How to Manage Your Money like the 1% (Do THIS every time you get paid!)

You know that most Saturdays I come on here and give you the highlights of news of what happened over the past week. Well, this week I'm in Australia for business and for some vacation with the wifey, so I pre-recorded this video before I left. We all know what happened earlier this week with the Fed rates, and I promise I will touch on that in next Saturday's video. Not only that, I'm going to tell you exactly what I'm gonna be investing in next week because of the Fed decision, and it's gonna give me a little bit more time to break out all that information and be able to give you a very solid highlight. For today, I've received this question so many times as to exactly how do I manage my money and divvy up my paycheck. So in this video, I'm going to explain how I did it before I had an emergency fund built up or was maxing out my Roth IRA, and then also I'm going to show you what I'm doing now, currently in 2025. It should be helpful to you no matter if this is your first finance video that you've ever seen, or if you're a multimillionaire and you're just figuring out how is the best way that I should cut up this paycheck or this income so that you can get very, very rich. Before I go into that, each Saturday I do also answer a question from the comment section in the Saturday video from before. So let me start there, and then we're gonna get into the main concept for today's video. This person asked, I saw a recent interview of Tom Lee speculating that we could have a bull market until 2035. What are your thoughts on this? Well, I do agree with the person that commented right underneath that question saying that Tom Lee is actually pretty spot on. We have to remember that sometimes he does get it wrong. More recently, like in the last year or so, he was really, really big on small caps and saying that those are gonna be the things that outperform by a landslide, and we're still waiting on that. He is fun to watch, and he's pretty much always saying that the stock market is not only going to go up, but it's gonna go up like crazy. And so for us investors, we need to be careful because hearing this makes us excited. We like things that go along with our own bias and hope, so we wanna believe that Tom Lee is telling the truth. So I just looked into recently what he's been saying and why he's saying that we're gonna have a bull market until 2035, and what I found was actually pretty spot on. Tom Lee identifies a historical pattern where US bull market peaks have coincided with the peak participation of major generational cohorts in the workforce. Baby boomers peaked around 1999, Gen X peaked around 2018, and millennials are expected to peak around 2035. These generational waypoints align with market highs. Thus, as millennials reach their prime working and spending years, Lee expects the bull cycle to continue until around 2035. He also cited specifically the technology and AI boom that we are still yet to experience. Technology leadership. US-led expansion in AI and blockchain is expected to drive major gains, particularly in sectors like finance and healthcare, boosting their share of the S&P 500 significantly. What are your thoughts on that? Comment down below or comment a question that I can answer for you next week. Or if you'd like, comment on how you specifically manage money and how you divide up your paycheck so that we can help others and so that others have a library of not only my thoughts, but also what all of you guys think. All right, so when I started out on this personal finance journey, I didn't have a fully funded emergency fund. I didn't even have a Roth IRA or any type of retirement account. So here's what I did at that point. And just as a recap, I believe that there's certain tiers that people need to hit in order to move on to the next level. So tier number one would be taking the 401k match at your job. It's literally free money. If you make $60,000 per year and they say they're gonna match your contribution up to 3%, then that means you're gonna put in 3% of your paycheck, which will be around $1,800 per year. And then they're gonna give you an additional $1,800 per year. So now you don't make $60,000, you make $61,800. Tier number two next would be to do everything you can to save at least $1,000 in an emergency fund. This is not a small number, but it's definitely not an absolutely huge number. So this is doable. If something big comes along and you need $1,000, but you don't have this saved up, you'll have to put it on a credit card or something that has 20% interest and that will really hurt you long-term. Tier three, this third step would be to start adding towards a Roth IRA. The Roth is the most powerful retirement account for so many reasons. So I'd work toward maxing that out every year. The other really good thing about the Roth IRA and the reason why I put this here before adding more to that emergency fund yet is because you're putting money into the Roth IRA, it's growing tax-free. So hopefully 20, 30, 40 years down the road, that amount of money has grown to so much and it's all tax-free. But the huge thing here is it's almost like another savings account. At any point, you can pull out as much money as you'd like that you've contributed into the Roth IRA. So if you've put in like $50,000 to date and something crazy happens and you don't have an emergency fund that has quite the amount that you need in it, so you need an extra $5,000 from somewhere, you can definitely take it out of your Roth IRA penalty-free because you're allowed to take out anything that you've contributed to it. So this is kind of like a souped-up savings account that hopefully you never actually use, you never actually take out any of your contributions, but it should give you peace of mind because there is money there. The fourth tier, next I'd be adding simultaneously to two places. So if you have an extra $1,000 each month, you'd put $500 towards that emergency fund from before to grow that. The goal there is three to six months of living expenses in an emergency fund long-term. Then the second $500 would go to a taxable brokerage account for more liquid-style investing. Number five, the next tiers differ depending on your life stage and needs, but somewhere in here would be things like adding to an HSA, 529 plans for kids, maxing out the 401k at this point, and then more diversification into other appreciating assets like possibly Bitcoin or gold or real estate. So now you understand the tiers and where I would say that you'd wanna put your money. And so when I started investing and I literally had nothing yet, this is how I did it with my paycheck. I'll always start with my tithe. I'm a Christian and I firmly believe that God has blessed me in so many different ways, and so giving back 10% to him is just a no-brainer for me. So that was 10% of my paycheck. My living expenses equated to about half of my paycheck back then. So now I'm at 60%. I wanted to pay down my school loans and I had a business loan for my first business that I started at the time, and that was about 25% of my pay. So now I'm at 85%. The last 15% I used to fund the emergency fund until I hit $1,000. Then I used that to start to put towards my Roth account. I wasn't making a whole lot of money in my first couple of years as a business owner back then, so I didn't really ever get past that stage for those first couple of years, but I did add extra to my emergency fund when I could. I'm glad I was adding to my Roth IRA back then, even if it wasn't being able to max it fully out because compound interest is on your side and time is your most important ally. But now I'm in a whole different place. And now I do have a fully funded emergency fund. I do max out my Roth, usually right at the beginning of the year or end of the year, and I do this process called a backdoor Roth IRA based off of my income limits at this point. So now my monthly looks much different. I promise you guys, it's not fun, but once you get that emergency fund totally fully funded, and now you don't have to put any more money into savings if you don't want to, that investment starts absolutely skyrocketing and snowballing to become huge very, very quickly. So now, right now in 2025, here's what it looks like with my income and my paycheck right now. And I know I keep saying paycheck, but obviously whatever it is or however you bring in income, what I'm talking about is my full amount of income. I have a bunch of different income sources and in a video coming up, I'll talk about all my different revenue streams, but right now I'm a professor. I also own a jujitsu gym. I have this YouTube channel. I do private financial coaching. I do corporate finance coaching. I run an exclusive Patreon group and I have real estate income from rental properties. I obviously do make considerably more money now than I did way back then. So my living expenses definitely make up a much small portion of that income. My taxes right now are insane, but that's a whole different story. So first here's my tithe again. I still give 10% and I'm very happy to do so. Next, my living expenses come out to about 20% of my take-home pay. Then 5% goes into a separate savings account for my wife and I to go on vacations or for experiences. We don't really buy a lot of material things, but going out into the world and experiencing new things is definitely something that we both love very much and it's something that I will definitely spend my money on every single time. So with the vast majority of my take-home pay now, I just invest most of that in a couple of different ways. About 50% goes to my brokerage to invest in the three fund portfolio plus a small number of individual stocks. Then 5% goes towards crypto for Bitcoin and Ethereum. 10% goes into a separate savings account outside of my emergency fund and outside of the vacation fund. This is for my next business ventures that I don't even know about yet, but that I know are gonna come across my desk or for opportunity when the stock market dips like crazy. I love to start and scale new businesses, so if something cool comes across my table, I would love to take a consideration on it. Or if the market drops like crazy, like it did in April of this year, I'll deplete about half of this account and I did do that this last April and it worked out quite well. Again, I'd like to hear your thoughts. How do you manage your money or what did I leave out? Comment below and I'll see you next Saturday. Watch either of these videos to keep you going strong and investing. Remember to keep investing simplified.