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How to Retire in 7 Years Starting with $0 - YouTube
Channel: Mark Tilbury
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hi guys it's mark i believe the biggest
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reason most people don't achieve early
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retirement is that they were never given
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a step-by-step guide the only path that
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seems to be pushed in schools is to get
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a 9 to 5 job save your money work until
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you're 65 and finally retire when you're
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too old to enjoy it luckily one of the
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businessmen i looked up to explained it
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in a slightly different way he said the
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word retirement should be replaced with
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the word freedom because once you reach
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a tipping point when you have enough
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money to stop working you have true
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freedom every day you can do exactly
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what you want no questions asked maybe
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that's relaxing on a beach sipping a
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pina colada or building businesses that
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change the world like elon musk when you
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have the ability to retire it's entirely
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up to you how you spend your time so on
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that note today we're going to discuss
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the plan i use to reach my retirement
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goal in my late 20s starting from zero
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dollars this may be a little extreme for
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some people but that's just me i'm
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either 100 in or i'm not in at all
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obviously you can take this plan at your
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own pace and who knows maybe you'll even
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beat me we'll get into all of this right
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after you hit that like button for the
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l2 buga rhythm as it really helps push
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this video to more people also make sure
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to subscribe if you want to grow your
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wealth phase one is all about your
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freedom figure this is the target you
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have to reach in order to have full
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control of your life this is something
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you should know even if you've got zero
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dollars in the bank if you don't know
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your freedom figure then it's a bit like
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being blindfolded in a running race you
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can't see where you're going so you may
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end up putting all your efforts in going
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in the wrong direction or even tripping
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up and falling flat on your face the
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reality is there are three types of
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people in this world there are doers
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dreamers and drifters otherwise known as
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the 3ds actually thinking about it when
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i was at school they gave me a cap with
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d on it they must have known i was a
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doer so let's start off with drifters
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they go through life living paycheck to
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paycheck without any financial aims they
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don't really see the point of saving or
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investing money as retirement feels like
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it's not something a young person needs
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to be thinking about dreamers do have
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financial goals but they don't have any
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plans in place to actually achieve them
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so they will forever just stay dreams
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and finally doers they have financial
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goals but most importantly have a plan
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to reach them and that's where your
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freedom figure comes in this is a very
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individual thing and it all depends on
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how much you want to pay yourself each
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year when you retire it's actually a
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great way to figure this out and it's
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called the times 25 rule so let's
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firstly assume you want to make fifty
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thousand dollars per year without
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working secondly we would need to
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multiply 50 000 by 25 which gives us
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1.25 million dollars the idea is that
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you're able to withdraw four percent of
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this per year without ever running out
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of money and you guessed it four percent
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of 1.25 million dollars is 50 000
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1.25 million dollars how am i ever going
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to get that in seven years this video's
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a lie i know this may sound tough
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especially if you're starting from zero
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dollars but it is possible no one said
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it's going to be easy but with the right
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approach it can be done i mean if i can
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do it then so can you in the early
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stages of your retirement plan the way
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you think about money is crucial it's
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all about getting the right mindset in
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place the key is to prioritize building
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wealth over cash flow this is because
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building wealth is about locking your
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money away in assets that increase in
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value whereas cash flow gives you more
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money flowing into your pocket now this
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may sound great but it can lead to a
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variety of problems such as lifestyle
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inflation and sky high taxes cash flow
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is extremely important but more so later
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in life once you start to unwind this is
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why whenever i made some extra cash when
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i was younger i made sure to reinvest
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the majority of it of course i get it
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sometimes it can feel really nice to
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secure some profit and lock it away in
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your bank account it can give you a full
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sense of security knowing you've got all
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your money sat in your account for
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whenever you need it but the reality is
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you often don't need as much money as
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you think forming a habit of reinvesting
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your cash flow is absolutely essential
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when it comes to building wealth as fast
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as possible and hitting your freedom
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figure phase two is laying the
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foundations this is kind of like
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building a house you need to lay a solid
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foundation to ensure your house doesn't
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crumble the first sign of an earthquake
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unfortunately seventy percent of
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millennials now live paycheck to
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paycheck which means they're building
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their lives on an unstable base just
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like building a house on quicksand if
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you find that unbelievable then this is
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even more shocking forty percent of
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americans with an income greater than a
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hundred thousand dollars a year are
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still living paycheck to paycheck this
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just goes to show how important laying
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the foundations are and even though it
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may seem simple many people are failing
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at this phase there are four stages i
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considered when i was in this phase
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during my early 20s the first stage is
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paying off high interest debt it's
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crucial to pay this off before you even
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consider investing your money as high
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interest debt is holding you back but
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saying this it is very important to
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understand the difference between good
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debt and bad debt good debt is anything
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low interest that makes you money for
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example the mortgage on a rental
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property or low interest finance on a
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laptop to build an online business bad
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debt is high interest debt that doesn't
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make you any money for example shopping
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for clothes on buy it now pay later
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credit card debt or even a typical bank
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loan all of this debt needs paying off
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as soon as possible i was in quite a lot
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of debt when i was 18 and in order to
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get out of it i used the debt avalanche
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method which involved making the minimum
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payments on all my high interest debt
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then i used any extra money to pay off
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the debt with the highest interest rate
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first which was my store credit card at
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32
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crazy i know signing up for that was a
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huge mistake which i've talked about in
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some of my past videos i then worked my
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way through the bad debt with the lowest
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interest rate which was my car loan at
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around 15 of the time within a year i'd
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managed to get everything paid off the
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big lesson here is you can't invest to
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build wealth when being weighed down by
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bad debt stage two is putting aside an
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emergency fund this is essential for
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your foundations as if you start
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investing without an emergency fund you
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might find a few months down the line
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you get into a spot of bother with an
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unexpected expense and no cash to pay
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for it you will then have to pull your
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investments out to cover the expense and
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then you'll miss out on the potential
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profits stage three is building a great
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credit score a credit score is a bit
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like your resume it follows you around
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in life is regularly updated and it
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helps lenders decide whether you're a
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worthy borrower having a good credit
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score is especially important if you
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ever want to get a loan in the future
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for example to buy your dream house you
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just never know when you're going to
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need it i should have actually started
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building my credit score a lot sooner
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than i did because it's so easy to get
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started all you need to do as soon as
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you turn 18 is get yourself a credit
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card start putting a few little expenses
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on it like gas and pay that baby off in
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full at the end of each and every month
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this way you pay no interest and prove
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to the lenders that you're a reliable
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borrower stage four is reducing your tax
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liability every dollar you earn has
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hidden costs of all the expenses however
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taxes can sting the most and take the
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biggest bite out of your money noah
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likes the tax man the good news is that
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tax efficient accounts can minimize how
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much tax you have to pay and maximize
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your savings in my early twenties my
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income was really starting to get eaten
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up by taxes so i started looking for the
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best ways to save as much as possible i
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then discovered if i opened up a
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retirement account then i could save
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money i hadn't paid tax on this is known
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as a 401k in the usa and a sip in the uk
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of course i will eventually have to pay
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tax on this but as i'll be older i'll be
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in a much lower tax bracket because i'll
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be earning less so hence i should save
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quite a lot of money but i didn't stop
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there i opened another account that
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allowed me to save money that i'd paid
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tax on but in the future i wouldn't have
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to pay tax on my capital gains or in
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other words all the money that the money
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generated this is called a roth ira in
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the usa and an isa in the uk i firmly
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believe that everyone should set up both
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of these accounts as soon as possible as
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i know it really reduced my tax burden
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so once you've built up these solid
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foundations it's time to start expanding
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phase three is building multiple income
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streams i like to think about it like
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this imagine spider-man is you the
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platform is your life and the skittle is
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your everyday job if you get fired guess
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what's happening
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now imagine this spider-man is you the
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platform's your life but now you have
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multiple income streams the stock market
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could crash you could lose your job or
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your side hustle could fail but your
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life is supported by your other income
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streams this makes it very hard for
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someone or something to come along and
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strike you out a secure job is nowhere
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near as common as it once was with the
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average person now working 12 jobs in a
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lifetime there isn't one perfect
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solution for everyone but something that
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has worked for me over the years is to
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pick side hustles that take advantage of
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my existing skills as i don't have to
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learn something completely new this will
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often end up being something you're
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passionate about as you develop the
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skills without even knowing it sometimes
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we can lean towards what will pay the
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most but when looking to build long-term
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wealth sustainability is important so
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when waking up every morning being
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passionate about your line of work is a
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great idea as richard branson once told
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me over lunch there is no greater thing
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you can do with your life and your work
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than follow your passions in a way that
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serves the world and you well that's
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actually one of his most famous quotes
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but he did say something along those
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lines it was about 20 years ago but one
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thing i do remember all the details
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about was the fantastic spaghetti
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bolognese he made for me there are many
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different side hustles you can start
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such as affiliate marketing e-commerce
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becoming an influencer drop shipping and
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even good old-fashioned window cleaning
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bin cleaning driveway cleaning
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photography the list goes on the main
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takeaway here is the higher perceived
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value you have according to society the
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more you will get paid if you do the
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bare minimum or your service doesn't
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really help people you'll be paid the
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bare minimum it's important to go above
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and beyond and provide value as best you
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can to maximize your profits which can
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then be invested to reach the end goal
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of your luxury retirement phase four is
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creating passive income once you have
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your side hustles and income in check
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it's time to start looking into passive
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income streams side hustle money doesn't
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last forever that's why you want passive
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income streams so your money can make
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more money while you sleep this is why
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the rich get richer this phase is all
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about multiplying your cash and not
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chasing high returns this is why i
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always talk about the importance of
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consistent long-term investing the end
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goal is to be on the beach sipping a
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nice drink not worrying about anything
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money related now i do always say that
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no income is truly passive everything
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requires a bit of work here and there
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but the idea is to get your money
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working for you instead of selling your
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time there is only so many jobs you can
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fit into one week and that's why trading
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time for money has its limits i was
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working a nine to five job plus all the
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overtime flipping cars on the weekday
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evenings working in a shop on saturdays
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and tutoring people on sundays i
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actually had no more time to sell so
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that's when i started looking into ways
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to generate passive income through the
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markets i'm talking stocks real estate
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and cryptocurrencies well maybe not
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crypto back then it wasn't around but
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i'm certainly interested in it now the
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stock market is probably the easiest to
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get involved in especially nowadays
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maybe not when i was younger as you had
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to call up your broker on the phone and
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do all your trades that way now it's all
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done on investing apps these apps also
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have great sign up bonuses public.com
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are currently giving you a free stock
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worth all the way up to a thousand
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dollars if you live in the usa and free
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trade are giving away a free stock worth
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up to 200 pounds if you live in the uk
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i'll leave the links down below if you
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want to pick those up both these apps
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also offer fractional investing which
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means you can invest with as little as
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two dollars this has made it much easier
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for the everyday investor to get
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involved in the stock market it's always
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a good idea to max out your tax
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advantaged accounts before investing
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elsewhere i personally like to put the
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majority of my money into simple
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low-cost index funds which are
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essentially baskets of stocks and like i
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said earlier i like to minimize cash
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flow so i always turn on automatic
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dividend reinvesting cryptocurrency is
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the second error i would focus on as it
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also has quite a low barrier to entry
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with apps like coinbase making it easier
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than ever to purchase crypto coins
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however it's definitely riskier by the
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way coinbase are giving you ten dollars
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a free bitcoin i'll leave the link below
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if you're interested in that i
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personally only have five percent of my
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money in well-known crypto coins such as
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bitcoin ethereum and cardano i believe
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that these are the coins that will stand
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to test the time and i'm not prepared to
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take the risk of betting on a random
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coin that might hit it big like i said
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before my strategy is to get modest
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passive income from the markets and make
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fast money from my businesses real
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estate is the last on the list and this
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is honestly the holy grail of wealth
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building however it is a little harder
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to get into if you're able to save
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enough for a deposit on a rental
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property then you can really start
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unlocking the power of leverage this is
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because you can get a tenant to rent out
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the house which should cover the
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mortgage or while hopefully the house
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increases in value you're basically
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getting your house paid for by someone
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else obviously the earlier you can do
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this the sooner the debt will be paid
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and the house will be yours leverage is
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an amazing tactic used by lots of rich
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people but it can be very dangerous if
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not done correctly this is because you
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can become over leverage which means if
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things go bad and you can't meet
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payments your property could be
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repossessed most people won't tell you
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this but i'm going to be honest this
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step-by-step strategy will be hard to
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achieve if you don't take your own
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initiative and start a profit generating
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side hustle it's still possible with a
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nine-to-five job but maybe not in seven
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years unless you have an extremely
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highly paid job that is also secure a
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nine-to-five isn't at all bad it's just
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most people need a side hustle to
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kick-start that wealth building also
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just a warning for me this is not gonna
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be easy anyone that tells you otherwise
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is lying to you you're gonna have to
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knuckle down like i did and work hard
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for a few years to have a lifetime of
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freedom after all if it was easy then
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everyone will be doing it when you hit
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your first roadblock and i'm certain you
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will just think of it as a challenge to
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overcome and not as a complete disaster
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this plan will only work if you stay
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consistent and disciplined i'm confident
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that after you reach phase 4 you should
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be in a pretty good place to achieve
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financial independence and retire early
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so i'm going to leave the next video
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right up there but don't click on it
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just yet make sure to subscribe if you
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want to grow your wealth and don't
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forget to pick up your free stocks and
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bitcoin with the links below okay i'll
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see you over there
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