Some of it needs
14:37to be set aside to protect your
14:39progress. I wish someone had told me
14:40that when I was younger because I had to
14:43learn it the hard way. I didn't grow up
14:45around money, so when I turned 18 and
14:47needed a car to get to work, I didn't
14:49have any savings set aside. So I did
14:52what most people do. I took out a loan
14:54and bought myself a solid little German
14:56whip, a VW Golf. I even got a new stereo
15:00with the extra cash the bank gave me.
15:02And for about 3 months, I felt like I
15:04was on top of the world. Then out of
15:06nowhere, the engine blew up. I had no
15:08backup, no safety net, and no clue what
15:11to do. And on top of all this, if I
15:14didn't get the car fixed, I'd lose my
15:16job. So I borrowed even more, which
15:18piled on more debt, more pressure, and
15:21more stress. To me, that car didn't just
15:24break down, it broke my finances and it
15:26set me back a whole year. If I just had
15:2815% tucked away for stability, I'd have
15:31been in a completely different position.
15:34Most people don't have a money problem,
15:35they have a stability problem. One
15:38unexpected bill and it all falls apart.
15:41Even if you are investing, you'd be
15:43forced to sell your investments at a bad
15:45time, which may lead to a loss. That's
15:47why you need a margin for error built
15:49into your life. Let's get into how you
15:51do it. Step one is to calculate your
15:54stability fund. To do this, you first
15:57need to list out your core expenses.
15:59These are things like your groceries,
16:01rent, utilities, transportation, and any
16:05essential services like your internet
16:07connection, which you might need for
16:09work, not for Netflix. All of those
16:11things combined should give you a total.
16:13That number is called your monthly
16:15baseline. Let's say that adds up to
16:181,500
16:21per month. Now take that number and
16:23multiply it by 5 months. This will equal
16:26the ideal stability fund that you should
16:29be aiming to save. So in this example,
16:32that should be
16:34$7,500.
16:37So each month when you get your
16:38paycheck, 15% of your wages should be
16:40going towards building up this figure.
16:43You might be thinking this is quite
16:44extreme, and I admit it is on the more
16:46cautious side. However, I know from
16:49experience that when life hits, it
16:51usually comes all at once without
16:53warning. So if you only have a couple of
16:55months saved up, then you won't be as
16:57bulletproof. Step two is to store it
17:00correctly. Now that you've worked out
17:02your stability fund, don't make the
17:03mistake of parking it in the wrong place
17:06because where you store this money is
17:08just as important as having it in the
17:09first place. And for that reason, I've
17:11got three rules I always stick to.
17:14Firstly, it must be easy to access. This
17:17money should be available within 24
17:19hours max, so don't lock it up in some
17:22account that penalizes you for
17:24withdrawing early or won't let you touch
17:26it for 5 years in return for a bit more
17:28interest. I've seen people lose their
17:30jobs not be able to access their
17:32stability fund. That defeats the whole
17:34point. When things go wrong, you need
17:37speed, not some nonsense waiting period.
17:40Secondly, it must be zero risk. This is
17:44not money you invest, gamble, or chase
17:46returns with. Whatever you do, and I
17:48mean whatever you do, do not put your
17:51emergency fund into the stock market,
17:54not even the safe stuff because when an
17:56emergency hits, the market might be
17:58down. The same goes for crypto,
18:00long-term bonds, or anything else that's
18:02meant to grow over years. Thirdly, it
18:05must always earn. Although this isn't
18:07your growth pot, that doesn't mean it
18:09should sit in a dead end account doing
18:11nothing. You want it somewhere that
18:12earns a bit while it waits without any
18:15risk. This is because if you leave it
18:17somewhere with zero interest, then it
18:19will be eaten away by inflation as money
18:21gets less valuable over time. That's
18:23where high-yield savings accounts come
18:25in. As I filmed in this video, you can
18:27get savings accounts with 4 to 5%
18:30interest rates and with no penalties if
18:32you need to dip into it. I'll leave some
18:34banks in the description. I'd recommend
18:36checking out SoFi, Ally, and Marcus by
18:39Goldman Sachs as they're offering decent
18:41rates and they're FDIC insured, so your
18:44money's safe. Step three is to stack it
18:47quickly. Most people think it takes
18:48years to scrape together a decent
18:50stability fund, but if you play it
18:52smart, it doesn't need to take anywhere
18:54near that long. When I was building up
18:56my savings, I used three tactics that
18:59stacked on top of each other. Using them
19:01all together helped me really accelerate
19:03how fast I could save. Tactic one is
19:05called the paycheck sweep. This is when
19:08you take 15% of your income the second
19:11it lands and move it straight into your
19:13emergency fund. You can automate this
19:16with a direct debit or scheduled
19:17transfer, so it's completely hands-off,
19:20just like we did with the 25% that goes
19:23towards growth. Tactic two is the
19:25replacement promise. This is a promise
19:28you make to yourself that if you dip
19:29into your stability fund, you
19:31immediately replace it. Let's say you
19:33knock off your wing mirror and it cost
19:35$250 to fix. That's fine. That's what
19:38the fund is for, but the next time you
19:40get paid, you top that $250 straight
19:43back up like it was never gone. Tactic
19:46three is the save by spending hack. This
19:49one might sound a little bit crazy, but
19:51you can do it by using round up apps.
19:54These round every purchase up to the
19:55nearest dollar and drop the difference
19:57into your savings. So, if you spend
20:00$3.60, it rounds up to $4 and puts that
20:0340 cents away. It sounds small, but it
20:06adds up fast and you won't even notice
20:08it. The other way to do this is with
20:10cash back. So, if you're using a cash
20:12back credit card and paying it off in
20:14full every month, then take those
20:15rewards and put them straight into your
20:17stability fund. Once your stability fund
20:20is fully stocked, you've got two
20:21options. You can over roll that money
20:23into growth or you can shift it into the
20:25final 10%, which we'll talk about later.
20:32The next 50% of your income should be
20:34going towards your essentials. This is
20:37the 50% that feeds you, not your ego.
20:40Surprisingly, over 60% of Americans
20:43earning over $100,000 a year still live
20:47paycheck to paycheck, as most are too
20:49caught up in trying to look rich instead
20:51of actually becoming rich. This shows
20:54that you can be on a great salary and
20:55still feel broke every month, because
20:58it's not about how much you earn, it's
20:59about how much you waste. Let me show
21:02you what I mean. This was me age 20 and
21:05that's my mate. On the surface, he
21:07looked like he had everything. Designer
21:09shirt, expensive watch, was always out
21:12spending. I was the opposite. Baggy top,
21:15cheap watch, just the basics. Sure, my
21:18fashion sense could have been better. I
21:20could have at least picked up some
21:21inexpensive smart clothes, but I was
21:23young, so cut me a piece of slack. But
21:26here's what people didn't see. He had
21:30$43.20
21:32in his account and a few credit card
21:34payments overdue, whereas I had
21:37$1,000 plus quietly sitting in
21:40investments and a decent stability fund.
21:42I'd learned from my experience with my
21:44car loan disaster and I'd worked
21:46extremely hard to build my money back
21:48up, which meant cutting out any
21:50unnecessary spending and looking like
21:52this. Although this might not seem like
21:54a lot, remember money was worth a lot
21:56more back then. This $1,000 was a start
21:59and that's the part most people miss.
22:01Wealth isn't what you see, it's what you
22:03don't see. I get it though. It's easy to
22:06justify the upgrades by saying things
22:08like, "I need a safer car. This new
22:10house is closer to work and I deserve a
22:13nice meal out." But that's exactly how
22:15lifestyle creep starts. So, how can you
22:18keep this under control? Well, step one
22:21is to get clear on your essentials. A
22:24lot of people aren't going to like this
22:25one, because what many people consider
22:27essentials nowadays are actually just
22:30luxuries. Essentials are the things that
22:32keep you alive and functioning. That
22:34means your rent or mortgage, groceries,
22:37utilities, transport, insurance and
22:41clothes. Not the latest designer drops,
22:44just what you absolutely need. Now,
22:46let's talk about what doesn't count.
22:49Takeout isn't essential. Neither is the
22:51Amazon subscription you forgot about,
22:54the gym you haven't visited since
22:56January or the stack of streaming
22:58services you keep meaning to cancel and
23:00the list goes on. If you're using a gym,
23:02that's a different story, but so many
23:04people sign up for stuff they never use.
23:07That's why one of the easiest things you
23:08can do to free up money is to go through
23:11your bank statements and cancel anything
23:13you're not using. Just think to
23:15yourself, if it's not helping you live,
23:17work or stay healthy, it probably
23:19doesn't belong in your 50%. So, why do I
23:22recommend capping it at 50%? Well,
23:24because the average person is already
23:26spending 60 to 70% of their income on
23:30what they think are essentials. So, by
23:32locking in your lifestyle at 50%, it
23:35forces you to actually eliminate what
23:37you don't need. It also changes your
23:39mindset from wanting to spend more of
23:41what you earn to wanting to earn more
23:43and increase your income, which is
23:45always something you should be doing.
23:47Step two is to shrink the two key
23:49categories. So many people talk about
23:51cutting out the little expenses like
23:53Starbucks coffee. Honestly, I'm guilty
23:56of saying this myself. However, if you
23:58want to make the biggest impact, then
24:00you first need to focus on the two key
24:02categories. Let's start
24:04with housing. For most people, this is
24:07the biggest expense, but it doesn't have
24:09to grow with your income. Always
24:11renegotiate
24:13your rent when the lease is up. Most
24:15landlords would rather keep a tenant
24:17than go through the hassle of listing,
24:19cleaning and showing the place again.
24:21Even a small reduction or freeze can
24:24save you thousands. If you want to go
24:26further, think about house
24:29hacking. That could mean renting out a
24:31spare room, splitting a place with mates
24:34or even moving back with your parents
24:36while you build your buffer. If you can
24:37manage to limit housing to half of your
24:39essentials fund, then that's a pretty
24:42good place to be.
24:43Now, let's talk about transport.
24:47Car payments are one of the biggest
24:48wealth killers. People lease brand new
24:51cars for the monthly status hit and end
24:53up paying for years on a depreciating
24:55liability. That's why I always recommend
24:58buying used, reliable cars that have
25:02seen the majority of their depreciation,
25:05at least until your income can support a
25:07nicer car. By that, I don't mean if you
25:09can just about afford it, it should be
25:11under half of your essentials fund. In
25:13walkable or city areas, you could even
25:16consider getting rid of the car
25:18entirely, as it can free up hundreds of
25:21dollars per month. Because it's not just
25:22the car payments you save, but also the
25:25insurance, maintenance and parking
25:27charges. All added up, this can be a big
25:30saving. Once you've got those two areas
25:32under control, that brings me on to
25:35step three. Use rules, not willpower.
25:38When you're tired, stressed or even just
25:41bored, your willpower disappears and
25:43that's exactly why the top 1% don't rely
25:46on it. Instead, they build systems that
25:48make the right choices automatically.
25:50When I was building my wealth, I had a
25:52simple system that kept me on track.
25:54Every time I was tempted to buy
25:56something and wasn't sure if it was
25:58essential, I'd run it through a few key
26:00questions. These questions stopped me
26:02from buying things I didn't need and
26:04helped me stay focused on the bigger
26:06goal. So, firstly, ask yourself,
26:09is this an impulse purchase? If the
26:12answer is no,
26:13then buy it. It's likely something
26:15you've been thinking about for a while
26:17and if it fits into the essential
26:18categories we discussed earlier, then
26:21it's a no-brainer. However, if the
26:23answer is yes, then it's time to use the
26:267-day rule. The trick behind this is
26:28pausing for 7 days before you buy
26:31anything. Then after those 7 days are
26:33up, ask yourself again
26:35if you still want it. Most of the time,
26:38the answer will be no. That's the funny
26:40thing about waiting 7 days. You often
26:42forget all about it, as the excitement
26:44has faded and it wasn't that important
26:47to begin with. But if after 7 days, you
26:49still want it, it's time for the next
26:51question. Are you buying for the brand
26:54or the value? If the answer is the
26:56brand, then don't buy it. You're likely
26:59being drawn in by great marketing. If
27:01it's an essential, then there will be an
27:03unbranded alternative that will do the
27:05job just as well, if not better. This is
27:08where most people mess up. Wealthy
27:11people don't throw money at brands
27:12because they like the marketing. They
27:14really think about the value. So, what
27:16does value really mean? Well, if you buy
27:19a $60 pair of boots and wear them 100
27:21times, that's 60 cents per wear, good
27:24value. But if you buy a $200 pair of
27:26designer trainers and wear them twice,
27:29that's $100 per wear and going too cheap
27:32isn't smart either. I mean, a $5 shirt
27:35that falls apart in the wash is still a
27:36waste of money. So, don't chase brands,
27:39chase quality. So, if you answered
27:41value, that brings us on to the final
27:43question. Will this improve your life?
27:46If the answer is yes, a conscious,
27:49intentional purchase, go ahead. But if
27:52the answer's no, it's probably just
27:53about impressing someone, killing
27:55boredom or chasing a dopamine hit. It's
27:58not worth your money. Once you go
27:59through this process a couple of times,
28:01you'll be able to decide if something's
28:03worth buying or not without even
28:05consciously thinking about the
28:06questions. They just get your mind
28:08working in the right way. Remember, it
28:11isn't about being tight, it's about
28:13being intentional.
28:17The last 10% of your income should go
28:20towards rewards. This is the 10% that
28:22keeps you sane. Let's be honest, money
28:25isn't just about growth, stability and
28:27essentials. You're allowed to enjoy it,
28:29too. Most people skip this entirely and
28:32then wonder why saving feels so
28:34pointless. As I've gotten older, I've
28:36realized it's the little things that
28:37refuel you and remind you why you're
28:39doing all this boring money discipline
28:41stuff in the first place. This is backed
28:44up by the facts. 92% of people say they
28:48overspend after intensive saving
28:50sprints, because saving without joy
28:52starts to feel like a punishment very
28:54quickly and that's exactly why this 10%
28:57exists. Not as an excuse, it's a
29:00strategy. Kind of like having a cheat
29:02meal. It's a thing that makes your whole
29:04financial diet comfortable and most
29:07importantly, sustainable. But to
29:09maximize its impact, you have to be
29:11strategic with how you use it. So, step
29:14one is to make it guilt-free. To make
29:16something guilt-free, you have to see
29:18the value in it. The truth is, you can
29:21spend your 10% on whatever you like.
29:23However, some categories are more
29:25valuable than others, which should make
29:27them more guilt-free. The first category
29:30is vacations, such as trips away or just
29:33weekend getaways. This is valuable
29:36because you're buying memories that last
29:37forever. It's also a great way to
29:40de-stress. When I was building up my
29:42businesses in my younger years, I
29:44completely ignored the importance of
29:46vacations, which led me to becoming very
29:48sick. The doctors diagnosed me with
29:50stress-induced shingles. They
29:52recommended I took a vacation, and
29:54that's when I went on my first ever ski
29:56trip. I had a great time. Since then,
29:59I've made it a priority to take a
30:01vacation every year. Instead of seeing
30:03it as a waste of time or money, I now
30:05see it as an investment in my health
30:07because it helps me stay sharp and more
30:09importantly prevents me from burning out
30:12again. Next is hobbies. This could be
30:15painting, gaming, photography, flying
30:18model aircraft, the list goes on. This
30:20is valuable as it keeps you passionate.
30:23You don't always do what you love for
30:24work, so by doing it in your spare time,
30:27it helps keep your spirits up so you can
30:29work harder for longer. Next
30:32is nights out. Dinner, concerts, and
30:34experiences. This is another thing I
30:36ignored in my early years, and it was a
30:38big mistake as I ended up losing most of
30:41my friends. Having a strong social
30:43network is so important, especially
30:45nowadays. Finally, we have gifts. Now,
30:50I'm not talking about for yourself, but
30:52for your loved ones. This is another one
30:54I overlooked. You can see how most of
30:56the stuff I teach in these videos comes
30:58from me learning from my mistakes. Back
31:00when I was focused on chasing my goals,
31:02building businesses, and growing
31:03investments, I often forgot birthdays
31:06and special occasions. I was so locked
31:08in on the future that I overlooked what
31:10mattered in the present. The truth is, I
31:13never really cared much about receiving
31:15gifts. There's not much I wanted. But,
31:18it wasn't until I married my wife and we
31:20started exchanging anniversary gifts
31:22that I finally understood. Gifts aren't
31:24about the item, they're about the
31:26thought, the connection, and the
31:28relationships they strengthen. Step two
31:31is to preload the fun. I'd recommend
31:33opening a separate bank account and call
31:36it your joy jar. This doesn't have to be
31:38with a new bank. You can actually have
31:40multiple current accounts with the same
31:42bank and have them all appear on your
31:44mobile banking app, which makes things
31:46very simple. Then set up an automatic
31:48transfer of 10% of whatever you make to
31:51be deposited into this account every
31:53single month. So, if you make $2,000,
31:57send 200. If you make 10,000, send
32:001,000. It doesn't matter how much it is,
32:02the percentage is what keeps it
32:04sustainable. Just make sure you don't
32:07cheat. You can't just top the account up
32:09from growth, stability, or essentials
32:11when it gets low. If you hit zero, you
32:14have to wait until next month. When you
32:16know this fun money is limited, you look
32:18to maximize it in the best possible way.
32:21This is exactly how you protect your
32:23goals without feeling like you're
32:24missing out every time your friends
32:26suggest dinner or you pass something in
32:28the shop that you really love. Step
32:30three is to prioritize experiences. If
32:33you don't have a particularly large joy
32:35jar at the moment, please prioritize
32:37experiences above anything else. People
32:40always say to me in the comments, "What
32:42are you saving for? Bro is going to die
32:44with all his money." And I get it. From
32:47the outside, it might look like I'm
32:48depriving myself, but I'm really not. I
32:51just spend differently to most people. I
32:53don't need a garage full of cars or
32:55shelves full of designer gear. That
32:57stuff might look rich, but it doesn't
32:59feel rich to me. My 10% goes on things
33:02I'll actually remember, such as a ski
33:04trip with my wife, a great day out at
33:06Universal Studios with my son, meeting
33:09you guys in New York, and a weekend away
33:11golfing with my mates. So,
33:14there you have it, the complete
33:1625-15-50-10
33:18rule. If you want to know how to make
33:19$10,000 as a student, then I'm going to
33:22leave that video right up there, but
33:23don't click on it just yet. Make sure to
33:26subscribe if you want to grow your
33:27wealth, okay? I'll see you over there.

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