The Only Personal Finance Video You'll Ever Need

In the next 40 or so minutes, we're gonna do a deep dive into everything you need to know to set yourself up for success in the world of personal finance. We're gonna cover everything from learning about the basics of finance, to earning money, to saving it, and finally, to investing it. And if you're wondering why you should listen to me and or watch this video, you can check out these videos here or any of the books that I've written about these subjects. I've also done full deep dives into a few subjects like debt and the stock market. So those videos and those subjects, I'm not gonna cover as in depth as I will these other subjects, but you can always go and watch those videos if you do want the deep dive. Like I said, the video is gonna break down into four subjects, the first of which will cover your introduction to basic financial concepts. Then we're gonna cover how to earn money and how to approach earning money and wealth generation. Then we're gonna cover spending money and how to spend it correctly. And then finally, invest, so how to grow that money through a number of assets and investments. Now, personal finance at its core is about first how you generate and how you make money and then what you do with it, whether you spend it, you invest it, and then how you spend it or invest it if you do so. Now, at its core, right, anything personal finance related is gonna break down into these subjects at some point, and these are just the tools or the frameworks that you're gonna involve yourself with in a financial sense. The first of those is the concept of assets versus liabilities. If you've seen my other videos, I am beating a dead horse here. But assets and liabilities break down into things that make you money and things that cost you money, right? So if you buy something like a house that appreciates over time, as long as you aren't spending more money than you should on it, say through a mortgage, then that's gonna make you money. If you own a business or a stock that appreciates in value, you're similarly buying an asset. Meanwhile, a liability is something that costs you money. So if you have a loan for a consumable, say like a new technology, say like your Apple Max, right, phone that came out, if you have that through a loan and you're paying every month for the loan, then that is a liability. That's something that costs you money over time. Now, really the core concept of personal finance is you wanna buy more assets and you wanna have fewer liabilities. If you have more assets, you're making more money, you're making it when you work for it, you're also making it when you don't work for it, right? And that if you own, say, a stock and the stock goes up, you don't have to put in your time, you don't have to work, say, get paid by the hour for that stock to go up. So you can make money via owning assets as opposed to trading your time for money. Meanwhile, if you have more liabilities, well, you have to pay more, you owe more, and generally you're less wealthy and you're not financially free. You are tied to these things because you are obligated to pay people back or pay things back because essentially they are costs, they're a liability. So the core tenant here is just, okay, we wanna figure out how to get more assets and how to earn more and then how to have fewer liabilities over time. The next concept is taxes, right? Everyone has to pay taxes. What did they say? It's taxes and death are the two things you can't escape. That really is true. However, most people, excuse me, approach taxes in the wrong way in that at its core, taxes are a system of incentives, right? The government uses taxes to fund everything they do. They are a deeply integral part of society, but they set up the tax system in a way so that if you know what you're doing and if you do things that the government wants, they will give you tax breaks, they will give you incentives to do things that they want, right? That's also in part why the tax system is built as it is, whereas if you make more money, you pay more as a percent of your income in taxes. And that's because if you're not making as much money, you're not doing, you're not gonna give the government a lot of money anyway. And so the incentive there from the government's perspective is for you to make more money. So if you pay less in taxes, theoretically you have more so you can earn more later. And the logic there as well, the top 1% of people, of earners and individuals by net worth in America do pay the majority, right? The vast majority of taxes. So in that sense, that is an incentive. And then if you do things like provide housing for other people, if you own an apartment complex and you rent those units out, right? You can get a lot of tax breaks there. And generally, if you own a business, you're gonna get a lot of advantages tax-wise. So again, in that sense, if you start a business, if you provide economic value, that's good for the government, that's good for you. And so there are tax breaks there. So we can think of the tax system as a matter of incentives and one that if you play the game correctly, if you do things the government wants, if you approach it in the right way, and if you know what you're doing, you can minimize what you pay. And that's not to say you shouldn't pay your taxes. You absolutely should pay your taxes, but it's a matter of doing it correctly and doing it in a way that saves you money and that encourages you, right, to make more money, to make more and earn more assets. Now, I'm gonna do a whole nother video that's a breakdown of taxes. Generally, just my 10-second spiel is track everything and make sure to take write-offs and depreciation on various items. At some income level, it also is absolutely worth it to hire a professional. It's not worth it to do it yourself. But if you're below that threshold, then don't worry about it and just file those yourself, but also just keep in mind those tenets of, okay, track things and then write off what you can and take depreciation on items additionally when you can. Now, this third financial leg is that of banking. And the reason that this is on here is because anywhere you store your money, generally, a bank is going to be involved. If you want to use other people's money through a loan, a bank is gonna be involved, right? The whole financial system at its core runs really on banks because banks hold your money, they invest your money, they give you money, and so on. There's a lot of different types of banks, right? Most people have their checking account with a bank, they have a saving account, and then they have an investment account, say, with a brokerage or an investment bank. Now, there's a lot that you can do here with banks, right? Banks are there and they're financial tools that can help you. For example, if you only have, say, a savings account right now and you keep your money in there and that savings account makes you 1% per year, right? If you just transfer that over to a brokerage and you put that in bonds, now your money's making 5% a year. And if your money makes 5% a year versus 1%, right, over time, that's gonna look like this versus this. So if you wanna be there as opposed to there, simply by holding your money, say, in a brokerage account by investing it versus keeping it in a savings or a checkings account, you're gonna make more money down the line. So understanding how banks work also, that ties into things like credit, as in banks are the ones that are gonna give you money. So you wanna be nice to them. You want them to trust you with their money. And to do that, you're gonna use a credit score, which we'll touch on here in just a second. I also wanna touch on economics. This is our kind of fourth leg here. And the reason for that is the game of money and personal finance really at its core is a matter of economics. Economics being just how people interact when it comes to products and goods and services. A lot of how you live your life is going to be, in a financial sense, is gonna be determined by your macroeconomic situation. Your macroeconomic situation is, well, how is the country you live in performing economically? Where were you born? What are the opportunities there? And then things like education, language, these are all big things that ultimately will impact your personal finance. The country you're born in, the people you know, the level of wealth around you, right? And then how your investments perform, well, that's gonna be a matter in large part of the macroeconomic situation. So understanding those things is really helpful when it comes to deciding how to earn money, how best to earn money, and also where to put it or how to invest it. For example, the Federal Bank of the U.S. right now, they're doing a lot with interest rates. And over the last year or two, how they've raised or lowered interest rates has drastically altered the economy, right? You saw a COVID tank in the stock market. Is that on screen? Yep. And then you've seen this massive run-up over time, especially in the stock market and some other asset classes as well. And all of that is really fundamentally tied to the Federal Bank playing around with interest rates or again, the macroeconomic situation. Same with COVID-19, right? That was a macroeconomic situation. If you live in South Africa, right? In India, wherever you are in the world, there are these decisions that are made on a countrywide level and also just situations and events that unfold on a national level and a global level that really will impact, again, how you can make, how you can spend and invest money. So understanding those things is critically important. And we're not gonna do a deep dive on just your sort of macroeconomics now, but that is something to look into on your own time. And I'm sure we'll do videos on that in the future. The last financial leg here that I wanna cover is that of credit. Now I did do a very long deep dive into debt. Debt and credit are pretty much synonymous, right? Credit is you owe someone something. Debt is an IOU or an obligation. Credit is important because it gives you leverage. It lets you use other people's money while using less of your own. Now that's a dangerous thing in concept because if you think that you can get away with using other people's money and you use too much of it and you can't pay it back, well, that's a bad thing. That's why too much debt, too much credit is a bad thing. However, it is in large part, if you do it safely and approach it safely, a very valuable element of your financial portfolio and health and capabilities. So a very basic but also great example of that is the mortgages. And most people buy their houses using the bank's money. Why? Because they have to put less money down and they're gonna make more money over time. So in that sense, a mortgage is more valuable. In a similar line to that, your credit score is the degree to which banks and institutions and people trust you with their money. So there's credit, there's debt, and then your credit score is just, well, the score, the indicator, the metric they use to figure out if they should give you credit and debit, excuse me, or debt and not. So your credit score, and again, you can watch this in the debt video, but it works on a scale that maxes out at 850. And generally, if you pay back your loans on time or your credit debt on time, if you keep the number of credit cards you have fairly low, but you also are active on them and you use them for a long time, your credit score is gonna go up. The higher your credit score is, the less you're going to pay in interest on loans with interest being the price of money. So how much you pay for loans, a 12% yield versus a 4%. And then generally, if you pay less for debt, you're going to earn more. So generally, just your credit score is a core element of your ability to use debt and to use credit. And so the bottom line there is have a few credit cards, use those credit cards fairly often, but reasonably so, and then pay back all your debt, your credit debt, or the amount of your credit line that you've used on time. If you do that, the banks will like you, and then you're going to be able to get more assets and have less liabilities. Now, generally, if you understand in some part, to some extent, all of these things, you're gonna be able to make educated decisions about anything relevant to finance, right? Say buying versus renting a house, right? A lot of people make this decision at some point in time. And let's say renting an apartment, right, versus buying a house. Now we can use these various tools to figure out whether we should buy or rent, right? Take assets versus liabilities. If we're renting, that is a liability. We're not making money because we don't own the property, we're just spending every month on the property. However, if we buy and say the house goes down in value, well, now that becomes a liability because we're also paying on the mortgage. So we can think about, is the house going to go up in value? Is it going to be an asset? Or are we going to pay too much for it? Are we gonna pay, say, $6,000 a month in rent? That would be ridiculous, but let's say 6,000 a month, and I only make 7,000, right? Is that too much? And is this, in that sense, a liability? We can also think of it in terms of taxes and banks and credit. For example, if you wanna get a mortgage for your house instead of just paying 100% in cash, well, you gotta go to the bank. And the interest rate or how expensive the money is that the bank gives to you, that in turn is a function of credit and your credit worthiness or your credit score. And one last point I wanna touch on is that analytics and data is key to anything you do in finance. Most financial things are trackable, right? You can figure out how much you spend and exactly what you spend it on. When it comes to your performance, your job or in your business, you can break that down into, well, what am I good at? What can I improve at? And so on. So generally, the more data you collect about everything you're doing, the better off you're gonna be in a financial sense. So if you have a business, right, that needs to be broken down into, here are the eight parts of the business, here are the different people, here are the products, here are the costs, and then how can we improve based on that data and those analytics. And then, again, the same applies in your job, the same applies in your personal skillset because that really is what decides how much money you can make in the market, whether in a job, again, or your own business, and so on and so forth. Generally, you're gonna be better off with more data. So focus on analytics and track what you can. And it also applies in a very material sense, again, like, say, with storing your receipts for the purpose of taxes. That covers learn. Now we're gonna get to the fun part, that being, well, how do we earn money? Now, this is a big question and a largely personal one in that you're gonna spend a lot of, if not a majority of your life working for money. If you work eight to 12-hour days and you're only awake for, say, 16 hours out of the day, if hopefully you get your eight hours of sleep. So earning money, the best way, I think, to break it down is this. Earning money is a reflection of value which ties into skills. And by that, I mean money is a competitive asset. Many people want it and it's valuable, which means what? It really comes down to value itself. The more value you put out into the world, the more value you're gonna get back in the form of money. Because money is just a metric form of value. Let me write that down. And what I mean by that is before money, let's say I wanted a goat for my neighbor, right? And I only have, well, two sheep. And maybe my friend today, my neighbor, wants apples instead of sheep. Now, if I had apples, I could trade them for the goat, but otherwise, well, I'm stuck. What money does is provide a medium of exchange there, right, so if I have good A and my friend has good C and wants good D, well, we both agree that good B has value. Good B can be exchanged for good A, for good, excuse me, for good C, for good D. Everyone agrees, everyone can use B to buy anything, right? That is essentially what money is. So as opposed to just trading A for C because say I don't want this asset C, well, I just get some asset B with my asset A and then I use B to get C. So with enough people in the market of money everything has a fair price. So if I wanna buy say apples at the local grocery store, the reason apples are sold for a certain price is because people are willing to buy them, other people are willing to sell them and make them and that intersects to form a market, which is really just a bunch of buyers and sellers. So since money is a metric form of value, we can just think then of how much money you can make and how much money you're going to make in terms of value. Now, there are a lot of ways to think about value, it is in a sense an arbitrary thing, but we all intuitively know what that means. If something is valuable, that means we want to use it, we want to have it and we want people around us to use it and have it, right? Health is valuable, love is valuable, money itself is valuable, not for the sake of money, but because I wanna go on vacations, because I want to buy a new video game or a new phone and so on. There are these things that are valuable and money lets us buy them because money is a metric form of value, it lets us put a price tag on something like a vacation. Then the question is, well, in an economic sense, what form does value take? And one indicator of value, which is imperfect, but does make sense when you think about it is your hourly wage, right? If you go work at McDonald's, the amount they're willing to pay you is gonna reflect how much money you make them, how much value you provide for them. The value in that case may be making the fries, taking the orders and so on. And then let's say you provide the company, right? $30 an hour in value. Well, they're gonna pay you some amount of that, they're not gonna pay you more than that, otherwise they wouldn't want you to work for them. They may pay you 15 an hour and then they're gonna use the other 30 to pay investors, to build new stores, to do marketing and so on, do everything else you need to run a large company. So any job, right? Essentially the amount of money you make from it is the amount of value that you give to the company at hand. The same applies in say entrepreneurship or starting your new company. The problem there is that, well, value is more arbitrary. It's less of a known than it is when you go to a job and you flip fries and you can make 4,000 fries an hour that's worth 80 bucks and so they're gonna pay you 15. If you're starting a new company, you don't know how much your product or services work, you're hoping that it works out and that it is a valuable thing. And if the product or service you create and provide, if that is a valuable thing, if it's better than what exists, if it doesn't currently exist and it solves a problem, right, then you're providing value because you provide value, right? Metric value, e.g. money will be returned to you. And that is why the free market as it does functions. It really is just an exchange of value. Whereas when it comes to earning money, it's, well, the company is going to, I'm gonna give the company some amount of value and customers, they're gonna give me some of that. And in the case of creating, right, a product, a company, a service, et cetera, that is a function of, well, let me try and create more value than what's out there and then I'm going to give my customers a certain amount of value and take a cut of that in return. And by that, I mean, if fries are worth $4 to you, you're not gonna pay $5 for them. If they're worth $4 of value to you, you might pay $3, you might pay a certain amount. So as a business owner, if you create a product or service, you're gonna give people, say, 10 units of value arbitrarily, and they're gonna give you, say, $8 back, right? Or whatever the units are there. So in that sense, again, money really just comes down to value. And when it comes to how much money you can make, again, I said value and skills is what we had up here. The amount of money you make then is a reflection of the amount of value that you can provide either to customers in the form of a business, a product, a service, or to a company that you work for. Now that, generically, we can think of coming down to skills or your ability to do valuable things. And to do valuable things, you need to be able to create or to do things that most other people can't. So pretty much anyone can, right, flip some fries and make their $15 an hour. That's why that pays $15 an hour. Now to make a, let's say, code a new app, right? That maybe might pay not 600, let's say 200,000 a year if you do that for a big company, because maybe that app is gonna go and make $500,000 a year. You're still just taking a cut of your value. Now the counter argument to this, the easy one is, well, the CEO isn't really, really skilled, right? And yet they may make one decision and get paid $100 million for it. The logic there, however, is that they have some score of skillset, whatever that skillset is, that is still going to provide more value than it takes. As in, if you own, if you run a $10 billion company, you don't have to be that skilled, sure, and that's not to say CEOs aren't. They are usually very, very skilled. But if you make a decision that makes the company a billion dollars, you're gonna be paid 100 million. It's $100 million, but you still created more value because a single decision for the company goes and does a whole lot of things that are going to make money for the company. Hopefully, and CEOs that don't make money for the company, they're going to get fired eventually, or they should be if the market functions correctly. So no matter how you look at it, and especially in your situation, whatever that is right now, the focus should be, let me get more skills. Let me change or hopefully further in a better way, my ability to do things, to create things, all so I can provide more value. And if I provide more value, the market will return that to me, their customers or my employer in the form of money. Now, the next question we have to ask is, well, then what are those skills? What are the things that will impact my ability and increase my ability to create hopefully valuable things that either an employer wants or that customers want? The way we can think about that is hard skills versus soft skills. Hard skills are going to be your technical knowledge. And let's think of these under the framework of high value skills. So a hard skill is the ability to code. It is engineering. It is say, creating ads or graphic designs. These are hard. These are material technical skills that most people are not good at. So if you are really good at coding, well, you can now create things, right? You can create a web app. You can create a web site. You can create, let's say AI or a large learning model or machine, right? So you can create these things with this skill. And this is a hard material skill. It's material because it's quantitative. It can be measured, right? You can create something very visible using X amount of lines of code and Y amount of algorithms and so on. The same applies with, say, your physics knowledge if you're an engineer. Same with ads, graphic design, and so on. The alternative is your soft skills. Soft skills are things like leadership and your ability to sell and negotiate. And these can still be, there still can be metrics that are used to describe these, but they are quote-unquote soft in that there's some more wiggle room there. Like if someone is a good leader, it's hard to measure why they're a good leader or how good of a leader they are. Again, that doesn't mean you can't figure out what makes a good leader a good leader and not maybe they say have a daily sync with their employees or they listen to people about their problems. But compared to something like code and engineering, you don't need a lot of technical training to become a good leader. Some people just are good leaders, whereas no one is born as a good coder. So generally, we can break down your situation and the amount of money you're going to make in terms of hard and soft skills. And the more hard and soft skills you have, either all hard, all soft, some combination of those, the more value you can provide to customers or to an employer and the more money you're gonna make. Right now, if you don't have those skills, if you don't have a unique skillset, you're not gonna make much money. That's just the fact of the day, unless you get really, really lucky. But you shouldn't play to the exception, you should play to the rule. And the rule is the more skills, the more unique skills you have, the more unique value you can create and the more the market will reward you for that. So right now, if you wanna make more money, the way to do that is, okay, just pick a hard skill or a soft skill and go out and work on those. And over time, the more unique your skillset is, your ability to earn money will exponentially increase. And by that, I mean, if you're just as good as a coder as everyone else who codes, if you're the average coder, you're sure you're gonna do a lot better than someone who doesn't code, right? Or doesn't have a hard skill. But if you're the 99th percentile of coders, well, your income doesn't just go from, let's say, 2X what it was to, if you were, say, in the 80th percentile to say 4X, if you're in the 90, it goes to, well, now you're gonna make a hundred times more. Now you're gonna make a thousand times more. So the more skills you have, the more money you're going to make through any number of these. Generally, I'd recommend, if I had to, just selling as a semi-soft skill. If you can sell over the phone, if you can sell in person, that is just a core ability that will really translate into everything you do. On the side of hard skills, generally knowing your way around code is very valuable. Otherwise, things like graphic design and ads are also very valuable just generally today across most of what people do. That's my general spiel on making money and approaching that conceptually in relation to value. What I wanna touch on now is some material aspects of earning money. The first of those is entrepreneurship versus a nine-to-five. I think there's a lot of stigma on both sides of, oh, you can start a company versus, oh, you should go and work a nine-to-five. Generally, I think that's just a reflection of you, that is what you want and also what you can do. Sure, starting a company is great in that if you keep doing it for long enough and you are good at what you do, you're gonna make a lot of money, probably more than someone who works at a minimum-wage job. That doesn't necessarily mean it is better to start the company. There are a lot of risks there. There is a lot of stress there, and there's the risk that you fail and also, say, you can spend less time with your family and so on. So there are trade-offs to all of this. There is no right answer. You shouldn't feel pressure to be pulled in either direction. It is just, well, what do you wanna do? What do you wanna create? And where do you see yourself? What's the lifestyle you want when it comes to entrepreneurship versus a nine-to-five where you're employed by someone else? Now, in terms of starting a business, I wanna cover a few types of businesses. First, we can think of non-profits. Non-profits are any sort of business that does not directly aim to turn a profit and distribute that to stakeholders and really doesn't aim to maximize its own profits. Then, in terms of entities, and these are companies you're either gonna run into or you may start if you choose to start a business, there is a sole proprietorship, right? So that's just right there. There's a lot that goes into this. Generally, if you are a sole proprietor of a business, that is something that you're doing without it being an actual entity. So if you run a sole proprietorship, you own that business, you're doing something, but you don't have to file it with the government. That's very useful for taxes because you can be doing something in an economic sense and you can take write-offs, depreciation, you can get tax benefits from starting a business. There's also an LLC or a limited liability company. This is sort of the most basic form of business entities. An LLC can be single member. If it's single member, it's just one person. Multi-member is many people. And if you wanna start a company, this is a great way to protect yourself from liability. What that means is if you run a sole proprietorship, you are the business. That means if someone sues you, they can take everything you own if the damages, if what you cost them are that amount. Meanwhile, if you run an LLC or a limited liability corporation, the LLC is a person in a sense. It is its own entity. So if you mess up a contract and someone sues you for a million dollars and you only have $80,000 in the bank, well, instead, they're actually suing the LLC, right? And if the LLC is $20,000 in the bank, the most they can take from you in the million dollar lawsuit in most cases is the $20,000 and is the assets of the limited liability corporation, right? It's in the name. It is limited liability. So in that sense, well, that is really why most people go for an LLC versus say, just run a sole proprietorship. Most of, pretty much anyone can get a, in any state can get an LLC for anywhere from a few hundred bucks to start it up to say $800 a year in California and a few other states to continue to operate it. You also see a few other business structures. You see S Corp, you see C Corp, and then you also get things like your B Corp. B Corp is kind of a combination of a nonprofit and a for-profit enterprise. So it is companies that have a mix of say social purposes and also profit maximizing purposes. Your corporations are the structures that you hear like your Apple, your Nvidia, your Teslas go off of, right? So most of those are going to be C Corps in addition in part to LLCs, but C Corporation are your, most of your big companies. You also see S Corp, which is just a smaller version of your C Corp. So your really big enterprises. I now want to cover just a few tips when it comes to personal finance or earning more money at a job. And then also just businesses you can start if that is the route you want to take. When it comes to your job, again, it is a function of skills and value. So just try and do more and try and do unique things. If you're assigned to a project at your job, well, just put in 10% more effort and create something that your employer didn't think you'd create that no one else on your team is going to create, right? And if you do that, you're going to stand out. You're going to get promoted faster and so on. Also, if you switch jobs, in some cases, if you're, say, an engineer, the more you switch jobs, the more you're going to get paid. On average, if you do have a skillset and you work at Tesla and then you go to Apple, then you go to Facebook, then you go to Snapchat and so on, you're going to get paid more every time. That only applies at a certain income threshold. That doesn't apply for, say, minimum wage. But generally, the more experience you have, the better off you're going to be. Also, again, just try and do different things than the people you're competing against, either for a job, in a job interview, while you're at the job, et cetera. If you can just do different things and stand out, you're going to get promoted faster, you're going to get more opportunities, and so on and so forth. Now, in the case of starting your own business, I'm just going to take a minute to write out a whole lot of businesses you could start or just genres of business, in a sense, and then we'll just briefly touch on all of those. So here are eight sort of genres of business that you can start. We have e-commerce, an agency, affiliate or affiliate marketing, retail, an info product, a consumer packaged good, or CPG, content, and then a hustle or a side hustle. To begin just with a hustle, right, that is a side hustle, that is your dog walking, your curb painting, your lemonade stand, right, as the trope goes. Generally, these are going to be things that don't require a lot of skill to start or get into. It's easy to generate cash with them. As in, if you want to wash cars, here, he's going to get a rag and a bucket of water and some soap, and then you're going to go around to houses, you're going to make 20 bucks in the next hour, right? The best side hustle that I know for anyone, especially those who are young, but really anyone, period, is curb painting. A good friend of mine and a partner as well, he was making eight to 10 grand a month in high school, right, just painting curbs. I know that sounds crazy, and he put a lot of hours into it. It's not like it's an easy thing, but you can make a lot of money with side hustles. I also started out just reselling on eBay, on Nextdoor, and so on, and that was just going to garage sales, buying certain items, and then flipping them or selling them for more on those other platforms. So these are a really, really good way to start off. If you make no money and you want to make $1,000 next month or $100, whatever the number is, a side hustle is a great way to do that and build skills while you do it. For example, if you paint curbs, you have to go door to door. You have to say, hey, can I paint your curb number for 20 bucks? And then you get that skill of selling in addition to the money you derive from it. Then content, right? That is creating media. So this could be starting a blog. It could be creating social media theme pages. It could be a personal brand, like vlogging on social media, like what I'm doing in this video, right? All of those are content businesses. Again, there's a lot of great opportunities there as well because the world really does run upon social media and content nowadays. I think what's really nice about content especially is that it works for you over time in that if you make one video, one YouTube video, you can put an hour into making it or 10 hours, whatever the number is, but then you put it out there and you're done. Assuming you have an audience and apart from marketing and so on. Generally, that's gonna keep working for you. People are gonna be watching that video. It's gonna be making ad revenue for years in advance. And same with getting followers on a social page and so on or just readers on a blog and that blog ranking over time. In that way, starting content businesses gives you leverage because you create one piece of content and then it goes out there and works for you and it's passive in that sense. Then we have CBG or consumer packaged goods. That just means creating a physical product, a food item, whatever it may be. As in there's a company we're gonna start working with soon at a business of mine. They spent about a year creating a health product. I won't say what it is, but it's generally an item that they actually invented. They're working with manufacturers to create it and so on. So if you do anything like that, well now you're creating a physical product that you can go and sell to people. Generally here, my advice is very similar in that we'll just make sure that people actually want this thing, that it solves a problem. And if it does solve a problem, then people will pay for it. The market will return that value to you over time. Then we have info products. These are things like books, like a course, anything in which you are selling fundamentally information. Even if you go and teach a class at a local say senior center, you teach them how to use technology, you are selling an information product. The same applies if you create courses and you teach people how to do something. These other four businesses, first is going to be e-commerce. This is selling things digitally. So dropshipping was very popular for a while. That is a form of e-commerce. And then e-commerce as well is just, let's say buying a product from China is what most people do and not what you have to do. But then say creating a brand out of it. So let's say they buy hoodies and they create a surfer brand out of it. They have a cool logo and a cool name. They have some content. They have a cool story and mission around it. And then they sell those on the internet. One point I want to make as well is these should be combined. Ideally, they are combined. So if you create an e-commerce business, you're going to be using your contents because you're going to be creating content to sell the brand and the product. Maybe you're also, the e-commerce is for selling a consumer packaged good and so on. So these do intersect. The sixth business or genre is the agency model. This got popular with Iman Gatsy and a lot of those sort of influencers. What this is really is selling a service. Typically people get customers for an agency by cold calling, cold email, or ads in addition to referrals. So people use these methods to sell a service. For example, a marketing service for a business or a maintenance, say like creating websites for a business. And if you're creating websites for a business, you have an agency business where they pay you monthly to go do that work for them where they pay you a one-time fee. The second to last one here is affiliate or affiliate marketing. What this is is selling other people's products. So if I created a $80, say, course, right, a lot of people like, but I don't wanna go out there and sell it. So instead of what I'm gonna do is I'm gonna say, hey, why don't you sell this for me? If you sell it for me for every $80 course that you sell, I'm gonna give you $40. And that is the business of affiliate marketing whereas you can go, if you're really good at ads, if you wanna go door to door and sell a product, they're gonna give you say one half or one 10th or 100th, whatever it is of that. So this ties back to what I was saying earlier of that selling is a really, really valuable skillset because, well, if you can sell well, you don't need your own product. You just become an affiliate marketer. You sell other people's products. And that is functionally what salespeople do even when they're hired by an employer to do that. The last one is retail. This is just gonna be any business with a physical location where you sell to consumers or customers. So have you start a local coffee shop, a bookstore, a clothes shop, and so on. Those are all retail businesses. Now, all of these businesses are just fantastic ways of making money if you wanna start your own business. You can also think about the type of company you wanna work for if that's what you wanna do. So if you really like content and social media, maybe you want your job to be something in the domain of creating content for other businesses. So these are businesses you can start, but also skills and areas that you can get good at, that you can build those skills in. That covers the earn section and earning money. Now we're going to get into spending money. I am gonna go quicker here because we don't have that much time. Now with spending, the idea that I wanna get across here is that you fall to the level of your systems, right? Money inherently is an emotional thing. It is something that emotionally affects you because things you want cost money and things you don't have cost money. And everyone wants something. Whatever you want, you can probably get with money. And if you're feeling bad, right, you can probably get quote unquote happier or feel slightly better with money. What that means is when it comes to spending money, you wanna break down how you spend money into systems. For example, budgeting is a form of a system because if you are only allowed to spend $600 a month, well, how do you actually go about only spending $600 a month? You set your budget first off, you plan for that. And then maybe if you have $1,000 paycheck, you set it, you set $400 of that to immediately go to a brokerage account so you can invest it, right? And in ways like that, by setting systems, by putting barriers between you and your money, automatically, you can stick to the amount of money you wanna spend and spend it how you want to spend it. So automatic payments are an example of that, whereas if you get a paycheck every two weeks for $3,000, you can set some amount of that to automatically be sent to an investment account. Another way of doing that is just by, say, removing cards from your phone from Apple Pay. That way, it's harder to spend your money. You're now creating a system that doesn't involve you that makes it harder for you to spend your money. So generally, just create those systems and then focus on spending, not necessarily less, but focus on spending what you want or on things that are valuable as well, right? So this ties back to assets and liabilities. Generally, if spending some amount of money on something is gonna make you more money if you're buying assets with it or things that will become assets, great, spend money on that. If you're buying a bunch of things that will only cost you money, well, you probably shouldn't be spending as much money on that when it comes to spending. And most people, or excuse me, most often when people have problems with what they're spending money on, it is because they're buying things that aren't gonna make them more money. They're going out at night, they're going to nice restaurants, they're buying nice cars or whatever it is, they're buying things that will cost them money and that's when they need to put those budget controls and spending in. Also, don't forget about you as an investment when it comes to spending money. You aren't gonna see a direct return there, but you are an asset as well. So spending money on yourself is sometimes worth it if you do that in an intelligent way. For example, that shouldn't be an excuse to not just go on YouTube and learn something for free. Now we're gonna touch on the last section here, that is investing. Again, money as a whole and personal finance breaks down into, well, you earn it and then what do you do with it? There's a lot of things you can do with it. You can spend it, you can save it, you can invest it, you can do this set of things with it. And investing is deciding essentially what to do with the money that you have, that you've already earned. I made a whole video on the stock market that's what, like two and a half hours long. That's gonna break down a whole lot relating to not just the stock market, but also asset classes and different ways of investing as well. So I'm not gonna do a deep dive here and you can watch that video right now on the top of the screen. But I'm gonna cover a few central ideas about investing. The first is that investing will make you a lot more money over time and is a deeply necessary part of personal finance. And that is because of inflation and I've covered this again in other videos, so I apologize if you watched those. But if you just save money, if you put that in a checking account, if you keep it in cash, it's gonna grow linearly, right? If you put $100 a year into a savings account or let's say you take $100 a year out in cash and put it under your mattress, right? Because you wanna say send your kid to college in 10 years. That's gonna grow like this. And that's only gonna grow when you put effort into it. When you go to your job, you work for $20 an hour, you take $2 of that times 100 hours and you put that 200 bucks say every two weeks into that. That's gonna grow linearly. If you invest, your money can work for you because when you invest, you're buying assets that increase in value or make you money. And very, very often, if you invest correctly, right? Those things don't require your time. And say, if you buy a stock and the company increases in value, you didn't work for the company to increase its value. But since the company increased its value, it's making more money, the stock price went up, you just made money. You just made money without working for it, without putting in time. And that doesn't mean you can just magically make a bunch of money with investing. You do have to put effort into it. But what it does mean is that over time, right? It's gonna look like this. You're gonna be in a position where your money works for you without you trading your time for money. And you're gonna have a lot more of it down the line. So that's why investing is so valuable. And that also ties into the idea that you should invest for the long run, right? Investing is not something where, let's say this is years where you're just gonna do it for a month and then you're gonna stop, right? And then you do it for another month over here, then you're gonna stop. Investing is powerful because if you do it over long periods of time, it works for you. Your money makes money and that is what makes you wealthy. So in that sense, the best way to approach investing is in a systemic way. It's by creating systems, just like in the case of spending. So for example, that could be, I'm gonna take $200 every month out of my $5,000 paycheck and I'm gonna put that in an investment account. And in that investment account, maybe I'm gonna buy a set of stocks or I'm gonna buy a set of bonds. If you create a system like that, well, now you're gonna put $200 in every month for the next 30 years. And if you do that, who cares if the market goes up 5% this year and down 6% the next year? If overall it grows at say 5% a year, it will look like this. You will get that exponential as opposed to linear or a line growth over time. So invest for the long run and invest with your goals in mind. And also as a final note there, invest based on what you like or what you want to put effort into. And by that, I mean, if you invest in things that you don't know about or that you aren't very good at, you're gonna have generally a subpar time. You're not gonna make as much money as other people in it. But if you invest in things that you like and that you put time into and that you become good at and make in and have skills in, right? That is when you're gonna make great investments and have great returns. So if you like investing in the stock market, like let's say you love stocks. Well, great, go buy a bunch of individual stocks and maybe that's how you invest. But you don't have to like stocks. It's fine if you don't. If you don't, well, you still want to invest because that's gonna be much better for your financial health and the amount of money you're gonna have. Oh, but maybe you just buy one index, right? Say like the S&P 500 or QQQ, right? These are buckets of stocks. We also covered that in the stock video as well. But if you do that, you're still gonna get a lot of returns and you don't have to put the effort into that you would if you had to force yourself to research a lot of individual stocks. The same applies to say real estate. If you just like owning properties and renting to people and renovating yourself and that's what you're good at as well, you can make a lot of money by investing in real estate. So go and do that. But if you really just like real estate, don't invest as much money there. That doesn't mean you shouldn't diversify, which just means you should spread your money out so that if one investment decreases in value, you weren't totally screwed over. So let's say gold over here, stocks and bonds and so on. If you don't know what bonds are, stocks are, any of that, again, you just go watch the video. But generally, if you invest in different assets, you spread the risk around. So overall, you're gonna be safer and make just good returns every year. But again, if you really like precious metals, maybe just put a little bit more of your money into precious metals. If you really like real estate, we'll still try and diversify within real estate, but maybe you're gonna put more money into real estate. There also are gonna be some accounts that you're going to want to invest through. So Roth IRAs, your Roth, your 401ks, those are example of, here, I'll just write that down. Those are examples of accounts where they're tax-advantaged accounts. So if you put money into accounts like these, so say your Roth IRA, for example, and you've probably heard this term, in some way or form, you're gonna save money on taxes. For example, you're gonna put money in, you can invest it in those accounts, and when you take it out in 30 years, you are going to not pay taxes on it. So you're gonna save a lot of money there. So it's a very core piece of financial advice that you're gonna hear often is just, well, max out your Roth IRA. The actual structure depends on whether you're employed or not employed or you wanna buy a house or retire or so on. I suggest you research those yourselves, but those are absolutely accounts that you should have. Now, generally, I wanna touch very briefly on asset classes, right? Real estate is one of those stocks, or really equities is another one. You also have debt instruments like bonds. You have precious metals like gold. You have collectibles, so that's, say, valuable watches or cars. So these are all different ways in which you can invest your money. Now, I already said invest in you. I wanna touch back on that in that, again, if we think of your earnings potential, the amount of money that you're gonna make as a reflection of value, then if you work on your skills and focus on being able to create more value to customers or to a business, you're gonna make more value, and then over time, the amount of money you can make, your earnings potential, regardless of luck, just your skillset, is gonna go like this as well. So you are something that you should put effort into, that you should focus on learning more and creating unique things. If you do that, the market will reward you, and then you'll have more money to invest. And at the end of the day, if you're just flat broke, if you have, say, 200 bucks to your name, that's fine, but $200 isn't going to, even if you invest it, that isn't going to make you wealthy or get you to a point of financial freedom. Instead, spending that $200 on changing your ability to earn money. So if before you can only make $15 an hour, and now you spend the $200 on a few books or courses or so on, and you learn how to, well, now make $30 an hour, or how to start something that can make, ultimately, say, $1,000 a month, then, as opposed to this trajectory with $200, you get this trajectory, right, with $1,000, say, or $1,000 a month and so on. So focusing on making more money, in addition to investing money, is what will get you to that point of financial freedom. Now, there's a lot more in investing, like, seriously, but that is just what we're going to call it with here. I do suggest you watch the stock video or just put anything you want me to dive into in a more in-depth manner in the comments. With that being said, we've now covered those four major segments of the video. So you're learn, earn, spend, and then do I have space, invest, right? As a last note, I am giving away a number of the books that I have written on personal finance-related subjects. If you want to see those, you can just go to the link in the description, and you can download them just totally for free. There's also a Google Drive I have with a bunch of free resources. Other than that, not just with investing, but with personal finance, there's a lot more there, but I think if you do understand the things in this video that were touched upon, you will be in a much better position moving forward. So just put whatever in the comments that you do want me to do a deep dive on or if you have any questions whatsoever. And with that said, I will see you in the next one.