Bad Financial Advice - You Have To Stop Doing THIS:
So, there are a lot of financial planners and financial guru out there, who tell you to do this this one thing. They say if you do this one thing you can retire rich and you know what they're dead wrong. So, today we're going to talk about what this one thing is. Why it is really bad financial advice? And what to do instead. So, let's get started. So, what is through the one thing that most financial planners and gurus are are telling you, that I think is really really bad financial advice. Here's what it is. They tell you to have a budget. They tell you to focus on your expenses. They tell you to cut costs. Don't spend too much money at Starbucks. Save some money. Make sure that you are living below your means. And here is why I believe that this is really bad advice. Now, don't get me wrong. Living below your means, not getting into consumer debt is good advice.
But here is why having a budget and trying to save a few dollars is bad advice. You can't save your way to financial freedom. And I will prove it to you. I'm actually doing it here right now. Now, there is a website. It is called dinkytown.net. On this website dinkytown.net you will see that there's a bunch of financial calculators. So, they're all free. It's pretty good. There is a compound savings calculator. Let's take a look at this together. So, let's say that you already have ten thousand dollars start saved, right? So, it could be that you have it in your savings account. Maybe it's more, maybe it's less not that important. And let's also say that you want to save money over the next 20 years.
Let's say that you are in your 40s and you say, "Hey, I want to retire at 65." Which, by the way, I believe is way too late. Why would you retire at 65? I believe that everybody should retire at 55 because this way you can still enjoy life. Anyhow, so, let's say that you're saving for the next 20 years and let's say the rate of return. So, the interest that you're getting on your savings is 4 percent. Now, I know that 4 percent sounds generous, especially if you look at the markets right now. We're getting 1 percent one and a quarter percent on a lucky day. So, now let's talk about the monthly contributions and this is where I want to show you that financial advisers who tell you, "Just stop drinking your latte every day. This is how you can retire rich," are dead wrong. So, how much is a latte? Or whatever beverage you are getting at Starbucks, maybe it's a fancy tea, maybe it's a mocha? Doesn't really matter, right? So, let's say it is five dollars a day.
So, let's say you are saving five dollars a day. That's one hundred fifty dollars per month. So, if you start with ten thousand dollars right now and save your your latte or your mocha every day, so you save one hundred fifty dollars a month. Look at this, after 20 years you will have what? Seventy-six thousand dollars. Seventy-six thousand dollars? That is nothing.
Now, let's say that the financial planner says, "Well, you have to save some more money. You have to find a way to save five hundred dollars a month." All right. And so, you're cutting expenses. You're not going out with friends. You're not taking your family to dinner. So, you're saving five hundred dollars per month. Let's see what happens. If you are saving five hundred dollars per month and you're doing it for 20 years.
Not going out for dinners. Not having fun with friends. Not having a coffee. Flying economy. Blah blah blah, right? You get the idea, that you would have two hundred thousand dollars. After 20 years. Can you retire on two hundred thousand dollars? Of course not. Well, this very now your financial adviser will say, "Well, apparently, you have to save some more money." How do you do this? I mean, you tell me. Is it easy for you to save 500, 600, 700, 800 dollars a month? Let's just say, you're saving a thousand dollars per month, somehow, magically. You cut your budget.
You're not doing anything for fun anymore. You're driving an old car. You're living in a trailer park home. I'm exaggerating, but you get the idea, right? So, then you would have three hundred and eighty-six thousand dollars after 20 years. So, obviously, this is not working at all. Let me ask you this. Is this making sense so far? Do you now see why you can't save your way to financial freedom? Please do me a favor, leave a comment and let me know if this is making sense so far. Because then we're going to talk about what to do instead. If saving your way to financial freedom is not a viable way, how do you do this? Instead of focusing on cutting your expenses, focus on finding a way to make more money. So, how do you do this? Now, you might say, "Wow Markus, easier said than done." Right? I mean, simply make more money. How do you do this? Well, there's one thing that will help you to make more money. One thing. It's your skills. It's what you know. Because think about it. If you have better skills, than somebody else, you advance in your job.
Here's what I believe, the most important skill for you to have is how to make money while you sleep. So, you can do this through trading or investing in real estate. So, you need to have this skill to make more money not based on how much you work, but based on the money that you invest. There was a dude called Malcolm Gladwell and he wrote a book it's called "Outliers." In this book he suggested, that it takes 10000 hours before you master a skill. 10000 hours? Are you kidding me? I think this is way too much. So, what is the shortcuts? You simply ask somebody who has done it, right? So, if you want to become a millionaire ask a millionaire, "What have you done?" If you want to make money in stocks, ask somebody who has been making a lot of money in stocks, "What do you do?" And the best thing I believe to do is get a mentor. You will see, that the rich people will gladly share how would they make their money. Rich people don't have a scarcity mindset. You see, poor people always think, "Okay, I shouldn't tell anybody what I'm doing to make some money." Rich people they tell you all the time, "Hey, here's what I'm doing and here's why." They have an abounded mindset, right? If everybody would be a millionaire I do believe that the world would be a better place, because I also believe that the lack of money is causing a lot of problems, and you see sharing this what I'm doing here.
Anyhow, a key concept is what you focus on expand. Financial advisers and gurus want you to focus on your expenses. So, what happens when you focus on your expenses? When you focus on it it expands. What I want you to focus on is making more money. How? By acquiring a money making skill. And how do you acquire a moneymaking skill in the fastest and safest way possible? Ask somebody who has done it. And not the financial advisors, because think about it. Financial advisors. Are they already millionaires? You should ask them, maybe they are. Maybe they are not, right? Because you know what they say, "Show. Don't tell." All right. So, this is why I believe that keeping a budget is bad financial advice. Do you agree? Is this making sense? Please do me a favor, leave a comment and let me know what you think about it. And I know that this is controversial but, hey, this is my opinion and I stand by this. I personally do not have a budget. Why? Because I have enough money coming in. And this is what I want you to do the same.
Posted from my blog with SteemPress : http://iread4u.live/2019/05/09/bad-financial-advice-you-have-to-stop-doing-this/
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Posted from my blog with SteemPress : http://iread4u.live/2019/05/09/bad-financial-advice-you-have-to-stop-doing-this/