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How your coffee could be worth 拢464,000! (EP. 1 - 100 Ethical Wealth Hacks) - YouTube
Channel: IslamicFinanceGuru
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so this is a three pound Costa Coffee
this is a hundred pound jacket and this
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is a five pound burger if we were to
invest them which one would bring us the
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most money so I don't actually mean
invest a burger that would be silly hi
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is that HSBC yeah hi I'm looking to
invest with you guys how much so I've
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got a burger I'd like to invest a burger
yeah yeah a burger with ketchup hello
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hello
I think they hung up on me. So the idea
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is that we partake in lots of luxuries
but what if we invested that money
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instead what would be the best luxury to
do without let's find out. So the first
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thing we have to work out is how much
are we actually spending on this stuff
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in a year so let's take coffee three
pounds every coffee
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seven eight coffees in a week that's
about twenty twenty-five pounds in a
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month that's going to add up to about
hundred pounds in a year that's 1,200
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pounds where the burger let's say you
spend about you know four four burgers
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in a month that's about twenty
twenty-five pounds in a year that's
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going to add up to roughly 240 250
pounds and then with a jacket unless
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you're a bit of a freak and you want to
buy lots of jackets people normally buy
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one jacket so that's going to cost
around a hundred pounds a year so coffee
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is obviously the massive spend in the
year so let's try and save that let's
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try and save that for your entire
working life let's say you've become a
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monk and you've given up coffee for your
entire working career of 45 years how
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much money would you end up saving on
coffee over that time period so the
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coffee alone over 45 years adds up to
fifty four thousand pounds and if you
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adjust for inflation that's 80 thousand
pounds spent just on coffee in our
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lifetime so now what if we invested that
savings on coffee every month into
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investments so this is the compound
interest calculator on the calculator
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site. I'll drop a link below
and what you do let's say you put in 100
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pound to start off with and you set the
interest rate or the profit rate in our
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case or let's say 7% which is your
standard and let's say you calculate
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over 45 years you compound every year as
opposed to monthly so like that's when
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it rolls over and then you regularly
deposit a hundred pounds and let's say
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you increase the deposit with inflation
which is around 2% and then you
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calculate and let's see what happens
so the big numbers that you have to look
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out over all are you end up with in
total four hundred and sixty four
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thousand pounds and just the coffee will
add up to about eighty six thousand
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pounds. Mad. So hang on what what just
happened here? Tis coffee could be worth
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four hundred and sixty four thousand
pounds so what's the secret? So we like
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to call this the IFG investment laws.
number one invest consistently and
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regularly and number two hold for a long
period of time. Beta that sounds really
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boring
give me a get-rich-quick scheme. So
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there's no get-rich-quick there's get
rich slow like the 1% I mean look at
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this graph of Warren Buffett's wealth it
only mounts up significantly over time.
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Why? So the benefits of the IFG
investment laws the reason why the 1%
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used these laws is twofold -
compounding and smoothing. So compounding
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is a reason why banks are so rich
because when you keep on reinvesting the
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profits or you keep on RIA cumulating
the interest it becomes a snowball and
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it starts rolling and it picks up more
and more and more and more stuff until
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before you know it it's a massive ball
with Donald Trump's hair on top of it
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and so with smoothing....look markets are
really choppy and volatile over the
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short term but over the long term they
trend upwards so if you hold for a long
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period of time you're going to benefit
from that upward trend. That's it for
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today guys thank you for watching
remember IFG is here to help you make
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money and save money and please do
subscribe to our channel to hear about
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all of our
investment tips and saving tips here
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first and leave us a comment if you'd
like us to cover anything we'd love to
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know. Salam!
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