STOP LIVING PAYCHECK TO PAYCHECK!

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How’s it going today guys so today we’re going to be talking about how to stop living paycheck to paycheck now i just recently did a video called how to break out of the lower class and if you’re someone who’s interested on this topic i highly recommend that video as well because i talked about a lot of ideas in that video that would help you stop living paycheck

To paycheck as well but for this video i kind of wanted to make it a more pictorial type video and kind of have a representation of this in an actual picture so you guys can see it in front of your eyes because a lot of us are visual learners we need to see things you may hear something you may read something but until you can visualize it it may not click with

You it may not set that light bulb off in your head i’m really excited to share this video with you guys because i’m talking about some of the teachings from one of my favorite books of all time which is rich dad poor dad by robert kiyosaki and i highly recommend that is the first book you read if you’re someone who’s trying to break out of the rat race if you’re

Someone who’s trying to you know improve your life and make more money in improve your financial situation so the link to that book is in the description if you guys are interested but anyways what i want to talk about first is income versus expenses because if you’re paycheck-to-paycheck your income is equal to your expenses so what does it actually look like

So this is where you want to be in an ideal situation this is the minimum okay you want to be someone whose expenses are 10% lower than your income at minimum and then you’re going to take that 10% and you’re going to invest it or at least save it you know you’re going to save it for a rainy day fund and eventually hopefully invest some of that money so this is

Where you want to be as a start i don’t think this is where you want to be your whole life because you’re going to be working for a long time to ever be able to save enough money to you know enjoy your life and have a retirement so you want to be saving a minimum of 10 percent of your money and in order to do that you need to have your expenses below your income

So if your income is right here at $3,000 and you have 2700 dollars of expenses you have 10 percent or $300 leftover every single month to save as well as invest now 49 percent of americans are paycheck to paycheck this is what this looks like your income is equal to your expenses there’s no surplus left over at the end of the month your account balance stays

The same your money comes in and it all goes right back out maybe you’ll have a small cash cushion in your checking account but you have no money invested maybe you have an employer 401k if you’re lucky but that’s not enough that’s not going to cut it that’s a good start but you need to be doing things above and beyond that so you’re someone whose balance is

The same at the end of every single month and you’re saying how the hell do i stop doing this because this sucks i work 40 hours a week and then i take all that money and i blow it and it’s like where’s my money going the best way to answer that question as far as where your money is going check out the video i did on how to break out of the lower class because

I covered a ton of stuff in there as far as discretionary versus non discretionary expenses we’re not going to get into that in this video we’re going to kind of talk about some different stuff that i think is going to help you guys a lot now even worse than paycheck to paycheck is where most americans are these are people who are contributing towards their debt

They are in debt and they owe money to other people so this is someone whose expenses exceed their income so that area right there this filled in area is the debt that they’re accruing every single month so here’s a somebody right here with a $3,000 income and $3,500 of expenses well that money’s got to come from somewhere and it’s going to come from a credit

Card so just so you guys know 80 percent of americans are in debt now of those 80% 44% of americans do have mortgage debt so most of us are not living in a home that is paid off most of us are living in a poem that we’re paying for with our mortgage but even so that’s only forty four percent of us and 80 percent of us aren’t debt so this is even worse than being

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Paycheck to paycheck because you actually don’t even have enough money to pay for your expenses so how do you fix this there’s two ways you can fix it you can make more money or you can spend less money or the best-case scenario do a little bit of both so now we’re going to talk about what i call the defensive versus the offensive approach okay so here’s how i

Want you to think about this this is the defensive approach the defensive approach is to lower your expenses okay but there’s something there’s a saying before that you get you can only pinch your money so much you can only spread yourself so thin yeah you can clip coupons yeah you can you know by discount groceries you know use less energy turn off lights in

Your house sure you can keep your thermostat at a reasonable temperature but that’s only going to get you so far guys that’s not going to make you rich it will help improve your situation but it’s a defensive approach okay the way i see a defensive approach is kind of like shriveling up okay kind of shrinking yourself down and being a minimalist and it’s not a

Bad idea but i want you guys to take more terms of the offensive approach what is the offensive approach that’s increasing your income okay because maybe you like your standard of living maybe you like being able to buy foods that you enjoy not so much having to buy what’s on sale maybe you like going out to a restaurant once or twice a month maybe there’s things

That you do that you want to continue to do because it’s you know it gives you a quality life okay if you want to take the defensive approach you have to cut things out of your life and scale back you should do this but i want you guys to think in terms of being offensive and being on the offense and kind of running towards the problem as opposed to running away

From the problem the defensive approach is kind of running away from the problem the problem is you’re not making enough money and your solution is to shrink down shrink what you’re spending so how do you go about doing the defensive approach it’s very simple guys you’ve got to spend less money i talked about this a lot in that other video but basically figure

Out what your discretionary and your non discretionary expenses are make a budget and then cut stuff out you know stop spending certain amounts of money on alcohol and entertainment and just figure out where you’re spending too much money everyone should do this but it’s the extent that you do this i mean do i clip coupons absolutely not it’s a waste of my time

I don’t use the shopper cards i don’t do any of that stuff because it’s a waste of my time i’m more on the offensive approach of making more money so i don’t have to clip coupons so i don’t have to you know look at what’s on sale and buy food that’s on sale some people that’s what they’re going to do but i want you guys to think outside the box and be offensive

So what is the offensive approach the best way i could demonstrate this is looking at robert kiyosaki’s cash flow quadrant this is right out of rich dad poor dad i’m sure you guys have seen this or a variation of this somewhere but i’m hoping that once you the light bulbs going to go off in your head because i can remember the first time i read through which dad

Poor dad it was like something i was just reading through my friend recommended it i was depressed at the time and he was like check out this book you know it really helped me when i was you know between a rock and a hard place and i’m like yeah sure i’ll read a stupid book and see what this does but i remember reading that book and like having that aha moment

Where i was like this is it this is the ticket this is why i’m unhappy this is what i need to do and that’s what sparked this youtube channel where i’m now what’s considered the s quadrant or self-employed so let’s go over the cashflow quadrant so you are one of these things maybe you’re multiple of these things which is good if you’re two of these things that’s

Good maybe you’re a you know an employee as well as an investor or a business owner and an investor or something like that but anyway most of us fall into the category of being in the e quadrant or being an employee this is somebody who has a job and time is equal to money and there’s no breaking out of that equation because you’re paid a salary or you’re paid an

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Hourly wage if you’re paid a salary your time doesn’t even equal your money because there’s some times that you may have to work 70 hours and you make the same money some days or sometimes you’ll work 40 hours and you make the same amount of money but the number one problem with this the number one problem with that strategy is that this is not scalable because

The only way to make more money is to waste more of your time or spend more of your time i see working a job as wasted time but you know some people would disagree with that i mean you are making money but this is not scalable okay you’re never going to go anywhere this is not a way to make more money by sacrificing your time most of us don’t want to work more

Than 40 hours a week at a job that we are not necessarily enjoying i mean i love what i do and i probably put in some weeks 80 or 90 hours i work every single day on youtube but i love it that’s the difference this is a low-risk approach and for those of you familiar with stocks low-risk stocks give you a low return okay so the low-risk strategy of being an

Employee will give you a low return in life where you’re going to be compensated a small amount of money let’s do the s quadrant next because this is where i fall this is somebody who is self-employed so rather than having a job you create a job you go out there and you find a way to make money by providing a service or providing a skill so you create a job and

Hopefully your time is equal to more money because there’s less people taking the money out i mean the idea of having a job is to make the people at the top richer and you are just a worker bee and you make a small amount of money based on how much money you’re actually making them if you’re self-employed you’re in control of how much money you’re making and how

Much you pay yourself so time will equal more money but the problem with being self-employed is that time is still equal to money and you’re paid by your effort so this still isn’t as scalable as a as a business which we’re going to talk about in a second but you can scale being self-employed into a business by hiring people or contracting stuff out that you

Don’t necessarily want to do this is a good place to be this is a good place to get started is to move into the self-employed quadrant and you don’t necessarily have to quit your job you could be an employee as well as being self-employed by having a side hustle that’s how i started on youtube guys i was making videos in my spare time and it turned into my full

Time you know gig right now where i am self-employed making all my money online so basically when you’re putting in the time you’re going to make more money because you’re paid by your effort if i put in 90 hours of work in a week on youtube i’m going to see more money if i put in 20 hours i’m going to see a hell of a lot less money because you are in control

Of your own destiny you’re in control of how much money you make if you don’t put the effort in you’re not going to make enough money you’re not going to make as much money now what i like about this is you can scale it into a business like i said and this is probably moderate risk because most people if you are you know disciplined enough you can make a living

Being self-employed but in order to scale it into a business this is where you guys should be focused it’s scaling something into a business because at that point you are contracting out the work you don’t want to do you’re hiring people to do the that you don’t want to do so one example of this is i’ve actually started doing this myself because i want to scale

This i see the bigger picture here so i actually decided i’m done making thumbnails this is consuming way too much of my time and i hired a graphic designer and now i paid him to make my thumbnails and because i’m making enough on youtube i can afford to have an employee or somebody you know on the books there that i’m just contracting work out to as a result

I’m able to scale this because i just freed up some more of my time which i can put towards an effort that actually makes me money so that’s how this becomes scalable ok so now let’s move and look at the b quadrant this is the business owners out there this is when you have people working for you and the people make you the money the people make you the money

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Most of us are the people making the money for the business owner we are the people making the money for the person at the very top that’s a bad place to be so instead of being paid hourly instead of being paid by your effort you’re being paid by your ability to select talent and contract out work and manage the work as a result you’re being paid by projects or

By clients and this is scaleable guys this is scalable you’re able to hire more employees over time this is higher risk and as a result it’s a much higher reward most of the rich people out there most of the millionaires and the billionaires have a business of some kind you know they started a business there is risk involved but for those of us who do this and

Are successful there are tremendous rewards in doing this and then we have the i category this is what my channel is about this is the investors out there guys you can be in any of these three quadrants and also be in the fourth investor quadrant the ai quadrant this is arguably the most important one because it doesn’t matter if you make $14 an hour or $200,000

A year you can make yourself a great future by investing okay so this is when you’re an investor in money works for you so basically your money makes you more money your money is equal to your money you don’t have to spend any more time you just have to put your money to work so what i love about this is its passive its passive income i mean if you’re somebody

Who goes out there invests in dividend stocks and you have a dividend reinvestment you never have to look at that every quarter the dividends that are paid by those stocks are going to be reinvested back into the stock and you don’t have to do anything you just sit there and you let your money grow over time what’s great about this is its scalable because you can

Add more money to it and this is variable risk for somebody who wants a low risk investment maybe you’re going to look at bonds for someone who wants a high risk investment maybe you’re going to go start flipping real estate there’s something out there for everyone when it comes to investing based on what your risk tile so you could find some really high-risk

Investments out there or find some very low-risk investments but you need to be in multiple quadrants if you’re just in the employee quadrant if you’re just sitting there in the e unless you go for the defensive approach you’re always going to live paycheck to paycheck so maybe start with the defensive approach start getting control of your spending but i want

You to at some point think about a more offensive approach that way you can kind of at some point buy some luxury items maybe you want the newer car maybe there’s things you want because we’re human beings and we have desires and yeah it makes sense on paper to be a minimalist but you know when your friends are inviting you out for a beer and you go out and you

Order a glass of water because you’re like oh i’m going to be defensive that sucks okay that’s not a fun situation to be in so i want you guys to think about a more offensive approach and i really hope that showing you guys the the robert kiyosaki’s cashflow quadrant i really hope that sparks something in your mind where you went okay i need to start investing

Or i need to start a side hustle or maybe you’re ambitious and you’re going to start a business you’ve got to do something here to be offensive otherwise you know you’re going to be stuck living paycheck to paycheck or having to you know to you know shrink down and be on the defensive side of things anyways guys i hope you enjoyed this video like i said i’m going

To link up the video at the end on how to break out of the lower class if you guys enjoyed this video please drop a like and if you are new to my channel please consider subscribing to be notified of any future uploads and as always i thank you for taking the time to watch this video you

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STOP LIVING PAYCHECK TO PAYCHECK! By Ryan Scribner

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