[00:02] It's paying me £30,000 a year or $40,000 a year, question to be asking, "How do I make more money?" And if so, how do I do
[00:14] >> So, if I'm this 24-year-old and I a 25-year-old and I'm ambitious, I want >> Yeah. >> You got to find more income. You got to have more income to do it. If I'm a 25-year-old and I just want to
[00:26] want to invest, you know, whatever. You got to find the right investments. You got to have a system for your money. And then you got to create a plan. money you're going to save. You know how much money you're going to invest. And
[00:39] difference between the person that becomes wealthy and everybody else is wealthy people save and invest their money first. Everybody else, especially in America, I spend all my money. I wonder where all my money went. And
[00:55] then if there's anything left, I'll try to save and maybe invest and hopefully >> I always think it's it's a combination of making more money and also saving making more money piece. I think that everyone is unique in their own way,
[01:07] right? You've probably spent more hours doing some sort of hobby that I have no idea about. You play paddle, for example. I've never played paddle in my life. So, let's say you were Steve Steven from age 20 and you're a really
[01:21] good paddle player. You can start to monetize this type of skill which you more than me. I could take lessons from you. Even if player that you are, I might still be willing to pay you 20, 25 pounds an hour
[01:36] for a lesson, right? Just cuz you're naturally better than I am. And so, I I lean into what makes them unique and where where they've spent a lot of their something that they're good at inherently. Figuring out what skills you
[01:51] monetize those. >> For me, it's all around based around vision of your future self? >> Mhm. living? Because that is what we do. It's one of the sources of unhappiness is if
[02:04] your current state is not moving on the path of where your future self wants to >> So, practically and tactically, how do they do that? How do they create this they need to know certain numbers? Do they Should they get clear on if they
[02:18] want to be on a private jet or easyJet? >> Man, I think I think you know if want to fly in Spirit Airlines or do I want to fly in a private jet?" I think >> But is it important to be explicitly clear with yourself? Because actually,
[02:33] if I think of most of my life, I I wasn't entirely clear, and so you either because more and more >> It's generally not a materialistic >> Yeah. >> And that's why it's hard to to pinpoint
[02:46] exactly what it is, but you need to position yourself in that future self and say, "What does it feel like? Do I feel secure? Do I feel this? Do I feel that?" So, it's it's an emotional thing and not a
[02:58] >> Is Is that central to a lot of this? You talked about emotional talked about emotional elements. Is being okay with >> Yeah, that's the other thing. It's social pressure, right? So, you may have
[03:12] the vision of yourself, and you just say, "I want the the three-bed house, and your barbecue." And that's great. And around you, people are like, "You >> So, they're questioning your own sense of happiness.
[03:26] And society does that at scale. And then even the whole media complex is about kind of how unhappy and how miserable you are and should be, doesn't >> We're talking about emotional and psychological barriers here. How do we
[03:40] what other people will think, but so many people are scared of their own money? When you look at the stats around avoidance, 82% of Americans admit they avoid thinking about their own finances, and one in four Americans have avoided
[03:53] medical care because they're afraid of the the bill and thinking about how much it might cost. For Gen Z's, 67% of Gen Z and 58% of millennials say they avoid checking their own bank account because it's too stressful.
[04:06] Which is compared to only 30% of boomers. And on in terms of mental health, money is the number one source of stress for Americans topping work, family, and health. 36% of people with debt experience
[04:18] 36% of people with debt experience clinical anxiety and 23% depression. So, >> A lot of people avoid it because >> Yeah. >> You need to go to a professional for
[04:31] >> Mhm. >> It's intimidating. You don't feel like let them down, yourself down, your family down. So, there's this whole kind It's the confidence that you can learn because a lot of people say, "No, no,
[04:45] no, unless you're from an investment bank or you're an RAA or something, you >> I think you need to start with the mindset. You have to build the basics. debt. You got to save a little bit of money.
[04:57] because investing is all about taking the extra money that you have, throwing it somewhere to grow that money. And this is where I'll be talking about. Because there's a lot of ways to invest. At the very
[05:10] simplest is I can be completely hands-off. I can work with a financial advisor. I can give them my money and they can do everything for me. If you going to get a very good advisor. But there's a con and a cost to a financial
[05:23] you have to pay because they're going to charge a fee. So, if I financial advisor, the market. They get 11% a year. But I have to pay 1 1/2% a year.
[05:39] million after paying $600,000 to my advisor. completely passive investor. It's a little bit more involved than an advisor, but I can just put my money into
[05:52] the stock market, something like the S&P 500, which is the stock market. It's kind of like investing your money into the United States economy. This has historically averaged 10% a
[06:05] year. Which means if I invest $1,000 a month for 30 years, I will have about $1.9 million. A little bit more work than completely hands-off, but still pretty passive.
[06:18] Then we have the people that want to be more involved. What we call is a active investor. An active investor is somebody who now wants to invest their money themselves. And I don't mean trading. I mean
[06:33] actually investing their money. And now I'm going to be doing the research to Maybe it's real estate that I want to own. Maybe I want to invest in individual companies. So it's more risk for more potential return. A small edge
[06:48] can give you outsize return. Because if now I don't get a 10% return, I can get a 13% return. Which you know, we're not talking about 200 or 50% returns. A 13% annual return means that my $1,000
[07:02] a month for 30 years is now going to grow to 3 and 1/2 million dollars. So about $1.6 million more than before just with a slight edge. And you got to >> On this point of being an active investor and picking
[07:17] one, the data shows that passive investors who invest in the S&P 500 like stock pickers. Over a 20-year period more than 90% of actively managed investors, so talking about funds there,
[07:30] underperformed the S&P 500 after fees. So should people be actively investing S&P 500 and be patient? >> I say most people should not be active
[07:42] investors. In fact, I say 98% of America should not be active investors. Just be a passive investor because if you don't want to put in the work, if and the effort to research, you're probably going to lose.
[07:56] investors? If they're if the probability is stacked returns if you're willing to put in the work, you can get better returns. And it are doing it. >> Is there an element of fun and and
[08:12] >> Absolutely. >> People like sports betting and >> That's the problem. Because the fun is I like researching versus oh, I want to see my money go up tomorrow. If I bought a house tomorrow morning,
[08:26] Am I going to check it in the evening what's my house price? No, because you own for the long term. Well, when I go into the stock market because it's so liquid, I buy a stock in
[08:38] checking it in the bathroom, checking it in the evening. And I'm getting anxiety cuz if it's going up or going down, I'm I'm a very emotional. And that's that emotional control as an investor which is just as
[08:51] >> I see a fundamentally different all of this stuff is people are so screwed. massive debts. We looked at the stat earlier
[09:04] the fact that the percentage of 30-year-olds who have a mortgage and a and a and a married has gone from 52% in 1950 to 12%.
[09:18] So, if you look at the average millennial in the US and a Gen Z, they job, right? They have some sort of savings. But, they're taking massive amounts of risk. A lot of us would look at them and
[09:32] in their between buying getting the deposit on the house, getting into a house, realizing that future vision of themselves, however reasonable that is.
[09:44] >> It's so far away because the ass the cost of assets has gone up so much versus their incomes that don't go up. >> You mean the cost of buying like a house >> Yes, or even however much percentage share of the stock market the average
[09:58] That you're you're getting less for your money. So your future self is automatically going to be poorer because of it cuz you could buy less of a house etc. >> Explain that to me like I'm an idiot.
[10:10] Like I'm a like I'm in 10 years old. And maybe in the context of this mug here. In terms of the how why is that worth less now based on what you said? >> The way of explaining it
[10:24] money is the medium of exchange, the thing that you buy something with. we've all got a stack of cash on this table, and you want to sell that mug, we can pay anything for that mug cuz we've got
[10:38] >> Mhm. >> So that mug suddenly is worth not the $10 it's supposed to be worth, it's suddenly we're paying $150 for the mug. Why? Because that money has no value to us cuz we've got excess money. So when
[10:52] it's the this debasement of currency, it's an optical illusion that the value not, the value of your money's going down. And this is this pain point because your earnings
[11:06] only grow with economic growth generally, plus your progression of your career or whatever it may be. But those things, the scarce assets, are optically by the amount they're lowering the thing. So what you find is
[11:21] the thing. So what you find is salaries go up at about 2 or 3% a year. And the house of and the cost of the S&P is about 12%, 13% up every year, and a about the same. >> And that's because they're printing more
[11:36] >> Okay, that makes perfect sense to me. So, I'm imagining you will have a big you're using to take some notes on. And if if I was saying I'm going to sell you guys this mug for some of the paper you have there, but then my team said you
[11:51] guys can have unlimited paper, this mug loses value because you can all just offer a gazillion sheets [clears throat] of paper for this mug. give you a gazillion for it as opposed to
[12:04] you know, three six sheets of paper cuz we've got so much paper. It matters not. this mug is worth a gazillion sheets of paper, but actually the >> Correct. >> Okay, got you. I wanted to get your
[12:17] guy to ask about this. I think you've misunderstood who I am." >> Hi mate, I hope you're well. I got myself in a bit of trouble with some About 40,000 lb. So, more than a bit of trouble. I'm
[12:31] direction in terms of maybe passive income {slash} an avenue to try and work my way out of it. Is there some material I should be reading, watching I said, "What kind of debt is it?" And he said, "Personal loans and credit
[12:46] Um and I said like how I need to ascertain how urgent those debts are and issues. And he said, "Well, they're not super urgent, but as a result of the high monthly outgoings, I'm a month behind my mortgage payment this month.
[13:02] So, it like is, but it's not because I don't want to keep being in that circa $1,000 800 lb a month in repayments at the moment, and I can't get a consolidation loan. It's a perfect storm
[13:16] starting because I've just started a new job, and my partner is on maternity leave, and I have this debt mountain. It's starting to affect my family if I can't pay the mortgage, you know? So, I've got to change moving forward
[13:30] and figure out what to do. And you're the man to ask >> [laughter] >> And then he messaged me again man. If you're busy, just wanted to nudge this." Then messaged again an hour
[13:43] direction, man. I'm quickly running out of places to turn." similar or the same situation ultimately wants Bankruptcy is one option, but at the end of the day
[13:57] there has to be change. And that change is difficult. And that's the part that I think a lot of people have hard time talking about or comprehending. There is severe extreme and quick sacrifice. What do I
[14:12] Number one, you got to cut back your expenses as fast as possible in that situation. You have to sell as much stuff as possible. I mean, bankruptcy obviously works, but you also lose your house. You also lose other
[14:26] emotional toll with it. You have a family, you have a kid. end up getting a divorce. So, it can also impact a life in many different ways. So, you have to make extreme
[14:38] Netflix subscription. Not because it's just costing you $15 a month, but because the average American is spending Netflix. And if you're in that type of situation and you're spending 2 hours
[14:51] is on Netflix, how do you sleep at night? You shouldn't be getting up, go and try to get some more money. I don't care if it's Uber. I McDonald's. Find some extra money and learn how you
[15:04] can earn some more money. And I mean, it sounds harsh, but the reality is if you want extreme change, it's not going to happen without extreme change. money management, I avoided using a credit card because I thought that
[15:17] credit cards are bad and evil. And then when I realized that I knew how to spend my money and I wasn't going to spend money I didn't have for credit card could earn more cash back, I could earn more perks and points for doing nothing
[15:30] except making the transactions that I would normally make anyways with a that's why I partnered with my sponsor of some of my favorite credit cards. Now, here's the caveat. If you don't
[15:43] a credit card. But if you're comfortable using a credit card, in this article with my sponsor FinanceBuzz, I go over some of my top credit cards based off of credit card debt and you want to pay it off faster, I go over some of the top 0%
[15:57] APR credit cards. This will give you an opportunity to attack that credit card debt faster while not accruing any interest during the 0% APR period. I go over some of my favorite cash back credit cards that we can earn more
[16:10] your normal transactions. I go over some of my favorite travel cards for those of you that are traveling more often and earning more income. And then I go over cards as well. So, if you know how to manage your money and you're comfortable
[16:23] using a credit card, you can see some of my top credit cards right now in the the description. >> What about pensions? >> Retirement. So, in the UK we call it a pension. I think you guys call it a
[16:35] But over across the world it's pretty much the same, across the Western world anyway. If I'm 25 or 30 or whatever, should I should I be paying in to my pension as a way to generate
[16:48] Is that a smart idea? >> I don't have a 401k. I don't have an IRA. But the reason why people like these accounts and why they are tax deferred accounts. Meaning I can put
[17:02] my money in whether I pay taxes now or later. The money will then sit there, grow, and I don't pay taxes until I pull my money out.
[17:15] But there's a couple problems. Problem number one is I have very little control over where my money can be invested. Maybe this will change. Uh the Trump administration has passed a new executive order on 401(k)s
[17:27] invest in 401(k)s, but that hasn't happened yet. You have very limited options. They're primarily just mutual funds, and many of them have a fee. I think NerdWallet said 92% of Americans don't know what the 401(k) fees are. So,
[17:40] if you don't have know what your 401(k) fee is, this is your uh notice to go should know that. So, you have very limited options. means somebody on Wall Street is going to be paid
[17:52] forever until you retire. Number two, I can't touch this money until I'm 60 years old, 59 and a half. If I do, I have to pay a 10% penalty. And number three, the whole discussion is you're doing this for tax benefits.
[18:06] earlier, there's a lot of tax benefits that you can get outside of a 401(k), which is why for me, I don't like it. But I'm not everybody. For some people, employer might say, "We're going to give you a
[18:20] 3% match." So, if you invest, let's just say a $3,000 into your 401(k), and and they match it 100%. They might also just throw $3,000 into your 401(k), but you along the way. >> I don't think most people even know what
[18:35] pay into it, but we don't really know what's working. And I saw this really interesting debate take place on X the other day where someone was a guy was saying in the UK, "I've paid into my pension my whole life,
[18:49] pension my whole life, um so I deserve it, and it'll be there underneath it was telling him that by the way, it's not like some piggy bank that you get to break open. The money you paid into a pension was used to pay
[19:02] when you were working. >> So, you're talking about Social Security in the United States. Because as an employee in the United you have to pay into Social Security. So,
[19:15] 6.2% of your income. So, you you have a lot of taxes. You're going to make, and then you have Social Security tax. So, on your income, you're going to pay 6.2% of that separately from your income
[19:28] tax, but 6.2% into the Social Security fund, and then your employer is also going to pay 6.2% into this fund. >> This money, in theory, is supposed to grow and compound that when you retire, you have this retirement fund that's
[19:42] don't get to choose. I mean, you can choose when you pull it out, but you >> Yeah. >> This is what is running out of money in the United States today. Why? Because people that are in their 20s, 30s, and
[19:56] 40s that are paying into it today, it's not paying for their retirement, it's today to pay for their Social Security They think they're paying into a piggy bank that they get to crack open, and
[20:10] live for the rest of their life. I was looking at the biggest misconceptions around pensions, and the first one was that my pension is guaranteed money for the entirety of my life once I retire.
[20:22] >> Well, there is some truth to that. The part in the United States, at least, you are guaranteed what what the what the wording is that you're going to get the Social Security until you pass away. But, the part that they never tell you,
[20:36] this, either, is how much that value of the check will be. People are paying into the Social Security fund thinking that they're retirement. Every financial advisor historically has said that retirement is
[20:51] a three-legged stool. You have your 401k, your your personal retirement, you have your own personal savings, and then you have Social Security. Well, you pay you don't get to opt out of it unless you are an investor, you don't have to
[21:06] pay your social security income or social security taxes on your investment income, but you pay into this until you hit retirement age and then you get to Well, the government is running out of social security money, but people
[21:21] that means the government's no longer going to pay social security." That's not true. They'll still pay it, but they'll just print their way to pay about. So, great. They they're giving you a bigger check. The problem with
[21:35] that bigger check is that bigger check can't buy you as much stuff. based off what the United States government says, assuming that they don't default, you're going to get the social security check.
[21:47] It's just not going to be able to buy you as much as you thought before. people think their employer is putting enough in to cover their full a savings account. They think they can access it whenever they like. Um
[22:00] the government will cover them when it runs out. And I don't need to think pension pot is tax-free. >> So, the big shift that happened around 20 years ago was a shift from what's known as defined
[22:14] benefit to defined contribution. Ford or American Airlines or whatever company. You retired, you got 60% of your final
[22:27] >> Ah. >> That was bankrupting all of these because people were living longer, all the other stuff. defined contribution. Basically, you get
[22:40] plus the investment returns. But, there's fees. manager. Maybe you didn't know when they said, "Well, do you want to put it in "Bonds." Then it didn't grow as much or whatever it was.
[22:53] And in the end, you're just not sure that you're the average 401k in the United States for a baby boomer, I believe is about $100,000. >> Yeah. >> I think it's right now around 200,000.
[23:09] 200 is not enough to retire. That's 10 years of 20 grand a year. >> So, there's so little money in the US pension system particularly, um that there is no hope for these people. I had this whole video on this
[23:22] called the retirement crisis. It became a huge kind of viral success years ago this for the pensioners, the boomers, going to have to change within this to to figure this stuff out.
[23:36] >> I think you said it earlier today. You were talking about a Ponzi scheme. Here you have one. But nobody wants to say that, but everyone is paying in to keep funding this thing, but the only way it's
[23:49] money coming in >> because talked about at the beginning, the demographics? >> There's less and less young people because we're having less babies.
[24:02] So, and this keeps going in perpetuity because we're having babies, so that's workers in 20 years time. The babies now workers in 20 years time. We can forward project this. It doesn't stop. So, how
[24:14] the hell are we going to pay for this massive amount of baby boomers, of which million of them, a largest cohort in history at the time. >> And this is where the proposals are to tax your Bitcoin.
[24:29] The value of your Bitcoin or tax the value of your assets or tax your >> But the UK's got the same. This whole wealth Everybody's got the same problem. retirement crisis? >> I think that So, I have a different take
[24:42] Jess Breathes and Roe, you guys were talk and you were talking about social security, right? But I I have a different take on I think 401(k)s [clears throat] are good for the average person because
[24:56] of people wouldn't contribute to a retirement account unless they the employer offered it, right? And so the the whole match thing is a great thing for behavioral behavioral finance. It's like okay, if I
[25:09] my employer, and at least I'm saving some money instead of nothing. >> A 401k for anyone that doesn't understand is you agree to invest in a investment pool alongside your employer. It is more like
[25:25] It is more like >> an individual retirement account that is awarded to you because you work for an employer. You have the option to invest within a 401k, and that 401k is typically tax deferred.
[25:38] later in life. >> the difference between that and a social >> A social security is a government program where you are required to pay into it every paycheck. That goes into this big pot, and then when you do
[25:52] retire, the government will send you a social security check every month. >> But I I still think that there are plenty of ways to retire and retire with some sort of freedom, retire early. Have you heard of Coast FIRE before? Coast
[26:07] FIRE is another newer thing that's uh that's kind of on Reddit, but it's a variation of financial independence retire early. And it's essentially you get your nest egg to a point where you don't have to
[26:19] invest any dollar into it after that, but because you get it to let's say a usually pretty reasonable. The investment returns, if you're investing in the S&P 500, will get you to a full retirement by the time you are
[26:33] able to retire at 65. So it doesn't mean you retire early completely, but it means that if you get to your Coast FIRE number, which is what it's called, maybe you're working on. So like maybe you don't have to work for the employer that
[26:46] something that's a little bit more suited to your lifestyle. You're still working, but you're not working to save for retirement anymore because you hit that Coast FIRE number. So, for example, at the age of 35,
[26:59] $150,000. If you can hit 150k by 35, if you have 30 years of investment returns at 8%, you'll have $1.5 million by the time you palatable for people that are having a hard time wrapping their heads around,
[27:14] "Am I ever going to retire?" They're not going to retire in that they're not going to be kicking up their feet on the sand beaches of Aruba, but something. And I I personally think if I was retired, I'd be so bored out of my
[27:27] to work on something. The idea is you just don't have to work for maybe the job you hate or something like that. >> So, if I hit the $150,000 in savings, >> 8% return. >> 8% return, by the age of 65, I'll have
[27:41] >> 1.509, yeah. >> What's that worth then? >> That's true. There that's it that is another part of the equation is with >> And is this what you're trying to do? Cuz I remember an hour ago you said,
[27:54] words to that effect. >> Yeah, I mean, I'd like to be Coast FIRE. And uh Coast FIRE is, you know, however you would like to define it, but, you I I'm pretty close or if not, I've already reached it, which is like I get
[28:07] to work on the things that I love, and I I think that my retirement nest egg will eventually grow to a point where by the time I hit 60, 65, I'll be able to coast and chill. >> did you create a number, do the math on
[28:20] >> Okay. >> Yeah, so you can project out your expenses of what you think your expenses are going to be on an annual basis, and >> Okay. >> Yeah.
[28:33] have to do it. >> Do it on ChatGPT or something like that. >> Retirement crisis. Mhm, that's concerning.
[28:46] the Coast FIRE thing. My approach is let's stay disciplined, consistent with get to a place where retirement might be possible. the same as when I started with the manifesting your your destiny. You say,
[29:01] it?" We do this and grow up our investments, right? So, it's brilliant to do that. And then you can take more risk. If you isolate that and say, "Well, any capital I build now, I can do whatever I want."
[29:13] with the home. It's exactly It's like I've de-risked my life. Now I can take risk, and that's a really nice thing to do. saying, "Well, my future self wants this."
[29:26] now, and then it should take care of that." Now, it's There's always There's whatever you want with, right? What do you think the biggest money mistake the >> They spend all their money. The The two S's. You You're spending all your money,
[29:41] saving all of your money. >> Both of them are mistakes. >> So, just having your money sat in a bank account doing nothing, >> you're becoming poorer every single day. >> I don't think most people know this.
[29:53] I've got a friend who's steadily compounded his his bank balance over time. And I remember asking him, I said, "How much money do you now have in slow approach over time. He runs a business as a freelancer. And he goes,
[30:06] dollars." I was like, "It's just sat in your bank account." He was like, "Yeah." Like he's scared he doesn't know what to do with it. So, he thinks just putting it in bank account is the safest possible thing to do.
[30:18] >> Well, it's a guaranteed loss. Uh if your if your bank account The States today, not the high-yield accounts, but the average account is 0.1% 0.5% I don't know. Something something
[30:30] super low. If we just say inflation is 3%, meaning the cost you have to spend out of the bank account to buy something is going up by 3%, and that's the reported numbers, not the the real inflation that
[30:43] many people feel. Well, that means there's a net loss of 2 and 1/2% on there, that's $25,000 of lost buying power. >> In our economic system, you can't become wealthy by working a job. It doesn't
[30:57] matter if you are a teacher, a truck driver, a doctor, or an executive. The way you become wealthy is by owning the right assets. That way now you can get if you stop working at your job, the money stops coming in, but you've still
[31:10] money stops coming in, but you've still got bills to pay.