when you are 50 54 I know that 55 60 60
we can't go both old Mary can't go as
fast yeah he's older but you're right we
can't go at all I'm gonna work 12 hours
gonna work 14 hours
now that's minute now we were just
having a conversation about how to
manage money I think that's a very very
important topic I thought I was share
this with you I don't know where this
goes but I think I want to give you some
tips that would benefit you as well yes
thanks to food I guess for context for
you guys I came just a few minutes ago I
was showing seafood and lock my finances
right so I was late on my taxes believe
it not many of you might know my story I
was on the verge of bankruptcy a couple
years ago thanks to this wonderful
mentor of mine who helped me to not only
dig myself out of that that mess I was
in but now I'm living a fairly you know
I would say relatively comfortable life
right I think most people would aspire
to get to a position I'm at and I say
that very humbly but now what what to do
next so I was late on my taxes at first
and my corporate tax is my personal
taxes I had to get that mess cleaned up
yes now that that's cleaned up I just
showed you the numbers yeah and I guess
just to put things in for people's
understanding I live in a I don't own a
home yet but I make a multiple
six-figure income I live in a designer
concrete you know home three floors
fairly nice and big I've got a luxury
SUV I know that you always talk about
middle-class buy a lot of you know
assets that are actually liabilities and
actually just got thrown under the bus
here one of them so I thought maybe you
guys could learn at the same time right
because I'm at that stage right on some
of you might be at that stage and well
maybe you're just getting started you
are stuck on this to a school and you're
wondering hey now you you just got your
first job you just have some money
coming in how do you manage it right
because one thing I always say it's not
how much money you make is how much
money you keep right and it's not just
how much money you keep is how well you
best get money right now think back when
you came back to Canada you you were
struggling financially making just tiny
to be the money now now compared to back
then New York you've times ten times yes
and ask 10 10x what you were making
before that's correct
where did that money go
that's correct where's it going
everything that white right there go and
think about even if you make two three
times more than what you're making now
where would that money go true so it's
the habit that's more important not just
the amount because I hear this all the
time that Oh once I used to lie to
myself this way - right
well once I make more money how I'll
manage it it's not how it works it's the
habit that makes a difference God so if
you have I don't care if you're making
minimum wage you have maybe two thousand
dollars coming in every month you're not
managing $2,000 well 5,000 10,000 15,000
it's gonna be exactly the same
you wonder to yourself where did all
that money go mmm and in fact you
probably have more stuff you're more in
debt you're more credit card debt and
all that stuff right and then you think
oh let me get you there 20,000 30,000
and then my problems would go away
it won't right it's kiss it's the same
now and it's probably even worse because
I'm I'm middle-aged now so I don't have
much time yes so I'm desperately now
trying to play catch-up on how you know
what of some of the smarter things I can
do with the money of God first because
most people don't know that money has
many jobs okay I know that okay most of
all they think money has one job which
is to spend all right do you think I get
money I spend money right that's broke
people believe growing up thinking money
has one job people are little bit
smarter they know money has two jobs
okay which is to spend and to safe got
it Yeah right the really smart ones they
know that money has three jobs which is
to hold on let me just to spend okay and
also to save yeah and to invest spend
save invest again the very wise people
right here wise people they know money
has four jobs which is to spend save
invest and do hmm yes to give a look at
the Warren Buffett you look at Bill
Gates right yeah those are the people
who really get it money has small jobs
right so the way I used this is not new
by the way I learned this from the book
of richest man in Babylon
that's right this is not for the bucket
ray the buckets right so it talks about
that so I want to keep you very very
simple because I said here's why notice
if you make the
your money management system very
complicated mm-hmm you're not gonna use
it you're not going to use it I'm not
gonna use it like nobody's gonna use it
right right so I want to be very very
simple so I just use the bucket
management bucket money management
systems so what exactly what is the
bucket management I guess for simplicity
sake yeah and you know I mean I I
sometimes have discipline I think I'm
pretty disciplined person right you
would agree and but I find myself having
you know [ __ ] happens life happens Oh
suddenly this month we need this or that
month we need this or always something
always happens yeah so it's hard to
maintain that discipline when all these
emergencies keep popping up that's right
so so very simple imagine every dollar
that comes in yes you divided into five
buckets okay very simple so the first
bucket is what I call your necessities
bucket okay so this is where you you pay
your bills right I would say 60% of your
money six so it's every dollar that
comes in sixty cents goes into this
bucket got it your electricity bill your
car payment your house payment right all
that stuff your internet your cell phone
bill right right that's your necessity
bucket so let's say you're making a
thousand bucks a month hypothetically
six hundred bucks goes into this you're
making ten thousand then six thousand
goes into debt got it very simple makes
sense
so that's sixty percent the next bucket
is what I call your emergency bucket
okay that's then 10% of your money every
dollar comes in goes into this bucket
now emergency money means money put away
for a rainy day
right it could be medical expenses yes
it could be something happens to a
family you want to have that money do ya
this money is people talk about
emergency fund I don't like to touch
this money right how do you not touch
that I just put it away so what I do is
I actually go to my bank banker set up a
bank account where every dollar comes in
he goes into this account it's like a
savings account
I don't think fancy just I do not touch
okay it just goes into it go don't feel
like oh yeah I want it I want to take a
vacation I mean dip into that money
that's not and you wouldn't use that
money if to buy gold or investments or
stocks or something that came up don't
touch it okay from a psychological point
of view what I notice is when you have
cash yes he attracts more cash
I mean I don't have time to go into all
of that but what I noticed when you have
money it's like the habit when you can
accumulate money when you have the habit
killing accumulating money
you're killing more money right when you
don't have a queue meeting money you
always have no money doesn't matter how
much money you make so that's the the
second buck is I came back a second
behind okay the third bucket it's the
investment bucket okay so that's also
ten percent so sixty percent right 10
percent temperatures that's your your
thing of that's your future that's your
with time got it so we're just many
bubble on talk about pay yourself first
this is to pay yourself bucket that 10
percent God and right yeah so it's that
10% and then you have 10 percent is what
I call your learning bucket okay this is
where you learn your skills right you go
to the events get coaching seminars
online courses 10% so imagine you've got
a thousand bucks right 600 bucks goes
into the first necessities yes right
then you have a hundred bucks goes into
the emergency yes hundred bucks goes to
investment right a hundred bucks goes to
learning right you'll be reading a book
and then last one that last 10% that's
your fun but fun but get the fun bucket
that's your that's your mom blah man
that's your tattoo Toro
that's your sashimi it might be so dead
you know if it's 10% then there's no
guilt right okay so when I buy something
face like ap watch yes I used to fund
money got it I do not touch all these
other money got it okay cuz then you
just know kill but if you don't put it
in a bucket it's very easy
oh well you know I should I should tweak
the defecation mmm-hmm suddenly well
you're learning bucket that's gone right
your emergency bucket that's like next
to nothing so I've got a question
seafood so you know I know that you also
say invest in yourself and you know my
investment bucket is very small right
now and as you know you know where we
live it's very expensive yeah I mean I
would be saving for years before I could
even make a small investment so I've
taken just correct me if I'm wrong but
I've taken some of that investment money
and have invested it into learning so am
i learning I've doubled up my learning
you know myself get higher income skills
yeah and then through the high income
skills it increases more income and then
you know I start I should start now so
them so you'll notice when you do this
when you when you put them used to
get systems yeah the first reaction you
you most people would have I can't live
off like 60% yeah there's no way in hell
that that doesn't that's not enough so
then you know okay you need to upgrade
your skills so you earn more right we
talk about it but not just like cutting
coupons saving money not talking about
that but at the same time while you're
increasing income you need to have the
habits in place got it okay I rather if
you cannot do the 10% right now mm-hmm
do 1% do something do 2% because you
need to have the habit in place okay if
you have zero habit and you think it's
like a some future thing that's gonna
happen it's not gonna happen
yeah if you cannot do six okay that's a
80% he going into that let's do five
five five five would the bankers look at
you weird if you go to a bank and just
say oh they won't know it wasn't better
than Brooke right it doesn't it doesn't
matter right so with the habit that
makes the difference got it like that
your investment investment bucket that's
the the your golden goose great right
well you look at I think it was reading
statistics like the average Americans
mm-hmm more than fifty percent of
Americans have less than five hundred
dollars in your savings game yeah many
of them don't even have the three months
you need oh yes we went five hundred
bucks so it means that one emergency yes
wiped out wiped out their one paycheck
away from poverty right that's like
fifty sixty percent of the American
public and America is one of the
wealthiest countries in the world I've
got another question I'm not sure if you
want to add that also with this
discussion but the leveraging of credit
cards yes and rebuilding of credit and I
know you're not a credit specialist
you're not that's not you're you're
you're you're an event you know your
mentor and so forth but I was always
told that you know like for obviously
the counters that you've introduced me
to have been very helpful you know to
divide and make sure your to clear
credit cards wonderful business use one
four percent one corporate right and
then even that to not to mess them out
every month to use 60 70 percent and pay
them down to make sure yeah you don't
you don't accumulate a credit card debt
yeah paid it off every single month got
it so pretty so if it's as long as
within their sixty percent yes you're
fine so that would that those car
all the credit cards all the expenses
all those crackers to pay for the
utilities pay for those things find
anything like that but then don't
leverage using all the fun money you
only have 1000 bucks of fun money but
I'm gonna I'm gonna spend $3,000 it's
okay I put on my card I'll pay back next
month that's what you don't want to do
Danny think about it if you're paying 18
20 percent on a credit card interest
rate yeah and you are saving like 1%
they do the number something is wrong
but here's the thing okay what I learn
is this this is like the bare minimum
Wow okay
the 10% mm-hmm like which is many ball
one talks about a 10% yeah
it's like BAM in of meaning that if you
want to be comfortable in 20 30 years
hmm
this is if you want to get it there like
on like a fast track yeah this number is
too low too low too slow
yeah I can look I can see I was
otherwise writing an article I'll share
this with you yeah if you're making less
than 50k 50k 10% is good yes you're
making like 50 to 200 K that numbers
your your investment bucket needs to be
a 15% 15 okay if you're making 200 to
500 K 25% damn if you're making a
million or more 35% so that means then
35% go to investment your what strings
is your necessary pocket if you cannot
be making a million boxes and you know
600 being on the car which means you're
being yeah I think you still spare like
yeah 300 if you're making a million 350
K yeah that's fine but so maybe you like
pieces of sushi not 20 pieces of sushi
and sushi and then get some get at you
dawn right it's cheap right kind of
missus don't be buying all your friend
sushi that's right that old Toro
tutorial it case you think it's when you
know that numbers example T's Desmond ah
man that's when you spend like 200 bucks
on sushi because in my mom holy [ __ ]
cuz that's 200 bucks if you can put in
in some kind investment in in a stock in
20 years that mu is expensive that's
right that's like whoa not just $200
that's not oh it's not probably call
thousand dollars right right and I'm not
saying like I'm the last guy they would
tell you not you enjoy your life and
things like that do it this way yes your
income increases you do it this way
there's fun money spend what
you want it's kind of a reward like
maybe once a month if you did something
that was worth it that earned more
that's no problem that you can do we
were stuff every single month just don't
go over the limit and you don't you
wanted this to be automatic
when this requires you to sit down and
you do it you won't have I'm just
telling you it won't happen he has to be
done automatically so talk to the bank
on the bank and say your banker will
look at your winds-day why do you set up
like for what the hell is this mm-hmm
right and then you're like you got to
pay some leader couple bucks for the
accountants fees and forget about that
stuff it doesn't matter right it's a
habit of it so then you know guess then
you have fun with this okay at first
when I did it I had no money right but I
did it was 1% yeah 1% just emergency
right I was spending more on learning
but it was just no money because I
wasn't yet but I still do it and it's
like Oh 1.5% 2% 3% 4% right and then two
more and more one one person inspired me
so tremendously a search on Templeton
from Templeton fund billionaire he
started off investing 1% of what he
earns yes and spends 99% not didn't have
a lot of money why before he passed away
yes he was only spending 1% of what he
earns Wow and 99% invested wow that's
like he reversed that so you gotta think
about and then you get castaigne you'd
be excited about looking at then you own
the emergency fund like oh yeah you feel
good like you know what things are ok
then something happens I could I could
happen I could take care of my family I
could make that happen right now the
emergency fund is just like whatever I
paid off under credit cards I guess you
know I may have some good credit but
let's yeah that's the only emergency
fund but and then and then you look in
your investments like oh holy [ __ ]
that's I got next to nothing most way up
next to nothing Yeah right and and
they're like oh yeah and then that's why
they think let me buy some stocks or
you don't look at that you just look at
this what's a healthy number to get to
in your investment bucket before you can
even look at investments you know just
put it into it okay don't even think
about that so much on it because the
right thing if you do due diligence aim
for don't get greedy yes seven
a 9% mm-hmm 10 / 10 percent that don't
get greedy with it but don't oh I'm
gonna get a 20% return forget about it
what you want is a consistent return
that 8% at 9% but over a long period of
time right right so you think that you'd
sit Lisa gonna retire at 65 yes you say
okay you have that much time
but knowing if you don't put money into
it now yeah I don't have much time for
that yeah they're like another 25 years
right yeah right and knowing when you
are 50/50 for I know that 55 60 60 we
can't go both old Mary can't go as fast
yeah
he's older but you're right we can't go
Italy kiddo I'm gonna work 12 hours
gonna work 14 hours it's exhausting it's
exhausting right now you know
now sit down like for you like okay when
I was younger 20 some-odd years old I
can do this for 10 hours straight now
like two hours into you know my back
aches my net eggs like my hand like I
gotta go spend some more money on a
massage I like it like that yes
seriously right I do like it really
now I go get a massage every single week
it's the same thing but so that's how we
manage money hmm