2021 Goals: How to be Better with Money

[Music]

Hey guys, welcome back to the channel. First things first, happy new year! Hope you guys are having a great time, having a bit of time off just to rest and recover and regenerate after a pretty disastrous year that was 2020. But that's actually kind of what this video is going to be about. The video specifically, I want to address how you can, you know, come out from 2020, which was so tough, and in 2021, really set yourself up financially.

So we can learn our lessons but bounce back stronger than ever before and really set ourselves up financially for 2021 but also the future. So, I did want to say just a quick plug right at the front of the video is that we are doing a new year's sale over on Profitful. So if you're interested in learning more specifically about the stock market investing part of financial freedom, then check out the links in the description below. That will take you over to Profitful where I've made some very in-depth courses about passive investing and active investing stock picking.

So if you're interested, links are down in the description. Don't push on you too hard, but it's there if you're interested in picking it up and it's at a pretty decent discount at the moment. But yeah, back to what we're talking about before. Yeah, 2021 obviously a lot of people are looking to get better with money. And it's true, money is like one of the biggest stresses that we face in life.

It's generally like death of a family member, divorce or relationship issues, and then after that, it's financial difficulties. They're like the three main big stresses that apply to most people. And a lot of the time, the strategies that you can put in place to make sure you're better with money going forward is actually just they're focused on avoiding bad situations, times where you are going to find yourself in a lot of financial difficulty.

So the first thing I wanted to talk about, one of the key things in 2021 if you want to get better with money, a key thing, the first thing you should focus on is building up an emergency fund. So this is not an investing account, this is not a spending account. This is quite simply a bank account where you're just holding cash.

And you're holding cash and you're building up your emergency fund, and you only use the emergency fund if you're in dire straits, if you're in a real bad way. Something really bad has happened to you, you've lost your job, you're getting a divorce, you know, some you've been struck down with illness or something like that. That's when you use the emergency fund.

And ideally, what I say to most people, like my friends, is just like five thousand dollars. Have five thousand dollars saved up. So work really, really hard at work over the next three to six months to save up an extra five thousand dollars that you just keep in this bank account, and you just don't touch it.

It's there if you need it, but you just don't touch it unless you have to. And it is such, such a stress reliever! It really keeps you out of a lot of financial stress knowing that in the worst-case scenario your life just explodes, you've got five thousand dollars that's always sitting there that you can access straight away that can help pick you back up and get you back up on your feet.

So I always say at least five thousand dollars. If you're young and you know you don't have a mortgage or whatever, then probably five thousand dollars is all you need. But ideally, if you want to go absolute beast mode with your finances in 2021, try and get ten thousand dollars saved up because ten thousand dollars, you can stretch ten thousand dollars a very long way if you need to.

And that will generally get you out of even the worst pickles that you find yourself in in life. Like there are some, obviously maybe if you fall very ill, maybe there are some bills that are bigger than that. But generally speaking, for most people, ten thousand dollars will get you out of most pickles that you find yourself in.

So, and especially if you say a family, you know, you've got kids and you've got a mortgage and you've got a car that you're paying off, then maybe you do just need to aim to ten thousand dollars anyway. But typically, I don't say there's much point in making your emergency fund bigger than ten thousand dollars because once you get more than ten thousand set in that emergency fund, then really your money is better off being used elsewhere to try and make you more money.

But definitely, number one is build an emergency fund. Then step number two, after you've built up your emergency fund this year in 2021, please think about generating income from more than one source. So don't just get stuck with one source of income.

And maybe you do have, you know, one job that is your full-time job that takes up the vast majority of your time, maybe it pays you very well. No, I'm just going to stick with working hard at my job, but you have to acknowledge that there is a risk in doing that in not focusing on having multiple sources of income.

It's kind of like tempting fate. It's kind of like, you know, when you have a bad day, you look to the sky and you say, "Can this day get any worse?" Well, generally, you're tempting fate and something else happens to you on that day.

It's the same thing, it's like it's essentially looking to the sky and saying, "Oh, I'm doing it all right. I've got a great job, there's no way I'm gonna lose this job." It's just tempting fate, right? And as it turns out, losing your job is actually like one of the top stresses, full stop, that humans, that most humans face.

So one thing I personally focused on about five years ago is making sure I never put myself in a situation where I was reliant on just one stream of income. I never wanted to leave my fate to the universe, you know? Because you can lose your job, even the most secure jobs.

We've learned, a lot of people have unfortunately learned that in 2020 that even what they would consider a very safe, secure job with something like a global pandemic or a shutdown. While that's very unlikely in the grand scheme of things, as 2020 has proven, it can happen. And even the most secure jobs can be put on the line in that situation.

So it's a very, very good idea even if it's not your primary, even if it doesn't get anywhere near your primary source of income, try and get another stream of income up off the ground so that your bank account is being boosted from multiple directions in 2021. And it could be anything.

A lot of people just think, "Oh, I don't want to have to get another job. I already work enough as it is." Doesn't have to be necessarily go, you know, if you work at Coles, it doesn't mean you also have to go and do some hours at the BWS or something like that. Definitely not the case.

You can do anything. I mean, 2021, this is the year where there are more opportunities than ever before to generate your own income. You know, you can just sign up and become an Uber driver. You could perhaps you do a weekend course on woodworking or something, cabinet making, something like that and maybe in your spare time you just whittle away and make some furniture or, you know, make some art or something, try and sell that.

You know, maybe you do something like I do this, go and do a weekend course and become a gym instructor, get paid to go and work out. That's a pretty good deal in my book! Maybe you make up some flyers and go and offer lawn mowing garden care in your local neighborhood.

You never know, some people might take you up on that offer. Maybe you just reach out on Facebook, "Does anyone need an extra set of hands? I'll work for 25, 30 bucks an hour if you need an extra set of hands. I'm here, I can lift, I can shift, I can help you out, whatever it is."

You know, I've got a photographer friend that, you know, he's got so much gear. He does all the photography himself, but in terms of setting up and packing up, he needs other people to help him out. So he's always reaching out, "Hey, can you come give me a couple hours of work? I just need you to help setting up and packing up. You know, I'll do all the photography, but I just need your help to do the other stuff, the easy mundane things."

So there are a lot of different options. And yes, I know at the current time we're living in a world where it's kind of like, "Look at the unemployment rate, it's up so high, no one's hiring in this kind of environment right now." But I truly do believe if you put your mind to it and you are dead set focused on generating another form of income or finding another job, finding another income source, then you'll be able to do it if you put your mind to it and you really try.

Think outside the box and try, then I definitely think there are enough people out there that are looking for work that you will be able to find something, definitely. So that's the second thing I wanted to talk about. Number one, get your emergency fund set, five to ten thousand dollars, financial fortress, that's your fallback.

Then second, make sure your bank account is being boosted by multiple income sources. And then third, this is, this is like definitely number three should focus on those two first, but then after you've got those set up, then the third thing you want to do is look to the future. Set a foundation now that is going to pay off years down the track, right?

So what you need to do is you need to start investing. So people can invest in a whole bunch of different ways, but it's the general concept of putting some money towards a project that is going to get you even more money in the future, right? That's an investment.

So a lot of people invest in their own business. They put money into their business to grow the revenues of the business to help them out and grow the business in the long run. A lot of people invest in real estate, right? You build equity in your home and over time your home appreciates in value, and one day you'll be able to sell it and you'll be able to make a profit, or you have an investment property where you're getting income from tenants.

But a lot of people also like to turn to the stock market, and that's specifically what I like to do, you know? But it doesn't really matter which way you want to go about your investing, just make sure if you can start doing some form of investing in 2021, that would be awesome.

But personally, the way I like to go about it and the way that I would probably approach it if I'm someone that's brand new to the concept of investing is start out investing in the stock market because you don't need a lot of money to get going. And I'd start the way I started my investing journey. I'd start by passive investing.

So historically the stock market, just the overall market, just goes up at about eight percent per year. Now, it doesn't always get that. Some years it does much better, some years it does much worse. But over the long term, the compound annual growth rate, the average compound annual growth rate is eight percent, that's for most major markets around the world.

And you don't, when people hear about stock market investing, they think I have to go and pick individual stocks, not the case. You can just buy an investment that diversifies across the whole market and then you're setting yourself up for just getting whatever the market gets.

So the longer you leave it, the more likely it is that you're going to end up getting that average market return of eight percent per year. So in my opinion, passive investing is the third key ingredient for most people to get better with money. Okay, definitely need your emergency fund, definitely need multiple sources of income, but then lay the foundation that will grow your wealth over time.

Remember, this is something you may not get to this point in 2021. You might not get there. You might focus on your emergency fund, yep, I worked really hard and I got my five grand under the belt. Then you might focus three months on trying to find some other form of income, and then that might be the year done. Totally fine!

But if you want to go ultra beast mode and really, you know, grip 2021, say right, I am getting my life on track, I'm getting my finances under control, then look to start investing as well. So once you've done that 5,000, 10,000, you know, emergency fund and you're still working and you're making more money now, then try and take some of that money every fortnight and just put it into an account which you know is going to go towards your passive investing.

And then you just snowball that, starts the snowball, right? You've got that base, that investing base, and over time, as the market slowly trends up over time, that snowball is going to keep rolling and keep getting bigger.

Think about this: if you're 30 right now and you invest one dollar into the market and you get the, you know, annual historical average market return every year for until you retire, essentially until you're 65, then every one dollar that you invest right now is going to be worth 14 to you by the time you retire. Pretty staggering!

But think about this, rewind the clock just five years earlier. If you're 25 and you do the exact same thing, invest one dollar now, get that eight percent per year until you retire at 65, then every one dollar you invest now is worth 22 dollars to you now.

But get this, if you're 20 years old right now, every one dollar that you could invest right now is worth 32 dollars to you by the time you retire at 65. Really let that sink in, and if you do, you realize that stock market investing, even just passive investing, just the absolute easiest stock market approach in the history of forever.

Even if you just follow that, you can get very, very wealthy in the long run. You can really set yourself up if you just devote a small amount of money to investing now. If you had, if you're 20 years old and you get eight percent per year on average until you're 65, you invest 10,000 into the stock market, by the time you're 65, that 10,000 will have compounded up to 320,000.

So again, if you don't get to the investing side of things in 2021, that's okay, but make sure it's the third step and you do get to it eventually. Now, a lot of people hear that and they go, "Oh, this is such a great deal," but then the next step is they don't really know how to get started.

So I will just say don't, you know, push it on you again too hard. If you want to learn about the passive investing approach, check out Stock Market Investing for Beginners. That is a very good four-hour in-depth course that tells you everything you need to know how to get started with the passive investing approach whether you live in Australia or whether you live overseas, doesn't matter.

So it's only 30 dollars at the moment. So if you're interested in learning and getting that passive investing structure set up for 2021, check out the link down in the description below, only 30 right now as a part of our new sales.

So if you're interested, check it out. But overall, that's where I'll leave this video for today. They are my three big tips if you want to get your life on track, get your finances on track and really make 2021 just an absolute beast mode year, your best year yet, and one where you really set yourself up.

Coming out of a disaster 2020, you're going to set yourself up in 2021. They are the three steps that I would suggest people think about: right, emergency fund, multiple sources of income they protect you, right? And then third, start with some investing, lay the foundation for the rest of your life.

But anyway guys, that's where I'll leave it. I hope you enjoyed the video, leave a like on it if you did. I really appreciate it and it really does help out the video a lot. Um, so it's the easiest way to support the channel, leave a like, leave a comment.

What do you think? What are some other goals that you're looking to achieve in 2021? Love to hear from you, so leave that stuff down in the comment section below. But that will do me today guys, thank you very much for watching and I'll see you guys in the next video.

[Music]

[Applause]

[Music]

[Applause]

[Music]

[Applause]

You