Take Control of YOUR MONEY | 5 Ways to Supercharge Your Finances

You know there are a lot of subjects that
I would love to be able to cover on this channel. So many little things and neat ideas that
can go into creating a wildly successful personal Financial picture for ourselves and others. But I’m just one man and I’m not always able
to get to as many of those concepts as I would like as quickly as I would like. So in the spirit of just tackling a bunch
of ideas all in one go today, I’m going to be talking about five different things you
can do to supercharge your finances. Hey everyone Daniel here and welcome to Next
Level Life a channel where you can learn about Investing, debt, retirement, and many other
general financial education videos because the school’s aren’t going to do it for us. So if any of those topics sound interesting
to you or if you want to learn how to better handle your money and have more financial
freedom be sure to hit that subscribe button and the bell next to my name to be notified
every time I upload a video. And if you want to further support the growth
of this channel you can check out some of the links I’ve left down in the description
below which includes a 30-day free trial of Audible and 2 free audiobooks of your choice
as well as a list of some books on money I’d recommend checking out with your free trial,
or you can share this video with a friend, and leave a comment below letting me know
what topics you’d like me to cover in future videos. In the interest of keeping this video under
20 minutes, I won’t be going as in-depth as I normally do to any one of these ideas today,
although I will be covering many them in future videos in more depth if I haven’t already
by the time this video is released. So I encourage you to use this video as kind
of a jumping-off point for yourself. If any of the ideas that come up today intrigue
you, definitely look into them more, talk to your financial advisor about them, research
other people’s perspectives on the subject, and figure out how to best apply them to your
situation. With that out of the way let’s get started. So the first thing you can do to supercharge
your finances is to, if you haven’t already, set up a zero-based budget also sometimes
known as a zero-sum budget. Most of you are probably already familiar
with this and I know a lot of you who follow Dave Ramsey as well as this channel know exactly
what this is because it’s the budget he recommends, but for those not in the know real quick a
zero-based budget is a budget where every dollar you bring in gets accounted for whether
through expenses, investments, giving, or some other means, it doesn’t matter, every
dollar has a job before the month even begins. If you don’t know how to set this budget up
there are tons of budget templates out there you can use, just Google “zero-sum budget
template” and you’ll get a bunch of them that come up or you can try out one of the apps
that use this method of budgeting, of course, Dave Ramsey’s app every dollar being one of
those but there are others that you may find you like better. The reason why this is so important, and the
reason why I recommend everybody does this budget at least once, is because unlike some
of the other budgeting methods that I’ve covered on this channel and will cover on this channel
the zero-based budget is very, very good at helping you to figure out not only where you’re
overspending but also finding areas where you didn’t even know you were spending money
in the first place. This is because since every dollar has a job,
there’s no wiggle room there’s no mystery in the budget. If you have too much month at the end of the
money it’s either because you overspent in some other category, you didn’t earn as much
as you were thinking you would, or you simply spent money in a category that you didn’t
think of before the month began, when you were initially setting up the budget. If that’s the case then it forces you to go
back and look at your expenses in-depth to see what those unaccounted for expenses were
and forces you to think of whether or not those expenses were actually needed. Finding these for lack of a better phrase
“phantom expenses” can be a huge money-saver for a lot of people especially if you’ve never
done a budget like this before. On the other hand, if you overspent in some
category then it forces you to look deeper into that category and figure out whether
or not you can cut that expense down a bit. Ideally, this leads you to thinking about
your priorities and what you really value spending money on which ultimately is what
a budget is trying to teach you as I’ve covered in previous videos. Sometimes you’ll say to yourself “yes I do
need this expense and it does need to be this high,” and if that’s the case then, that’s
fine, you simply adjust your budget in other categories to make sure that you’re still
able to make ends meet and reach your goals. Other times you’ll find that there are ways
to cut that expense down a little or maybe even a lot and still maintain the standard
of life that’s important to you which can also be a huge money-saver especially if the
issue has been found on big line items like housing, transportation, or debt. One thing I would like to add to this though
is that cutting down on an expense doesn’t necessarily have to mean spending less on
something. This is particularly true with housing. Many people have taken advantage of various
rent hacking techniques, which I will be covering more in depth in future videos, in order to
lower their effective housing costs. Rent hacking can take on many forms but the
idea is that you lower your effective housing costs by either splitting the bills somehow,
say by living with a roommate either by design or by subletting, or by using your living
space to generate an income like people who put their homes up for rent on places like
Airbnb. They can then put that money towards their
housing costs instead of having to pay for it entirely out of their salaries. Like I said I’ll be covering this topic
more in-depth in future videos but that’s the gist of the idea. A second thing you can do to supercharge your
finances is taking full advantage of tax-sheltered Investments. This is quite an obvious one I know but that
doesn’t make it any less relevant or important. According to the Bureau of labor statistics,
the average household income before taxes in 2017 (which is the most recent year we
have that’s finalized as of this writing) is about $73,500 per year. That would either put someone in the 12% or
22% tax brackets depending on whether they’re single, head of household, or married filing
jointly. With the contribution limits of the 401K and
ira being $19,000 per year and $6,000 per year for the individual respectively there
are potentially thousands of dollars in taxes to be saved. And that’s not even to mention other tax-advantaged
accounts like HSAs, ESAs, and 529 Plans that may or may not be relevant to someone’s
situation. But those accounts are for future videos I’m
just going to focus on the IRA and 401K today since they are pretty universally applicable. Let’s say for instance a married couple making
that $73,500 a year maxed out one 401k and one IRA each year. In doing so, they would be lowering their
tax bill by $25,000 and saving roughly $3,000 on their federal income taxes. That’s a savings of $250 a month on taxes
alone not to mention the fact that the investments they made will be growing tax-deferred. Or they could go the other way and invest
in a Roth IRA or a Roth 401k if they had that option pay the taxes now and then save on
taxes down the road. Now we
don’t know what those savings will be because we don’t know what the tax brackets will be
when they retire and decide to take the money out but there will be savings. Or they can even mix and match the two by
putting the money into a traditional IRA or 401K now and then take advantage of the Roth
conversion ladder down the road. Whatever the case may be the point is that’s
a decent chunk of savings each year and since the savings is through the act of investing
over time, thanks to compound interest it can have an enormous effect on your financial
picture. At $25,000 a year and an average 8% annualized
rate of return over the long haul they would have over $1,000,000 saved in just 19 years,
over $2,000,000 saved in 26 years, and over $6.75 million saved in 40 years. The third way that you can supercharge your
finances is through education. And I’m not talking about education in the
“go to college and get a degree” sense, that certainly can help if you’re getting a good
degree that will get you a good paying job. It is certainly one way to go but that’s not
what I’m talking about here. I’m talking about seeking out knowledge that
you will be able to apply to your life and your specific financial situation, ideally
in the here and now. My favorite way to do this is through books
which is why in every single video on talking about Amazon’s Audible service. Because seriously I can’t stress this enough
none of us… none of us are born with the know-how to be financially successful. Some of us may have great mentors growing
up and I was very fortunate myself to have a dad that did start studying finances and
passing that knowledge on to me at a young age, but even with that, had I not gone out
and searched for other knowledge, insight and different ideas for myself that either
he didn’t know about or that maybe he knew about but was never able to explain to me
in a way that I got it, I wouldn’t be where I am today. I would almost certainly be more well-off
than the paycheck to paycheck life that a lot of people are unfortunately living because
my dad did give me that strong foundation but I wouldn’t have been as far along as I
am today. So again I can’t stress it enough seek out
as much as you possibly can whether that’s in the form of blogs, podcasts, and videos,
or books and audiobooks, or even seminars at your local library, whatever works best
for you, just find something so that you can get those insights, get those ideas, and apply
them to your life. Listening and learning from others is so important. And there’s a great quote that sums it all
up better than I could. It’s from Woodrow Wilson and he said, “I not
only use all the brains I have but all that I can borrow.” Be like that. Learn from others, it’ll not only get you
much further on your journey much faster than you could on your own, but it’ll probably
save you from making a few crucial mistakes along the way as well. A fourth thing that you can do to supercharge
your finances is to start a side hustle. And your side hustle doesn’t have to be big
or extravagant or cost a lot of money either. Realistically speaking, it doesn’t even have
to make a ton of money to be a huge difference maker in your life. Even taking home something like $500 a month
can still make an astounding difference in your life, even if it probably wouldn’t be
quite enough for you to quit your day job. Say you applied that to a mortgage loan. Maybe you recently bought a house and you
have a 30-year mortgage loan of $200,000 at 4% interest, that $500 a month would nearly
cut your time to paying off that mortgage nearly in half! From 30 years all the way down to 15 years
and 5 months. And it would save you over $75,000 in interest. That’s an average of over $400 a month in
savings over the course of that time which is not half bad considering it came from just
a $500 a month side-hustle income. Or maybe you don’t have much any debt to speak
of or just decided you wanted to go the investing route. $500 a month is $6,000 a year. That on its own is enough to fully fund a
Roth IRA. Roth IRAs, of course, grow tax-free. If we assume an 8% average annual rate of
return over the long haul your ROTH IRA would grow to over $100,000 in just 11 years, over
a quarter million dollars in 19 years, half a million dollars in 26 years, and over a
million dollars in 35 years, all available to you tax free! One way or the other that’s quite a big difference
if you ask me! A fifth way that you can supercharge your
finances is a little unconventional and it’s to figure out some dreamlines for yourself. So much of the time when we’ve tried to budget
and save money or invest we end up falling off the wagon pretty quickly. No matter how charged up on adrenaline and
motivated we get after reading a book on money, watching a video, or listening to a personal
finance expert talk about how to change our financial lives it never ends up panning out
the way we hoped. Maybe it’s because we feel we’re not making
very much progress or because the market tanks and we panic or we have some unexpected medical
bills come up or whatever the case may be. And when we hit these roadblocks it can be
very discouraging, sometimes so much so that we stop trying to change our financial lives
for the better entirely… but why? How could we go from being so motivated to
change our financial lives to giving up so quickly? Even with something like those unexpected
medical bills… yes, it sucks, it really sucks and can set us back quite a ways, and
yet there are some people who manage to get through those roadblocks and achieve financial
independence. So what are we missing? What do they have that we don’t? Well, it could be different depending on your
situation but I think for a lot of us what we’re really missing in those times is our
reason to change our financial lives. Not just a reason, but our reason. What were missing is what Tim Ferriss calls
our dreamline in his book “The 4-Hour Work Week.” A dreamline is anything that you either want
to have, want to be, or want to do by a specific point in time and it’s unique to all of
us. So how do we find our dreamlines? Ferriss recommends creating two timelines
one for six months and the other for twelve months. On each, list up to five things you dream
of having (including, but not limited to, material wants: like a house, car, or clothing),
being (be a great cook, be fluent in Chinese, be a blogger), and doing (visiting Thailand,
tracing your roots overseas, racing ostriches), in that order. Don’t worry about how what you write down
will be accomplished. That can all be figured out later with research
and proper planning, much of which can be found on this channel and others like it. For now, just focus on the dreamlines and
trust the process. If you’re having trouble coming up with
ideas ask yourself: What would you do, day-to-day, if you had $100 million in the bank? If you’re still having trouble, fill in the
five “doing” spots with the following: 1 place to visit
1 thing to do before you die (a memory of a lifetime)
1 thing to do daily 1 thing to do weekly
1 thing you’ve always wanted to learn. Figuring out these “doing” examples may
help you decide what you might want to have and what you might want to be. The benefit of thinking about dreamlines in
this specific detail is that it forces you to figure out what things you really want
to have (which will help you better prioritize and allocate funds in your budgets), as well
as what you really want to do and be, in addition to getting you very excited about the possibilities. More than that if you’re able to get a taste
of one of your dream lines even if it is on a smaller scale you can really help keep yourself
motivated to continue making and saving money as you run towards your goals even during
the tough times. If done right, you’ll naturally find yourself
researching different ways to live your dream lines in as affordable a manner as possible. More often than not, you’ll find that when
you’re actively looking for ways to make your dream a reality when you’re open to
all the possibilities out there to help you achieve your goals, it usually ends up costing
less than you would’ve thought going in. So if you haven’t tried it already that would
be a good way to supercharge your finances… probably for a long time to come. So come up with your dreamlines and try to
find a way to test one or two of them out if at all possible. Sometimes you may find that that dreamline
wasn’t what you expected it to be and that’s okay you can take it off your list, but eventually,
you’ll stumble onto something that is so awesome that you will run through walls to do it again
and again and again. And with that kind of sustained motivation
and desire, I promise you, you’ll find it a lot more possible to become financially
successful and have a really enjoyable life. It is truly a night and day difference from
the place where most of us are approaching finances right now. But that’ll do it for me today once again
if you enjoyed this video be sure to subscribe and hit that Bell next to my name so that
you’ll be notified of all my future uploads. I generally upload every single Monday, and
if you have a friend that would be interested in this kind of content be sure to share it
with them and let’s really get this information out there and start our own Financial revolution.

25 thoughts on “Take Control of YOUR MONEY | 5 Ways to Supercharge Your Finances

  • Thank you, Daniel! I love to screen shot some of your content so I have the information in really simple images that help me remember different things I want to look into later/research further. Love your channel so much!

  • My dream line of building generational wealth is one of the main ways I stay motivated when roadblocks come my way.

    Great video as always

  • Thumbs down simply because there's way too many commercial interruptions! Very annoying when I have to keep grabbing my phone and pressing skip.

  • you're so inspirational honestly watching your video is just the quickest way to understand different principles and think about things in a different way! thank you!

  • Hello! I want to thank you for your videos! I think your channel is great and I have learned a lot from your videos. I have two questions for you, and I apologize because they aren't directly related to this video. I couldn't remember the video that the first one applies to.
    1. You said that you take no longer than 5-10(not sure if that's correct) minutes to vet whether there's demand for a video. How do you determine this? I'd like to do the same with a future channel and this would be really helpful for me to do. Any help is greatly appreciated.
    2. What video animation program/software to use? Again, I'd like to develop a channel in the future and have been looking into Powtoon but am not sure what else is out there.

    Thank you so much for your help!

  • It's tax deferral NOT tax savings when it comes to retirement schemes AND it assumes you will be POOR when you take this retirement money out!!!!!!

  • This channel is good and valuable, but for me to encounter 4 mid video ads in a video shorter than 20min….I mean, that's NFL level bad. It makes me far prefer other channels with similar value and no mid video ads. Constructive criticism. I know you need and want the money, but for myself personally, an ad every 3 minutes is inconveniencing, annoying, and disrupts the flow of my thoughts while I am trying to absorb valuable knowledge. If my professor is paused constantly to show me an ad, I would definitely learn a lot less in a class, retain less information, and be far more distracted. The same principle is applying here. Again just some constructive criticism

  • Daniel (forgive me if I spelled that wrong)…I am a long time viewer…Should we budget in a forecasting manner or learn from the previous budget(s) to mend our ways?

  • Thank you so much for producing these videos! You help inspire my wife and I to think differently and learn more! Please keep it up!!

Leave a Reply

Your email address will not be published. Required fields are marked *