It’s important to understand money fundamentals from an early age. Whether you’re looking to save money, invest wisely, or simply improve your financial habits, this video has something for everyone. Join me as I share my insights, experiences and strategies for mastering your finances and achieving your financial goals. Hope you enjoy!
Introduction
Today, I will be sharing with you 12 valuable money lessons that I wish I had known earlier in my journey toward financial freedom. These lessons encompass insights into wealth-building, passive income, and personal growth.
Whether you’re starting out on your financial journey or looking to enhance your existing strategies, these tips will empower you to make smarter financial decisions. Let’s dive into the 12 money lessons that can transform our financial future.
1. You Don’t Need College to Become Wealthy
Contrary to popular belief, I have come to realize that college is not the only path to financial success. Many billionaires and successful entrepreneurs have thrived without a college degree.
While higher education can be beneficial, I believe true wealth can be built through other means like real estate, entrepreneurship, and smart investments.
2. Make Money Work for You
Discover the power of passive income and investments. By creating multiple income streams and allowing your money to grow through smart investments, you can break free from the traditional model of trading your time for money.
3. Never Skip Your Emergency Fund
Building an emergency fund is crucial. Set aside at least three to six months’ worth of living expenses to protect yourself from unexpected financial challenges like medical emergencies or job loss.
4. Understand Inflation
Inflation is real and erodes the purchasing power of your money over time. Instead of letting your money sit in a bank account, learn to invest it wisely to combat the effects of inflation.
5. Invest Early and Consistently
Start investing as early as possible to take advantage of compound interest. The earlier you invest, the less you’ll need to contribute over time to achieve your financial goals. Consistency is key.
6. Money Isn’t Evil; It’s a Tool
Change your perspective on money. Understand that money is a tool that can empower you to live life on your own terms. It can provide freedom, support causes you care about, and allow you to pursue your dreams.
7. Pay Yourself First
Prioritize your savings and investments by automating a portion of your income to be saved before you allocate funds for expenses. The 50/30/20 rule can guide you: 50% for needs, 30% for wants, and 20% for savings and investments.
8. Boost Your Income
Saving is important, but increasing your income is equally crucial. Explore side hustles, freelance work, or part-time remote positions to generate additional revenue that can be invested or used to grow your business.
9. Surround Yourself with Inspiring People
Surrounding yourself with like-minded individuals who inspire you can have a profound impact on your financial journey. Seek out people who have achieved what you aspire to accomplish, as their energy and insights can propel you forward.
10. Invest in Personal Growth
Allocate a portion of your income (around 3%) to invest in your personal and business growth. Attend conferences, purchase courses, and surround yourself with others in your field to accelerate your learning and progress.
11. Embrace Delayed Gratification
Understand that building wealth and achieving success takes time. Whether it’s in business or finance, resist the temptation of quick wins and remain focused on long-term goals.
12. Money Alone Won’t Bring Fulfillment
While financial freedom is desirable, it won’t guarantee happiness or fulfillment. Discover your ikigai, your reason for being, by identifying what you love, what the world needs, what you can be paid for, and what you’re good at. Pursue a purpose that brings true fulfillment beyond monetary success.
Conclusion
In conclusion, these 12 money lessons have the power to transform your financial journey and set you on a path toward building wealth and designing your best life.
By embracing the idea that college is not the only route to success, understanding how to make money work for you, prioritizing your emergency fund, recognizing the impact of inflation, and starting to invest early, you can lay a solid foundation for your financial future.
Remember that money is a tool, and by surrounding yourself with inspiring individuals, investing in your personal growth, practicing delayed gratification, and seeking fulfillment beyond monetary gains, you can achieve long-term success and happiness.
Take these lessons to heart, implement them in your life, and watch as your financial well-being flourishes. So, seize this opportunity to learn, grow, and pave the way for a prosperous future.
Below is a transcription of the podcast. This transcription was taken from Otter.ai so it might not be completely accurate:
Unknown Speaker 0:02
This is the digital nomad quest podcast with Sharon Tseung. teaching people how to build passive income, become financially free and design their best lives.
Unknown Speaker 0:14
Hey guys, it’s Sharon Tseung. And today we’re gonna go over 12 Money lessons that I wish I knew sooner. So these are definitely some money tips that I wish I knew sooner because if I had learned these things, I might have grown my net worth even further and done it at a faster pace. But we’re all on our own journeys, I would just say these money tips are great to know to build yourself up for your future. So make sure to take notes. And I hope this helps you guys. So let’s just get right into it. The first one is you don’t need to go to college to become wealthy. I’ve always thought the formula to becoming wealthy is to finish school, get good grades, and get a high paying job and then work that job for the rest of your life. Lo and behold, when I graduated from college, and I started my first job, I was like, Is this gonna be the rest of my life like that was already within two weeks, I realized that I did not want to do this. But according to the study, one in eight of the Forbes 400, which are the 400 wealthiest billionaires in the US are college dropouts. So a lot of the people I know a lot of creators and entrepreneurs, some of them did not go to college, some of them didn’t use their degrees, so made huge pivots in their careers and then just started their own businesses. None of this requires you to go to college, I’m not saying you shouldn’t go to college, because actually had a really good time at college. And I do recommend it. It’s great as kind of a backup. But I feel like true wealth is built through other means, like real estate or building your own businesses investing your money to make your money compound, like all of these things don’t require a college degree. Okay, Lesson two, you can make money work for you. So I didn’t realize this until 2015. or so because back in 2014, I traveled in Europe for a month and I realized how much life I was missing out on I was living in the Bay Area for so long. And I was like, I need to make this a reality for me that I can travel and do whatever without having to be in the office all the time. That’s when I started looking to other income streams like Etsy or Amazon and I realized people are making money work for them. They’re making money in their sleep, they’re putting money back into their investments and businesses. So that money just makes more money. So you got to figure out how to not actively trade your time for money. I say try to get into a position where if something happens to your full time job, you’re still okay, he’s built passive income streams that make money work for you had I learned this sooner, I would have probably gone a lot further. So you guys should definitely start thinking about these things now. And I try to put out a lot of side hustle videos on my YouTube channel, because I know that made a huge difference in my journey. So go ahead and check those out. Especially if you’re trying to build passive income. You’re trying to learn how to invest in real estate to get that cash flow, go ahead and check out my videos. So you guys learn how to do this lesson three, you should never skip your emergency fund. Now what does that mean? your emergency fund is important for if anything happens to you like medical emergencies, unexpected car repairs, unexpected home repairs, you never know what’s going to happen, maybe even get laid off for your emergency fund, it’s important to have at least three to six months worth of expenses saved up. So I would tally up your monthly expenses, basically find out the average, I use Personal Capital, I’ll link it down in the description below. Because it basically integrates with all your bank accounts and stuff like that and finds out how much you are making and how much you’re spending and categorizes at all. So go ahead and use that tool. And then it’s going to tell you how much you are spending monthly. And you got to basically save at least six times of that if you can, that way, you still have some time and some room in case anything happens to you lesson for inflation is real. Now what is inflation, it basically means the value of goods is going up while your currency or your money is going down. So you are gradually losing purchasing power with your cash. So if you’re just having your money, sit in a bank account, you are losing money in a sense. So you got to figure out how to make that money work for you. Which brings me to Lesson five, you got to invest your money sooner than later. A lot of people don’t realize that the earlier you do it, the less you’re gonna have to contribute to investments. So you should invest consistently when you’re young because your money is going to compound. So let’s say you have $20,000, maybe you’re 25 years old, and you decide you’re going to start contributing monthly to an investment worth $600. And in 30 years, when you’re 55 you want to become a millionaire and say you’re getting a percent with your investments. So for example, maybe you invest in SP y, which is an ETF that tracks the s&p 500. So it’s basically like a basket of stocks. And in the last 30 years, it obtained a 9.58% compound annual return as you guys can see here, so 8% is pretty feasible. Now if you press calculate, you can see that you’re gonna be able to become a millionaire in 30 years. So that’s amazing with just $600 a month you’re gonna be able to do that. And if you look at this chart, your total contributions would be $236,000. But then the value you would end up having because you invested your money, it’d be a million dollars, but maybe instead you realize that you should invest at 35 years
Unknown Speaker 5:00
Old and then you want to get to millionaire status by 55? Well, you would only have 20 years to invest, and you would only have $422,000 instead of the million dollars in the other example I mentioned, so the length of time actually really matters. And in order for you to catch up to this, you’d probably need to contribute more monthly. Even if you do $1,500. Instead of that $600 For 20 years, you still wouldn’t hit millionaire status. If you were doing these numbers, you need to contribute even more. So that’s kind of why I’m saying you should start earlier because you would need to contribute less money if you start earlier. Number six, you have to understand that money isn’t evil and having money isn’t a bad thing. So I think there’s a lot of people who think it’s taboo to talk about money, they think it’s a bad thing for people to own money. So they look down on people who are wealthier, but if you think it’s evil or bad, you might be sabotaging yourself to improve your wealth. Money isn’t inherently evil, it’s actually a tool. So instead of thinking is just this bad thing, think of the benefits, right, it could potentially give you more freedom to spend time with your family more to donate to different causes that you care about more to invest into businesses or dreams that you’ve had and you wanted to pursue with your life. So money isn’t bad. It’s just a tool that can allow you to live your life intentionally, if you want to make it that people can use money in bad ways, right? But it’s up to you. And I would also say stop thinking that it’s not a good thing to talk about money because for example, maybe you’re working in a job and then you find out your coworker is making 15% More than you and is doing the same things as you, you wouldn’t be able to know those things unless you had that conversation. And not only that, it’s important to learn these financial topics. If you are talking with other people who are interested in those things, you might be able to increase your knowledge faster and learn a lot more get motivated to invest and things like that. That’s why it is important to talk about money and to stop thinking of it as a bad thing less than seven, it’s smart to pay yourself first. So what does that mean, when you pay yourself first, you usually set up an automatic savings before you make other expenses. So for example, there’s the 5030 20 rule, they say 50% goes to your needs 30% goes to your wants and 20% goes to your savings and investments. If you’re trying to follow this rule, you would put 20% of that into your savings and investments and then make the 80% stretch for the rest of the month. That way you make sure that you’re making steps toward building your wealth before you pay off your bills and your rent and everything like that, you just need to make sure you do those calculations that you can do this. Now for example, if you’re making $5,000 a month, you put 20% of that which is $1,000 to your savings and investments, then you make the remaining $4,000 stretch and cover your bills and expenses and things like that. So that’s basically how it work. And this is very important for you to grow your wealth, it’s very smart to prioritize your savings investments and make the rest stretch that way less than eight, there’s a cap to how much you can save. So I do wish I learned this earlier. Because I was always savings oriented, I would always be very good about reducing my expenses saving as much as I can. But I didn’t think too much about boosting my income until 2015. And that’s when I took three part time remote positions while I was working my full time job so that I would have more money to put into my businesses and to invest this made a huge difference in my trajectory with my finances. So you should definitely think about how you can boost your income. And I talked about a lot of side hustle ideas. So go ahead and check it out. For example, you can make money selling digital products on Etsy you can sell custom apparel on merch by Amazon, you can start a blog YouTube channel and you can do part time remote positions, freelance and start boosting your income. That way you’ll have more money you can contribute to your investments and make that money work for you. Lesson Nine, you want to surround yourself with people who inspire you. I really started doing this in 2016 When I quit my job and travel the world for two years, and I met a lot of other digital nomads, building their own businesses. And then suddenly my circle was very different from what it was before. In the past my circle was of people just climbing the corporate ladder, they didn’t really think too much about all these other things. Whereas when I left my job and started traveling and meeting these people, I was around people who had the same mindset as me, I was around people who have achieved goals that I wanted to achieve. There’s that quote that you’re the average of the five people that you surround yourself with. So I think that’s really true. And you should definitely surround yourself with people who inspire you. And it doesn’t even have to be financially it could be in other things like maybe you surround yourself with people who are really dream focus, they really care about pursuing their music or their art or their acting, and you want to be around that energy because that’s who you are as well. I think you should definitely surround yourself with people who inspire you that you respect, it kind of brings me to lesson 10 which is to invest 3% of your income on yourself actually read this in a book by Brian Tracy and that really put some things in perspective because I wasn’t spending that much on my own personal growth on my business growth and things like that. I would always just be saving but in reality if you do that you’re gonna grow a lot faster. So I started buying courses I started buying conference tickets and surrounding myself with other content creators
Unknown Speaker 10:00
And that’s why it’s kind of relevant to Lesson Nine because I started surrounding myself with people who were where I wanted to be by going to these meetups and conferences that I paid for and then doing so they gave me a lot of tips that expedite in my journey. So don’t be afraid to spend money on your businesses, on your personal growth on surrounding yourself with the right people. Sometimes you have to take those steps in order to get uncomfortable and grow even further towards your goals. Lesson 11 is delayed gratification is crucial. I’ve always been pretty good about that. Like, I’ve always been good about saving money. And like understanding that things take time, I always kind of look at the future and like, make sure that I am working towards something. But I realize how important it is even further now because for example, with the investing example, if I started 10 years later, I’d be a lot further from my goals. So you got to invest early. And then you also have to realize, for example, if you’re an entrepreneur, you’re building a business, that’s going to take time as well, this YouTube channel, it took me one to two years to even get monetized. And I wasn’t making any money for the longest time. Same thing with my Instagram account. It took me many years, I had 3000 followers or so for five years or more. And then it started building as I started putting out more content, things take a lot of time. And you have to realize delayed gratification is crucial, whether it’s in business or whether it’s in finance, everything takes time. And you got to remember to not just want quick wins right away. Now, last lesson is having money doesn’t mean you’re going to be fulfilled and happy. I’m super grateful to be in this position where I don’t have to work a nine to five anymore. But I would say it doesn’t solve all your problems, you realize that you need things to fulfill you there’s this term called iki guy and eti is a Japanese concept. That means your reason for being and it basically is this Venn diagram of four circles of what you love what the world needs, what you can be paid for and what you’re good at, and then that merger that is eKey guy and that’s usually what your purpose is and what will make you feel fulfilled. So I definitely recommend doing that exercise because you know, when I first started trying to pursue financial freedom, I thought that was going to solve all my problems but that can’t be further from the truth. You have to figure out what kind of gives you that purpose and makes you feel fulfilled you usually have to work on something because most people who retire end up working again anyway towards maybe something that they care about. So money isn’t going to solve all your problems. So hope you guys enjoyed this episode. Please make sure to rate review and subscribe. It really helps our podcast grow. And thanks again. I’ll see you guys in the next one.
Transcribed by https://otter.ai
