I have spent a lot of time around millionaires watching how they think, [music] what they do, but also like what they don't do to achieve a life of financial freedom. And after quitting these five habits, I went from having no money at 20 to becoming a millionaire myself by the age of 24. And here's what I figured out.
Your bank account isn't what keeps you poor. Your brain is. So, if you want real financial freedom, there are five money habits that you need to quit right now.
The first habit is recognizing the one stupid decision. This is what happens to most people. They make a thousand smart money choices and then they wipe them out with one dumb [music] move.
Okay? And that is not me just saying this even though I see it happen a thousand times. Research shows that impulse decisions account from 40 to 80% [music] of all purchases.
Here's the logic behind it. People save. Then they budget.
They cut back. Then they blow it all on one dumb emotional purchase. It [music] could be like I pick up the entire bar tab for everybody at the bar just cuz like I want to look cool.
It could be spending thousands of dollars on a car upgrade that they don't need when they're at the dealership to renew their lease. It could be buying something to celebrate something or to cope with something or to impress people. There's one thought that will come into their brain.
I deserve this. I'll look good if I buy this. It shows up in their head and then they just go with it.
They don't question the thought. They just say, I'm going to buy the thing. Now, why is this?
These decisions happen [music] when there's a sudden strong emotional desire combined with low cognitive control. Okay? So, what does that mean?
You're under stress of some sort, fatigue of some sort, anxiety of some sort, and then something occurs. Your brain gets hijacked by the analytical systems, by your emotional systems. So, you're not actually thinking about making the purchase.
You're just feeling it. And feelings cost money. I remember when I was making, I want to say it [music] was like $70,000 a year.
And I was looking at all the cars that everybody else around me had. And I was [music] so like jealous because I had this like beat up old Prius. And I remember I went to the car dealership after that [music] weekend because everyone was showing off their cars in the garage at the place I worked.
And I went there and I was like dead set on signing a lease for a car to the degree that I would have signed a lease if it didn't require a co-signer because I didn't have enough credit. And if I hadn't had the no credit, I would have had that car and it would have cost me 50% of my paycheck, which would have blown all my money and I don't even know where I would have been today. That's how this works.
Okay? You can be disciplined 99% of the time, but if you let your emotions run wild over that 1%, you got to start over. I call it like a net zero decision.
It's like essentially you net out all the other good decisions with like one [music] decision. So, you need to remember that money management, it's not just like, oh, you save and budget. It's you protect yourself from that version of you that makes bad [music] decisions.
You know, when do I make bad decisions? When I'm hungry, when I'm tired, when I'm stressed, right? [music] Let's not make decisions in those states.
So, here's how you do that. Before you got a big purchase, pause. Make sure you're in the right emotional state.
If you still want it in 2 days, great. Get it. But you will be shocked at how many urges disappear overnight.
Most of them. The next habit you need to quit is waiting for the big win. Okay, here's what most people get wrong about getting rich or becoming wealthy.
They think that wealth comes from like this one big [music] moment and that it's going to happen in one big moment like a lottery ticket. They tell themselves once I find the perfect idea, [music] once I hit that one big investment, once I get that big win, then I'll be set. But that is just a [music] story that the mind tells you while the time passes.
The truth is wealth doesn't come from one lucky shot. It [music] comes from thousands of small, very boring compounding decisions over years. Warren Buffett said this line, which I think is in my life has been a product of compound interest.
He became [music] an exceptional investor by making good decisions for a long enough time. It's funny because I remember talking to Alex about this at one point. I said, I think everything good I have in my life has come from compound interest.
Like my body, my relationships, my friendships. It's like there's been no like, oh, there's this big moment in time. It's been there's these tiny little decisions I make every day and there's effort I put in every day and then I look back a decade later and I'm really happy with where it's at.
That's it. Even when you think about investing in the stock market, for example, there's really clear research on that. Time in the market beats timing in the market.
Okay? I actually know this, so I don't stress over what I put in the stock market. The longer that your money is invested, the more time it has to grow exponentially.
It will go down, it will go up, blah blah blah. Someone who invests $10,000 at 25 and they let it compound at 7% annually, they're going to have $149,000 by the age of 65. But somebody who waits until they're 35, they only have $76,000.
[music] Okay? So, same money, half the result just because they waited 10 years. There's no secret to this.
It's just about discipline and patience. You get good at something. You stay consistent long enough, and you let time do the work.
So, here's how you stay in it long enough to win it. Pick to committing to improving one thing at 1% each day over the next year. Do not wait for the big moment or luck or until there's some crazy opportunity, but just do it starting now.
Do you know why people who make six figures feel just as broke as people who make $50,000? It's because of lifestyle inflation. The truth is, if your expenses rise [music] as fast as your income, you never upgrade your life.
You're just like upgrading the treadmill of the thing that you're running on. And it's really easy to fall for that because a lot of people think that they won't, but they do. Okay?
They get a raise, they get a promotion, their income goes up, so then their spending goes up. All of a sudden, they have a nicer apartment, a better car, more vacations, fancier restaurants. [music] You tell yourself, "I worked hard.
I deserve it. And it's not like you don't deserve it, but the trap is that if your expenses continue to rise as fast as your income, you never able to get ahead. You don't [music] create that nest egg.
And so, you're just running on a bigger and longer treadmill. And this is why people who make six figures feel just as broke as people who make $50,000. The number changes, but the stress and the like amount away from broke you are doesn't.
So, what normally happens is like as your income increases, so do your minimum standards. Like what used to feel like a luxury becomes the new baseline. And then once your baseline continues to rise, it's like really hard to go back without feeling like you're losing.
Like I know for myself as I continue to make more money, I'm very cognizant of like not overspending and constantly going for the next thing because I don't want to make my baseline so high that I create stress in my life. Honestly, I could have a $50 million house fairly easily. That's not worth it to me.
I don't value a [music] house that much. So it's like, you know, maybe there would be something that'd be worth it. Like for my business, I definitely make a lot bigger investments cuz it's worth it to me.
Income is not wealth. Wealth is what you keep, not what you make. So like Warren Buffett, for example, when I talk about the house, he lives in the same house that he bought in like 1958.
And I don't think that's because he's cheap. I think it's because he understands that every dollar that you don't spend is a dollar that can compound. And it's attention back, right?
Even $5,000 invested annually over 30 years at 7% grows to over a million dollars. But that only happens if you don't spend it on [music] something else. The next time you get a raise, increase your savings, not your spending.
To get a 10% raise, save 10%. The next money habit is one that most people are afraid to admit, refusing to face reality. Okay, the truth is most people are not bad with money, they are scared of it.
People who understand basic math concepts, interest rates, compounding, risk, they are significantly more likely to plan for retirement, invest in assets, offer higher returns, build wealth over their lifetime. Now, here's the thing. Those who can do basic calculations build two to three times more wealth than those who can't by the time they retire.
Most people don't look at their numbers. They don't check their bank account. They don't track their spending.
And they don't calculate what they owe people or what their money can do for them. Why? Because they just say this said, "I'm just not good with numbers.
" No, you're not experienced. You haven't tried. You haven't taught yourself.
And you're lazy. Maybe deep down you are scared of what you would see. too many charges for takeout food, right?
Subscriptions you forgot to actually do anything with debt that you pretend doesn't exist. But the longer that you avoid reality and avoid acquiring the skills, the worse it gets. I used to say, "Oh, I'm just bad at math.
" Can you imagine as the CEO of this company if I was like, "I'm just bad at math. Guess I didn't know we were going to spend that much. Oopsies.
" Nowadays doing what I'm talking about. Get on chat tpt. You can do it right now.
You can ask chat to do the math and then show you how it did the math. I mean, like, there's just no excuses anymore. This is ridiculous.
And if you're like, I can't pay for chat GPT, go on Google. It has Gemini built into it. Avoidance, it gives you a very temporary feeling of comfort and very permanent consequences.
But like numbers don't lie. And if you never look at the numbers, you never learn math. You never will know where you stand.
And if you don't know where you stand, you can't know how to adjust to go to the direction you want to. So here's what you want to do instead. Just do a couple things.
Look at your bank account. Ask yourself and just write down how much went in, how much came out, what's left, and do the math. If you just started doing that, if that's the only thing you do after this video, if you just did that every week, you'd be so much further in a month than you are right now.
But if you never look at where your money is going, just consider it already gone. Like there, I don't I can't help you. The final habit that you need to quit is buying feelings instead of assets.
If you want to build wealth, you need to understand that money doesn't buy things, it buys emotions. Studies show that emotional intelligence, the ability to identify and manage our emotions, is directly linked to lower levels of materialism and compulsive buying. Now, why is that?
When people [music] can't sit with their uncomfortable emotions, they do things like spend money. Impulse purchases, they are usually triggered by feeling low self-esteem, feeling [music] the desire for status, feeling stress, like the buying, it gives you dopamine. Same like people who overeat, who smoke, who drink.
It's the same thing. Okay? But then you're back to where you started and in a worse situation with less [music] money.
And the problem is that the thing that they buy is never going to bring those feelings. So then they've got to buy the next thing and the next thing and the next thing. And like that results in you not building long-term wealth because you're trying to buy yourself these feelings that aren't solved by anything that money can buy.
So if you want to break that cycle, you have to remember that like happiness [music] doesn't come from what you consume. It comes from things that you create in your life. And those have nothing to do with money.
In fact, being successful monetarily and being happy not related. I'll tell you that. Okay.
I I have done both and neither of them come from each other. They're like half the time in controversy. Success requires autonomy.
Happiness requires connection. [music] Tough to do both. It's like you have to play between the two.
And so, think about it like this. Every dollar that you blow trying to [music] buy yourself a feeling is a dollar that you could have used to build freedom in your life. Assets appreciate.
Feelings depreciate. In fact, feelings will go away whether you spend money or not. And so if you're spending money on things that lose value, the second you buy them, you are not investing.
You're just bleeding out more money. The next time you want to buy something, ask yourself, what feeling am I looking for? I will ask myself that when I get the urge to shop, which is like very infrequent, but when I do, I'm like, "Ooh, what what feeling do we have here that we're trying to escape or trying to buy?
" If it's confidence, go do something that actually build confidence. If it's connection, like call a friend. like train yourself to reflect, become aware of the emotion, and then solve for the emotion, not just go buy something.
Cuz buying something is just like managing a symptom, not managing the root cause. It's like that's not going to lead to the life you want. The bottom line is that like the worst money habits, they're not in your bank account, right?
They're in your head. It's the thoughts you believe. It's the emotions that you follow, and it's the stories that you tell yourself [music] about, oh, someday I'm going to do this and, you know, next Monday I'm going to get started.
That's not going to happen. If you want to get ahead, stop looking for the next opportunity and start looking inside yourself. Which of these five habits are you guilty of?
Pick one. Cut it out.
