if you can understand this equation when you're young you will never have to worry about money past the age of 40 take a look you go to work to get money this money can buy you assets these assets bring you wealth and this wealth is what brings you Freedom the problem is especially with younger people is you work to get money then he uses money not to buy assets but to buy what I call DS what is DS dumb stuff and the reality is that there are seven things that are killing your wealth faster than
you going to Chipotle and buying the extra guac which I'm going to be going over in this video so without wasting any further time let's start with number one your car the average new car payment in America today is $735 and the average used car payment is $523 and the crazy part is that this is just your car payment this does not include your premium gas because now you're driving a luxury car it does not include your more expensive Insurance because now you have a more expensive car and this does not include your more expensive
maintenance because that maintenance on your BMW is a whole lot more expensive than my maintenance on my Toyota now I don't have a problem if you go out and buy a new car I don't have a problem if you go out and you buy an expensive car I do have a problem though when you go out and you buy a car that you can't afford and then you struggle with money and you wonder why you're struggling to build wealth or get rich so let's go through a hypothetical example let's assume that you are 25 years
old right now you go out and you put $88,000 down to get yourself a brand new BMW because everybody's got a nice BMW nowadays and now you take this $88,000 you get yourself a nice $50 $55,000 car maybe even a $45,000 car depending on what it is and now you got these expensive car payments that you're going to be paying for the next number of years now after 5 years to pay off the car and you might think that you're going to be car payment free but ends up happening to everybody in this situation is
you feel weird without a car payment so now you trade it in you get a new car you put on a bigger down payment and now you start the payment game all over again and your payments don't go down your payments go up because cars get more expensive you start making more money you want to have a nicer car you go from the three series to the four series the four series to the Five series and then you go from the Five series to the seven series because nobody wants to drive around in the six
series for some reason but I'm going to flip the script a little bit differently than what I've done in the past because what I've done in the past is I've said well what if instead of you taking this $8,000 and using it as a down payment you use this to buy a used Toyota Corolla or a used Toyota Camry and then you invest this payment instead if you did that you would retire a millionaire but let's not talk about that instead let's say hm you take this $8,000 when you're 25 years old and instead of
using this as a down payment for a BMW you take this $88,000 and you use this as a down payment fore investment you put this money into the stock market into the S&P 500 which over the last 70 years has averaged a 10% return a year that's actually a little bit higher than 10% a year year but let's just stick with 10% a year and now you do this until you retire so you're 25 right now you want a retire win you are 67 so you do this for 42 years well if you do this
and you never invest another Penny again let me make sure that's clear you invest this $8,000 at the age of 25 you never invest another Penny again and you let this $88,000 sit there and compound if you do that you're going to retire with more than $430,000 in your account assuming you never invest another Penny after this $8,000 instead one of the best things that you can do I'm talking from experience here is to use your 20s I don't care how much money you make to drive a beat down car and then when you're in
your 30s you buy a little bit of a nicer car with cash because now you can use this time in your 20s to invest as aggressively as possible let this money start compounding and growing and then when you're in your 30s you'll be able to afford a nicer car without having to worry about the money how am I speaking from my experience here because throughout my 20s even though I was making good money I was was driving around in a beat down Toyota Solara with multiple rims on the car with no bumper towards the end
of my 20s because I was using that money to invest aggressively and by the way for those of you that have been following my car journey I just upgraded my car to a brand new Toyota Rav 4 I was looking at getting a used Toyota RF 4 but I ended up getting a new one because the price of a new versus a used RF 4 was almost the exact same wealth killer number two is your watch do you want to know why the watch industry has been so profitable especially recently now you might say it's
because watches have huge margins which they do especially if you're talking about a luxury watch but that's not what I'm talking about the reason why the watch industry has been so profitable is because after the Jeweler sells you the watch they're now also selling the financing for you to pay for that watch it's a win-win win for the Jeweler number one it's a win for the Jeweler because they get a sale number two it's another win for the Jeweler because now they get to sell this watch to somebody that can't afford it and number three
it's a third win for the Jeweler because now they get to sell you the interest on that exact same watch so they get to make money twice the problem with this is that watch prices don't always go up if you've been reading Market briefs you know that Rolex prices have been falling steadily why because as money has become tighter people are also tightening up their budgets and they're not spending as frivolously as they did when stimulus checks are going out and so now we've seen Rolex prices fall because of that by the way if you
want to stay up to date on what is happening in the financial markets when they are happening Market briefs is a free financial newsletter that I created to keep keep you up to date on what's happening in things like the economy the housing market the stock market crypto and the global economy into a fun we and easy to read newsletter you can read Market briefs in less than 5 minutes every morning and it's completely free so if you have not joined Market briefs yet I got the link to how you can join down in the
description below the third wealth killer in your 20s is vacations read this line from Business Insider 47% of Millennials were willing to take on debt to fund summer travel versus gen Z trailed close behind with 42% almost half half of young people are willing to take on debt to fund a traveling to fund a vacation to Cancun the problem with that is that vacation to Cancun isn't putting any money in your pocket well what people are saying is if I can go to Cancun I can relax and unwind that way I can come back to
work ready to go the problem is Cancun isn't depositing any money in your bank account so what ends up happening is just swipe your credit card that way you can relax and unwind you go to Cancun you have a great time you relax and unwind you get home and when you get home you got the credit C bill in the mail which says you owe $10,000 which you don't have and now you get stressed again and you need to go on another vacation to relax and unwind from the new stress that you just got from
your previous vacation if you want to relax and unwind and not have to worry about the price here's what you do if you can't afford it open up the back door put a seat over there and relax and unwind without having to pay the price because if you cannot afford to go to Cancun with cash you should not be going to Cancun with cash I get it everybody's doing nowadays on Instagram on Tik Tok everybody's talking about these crazy lavis vacations it's crazy how many young people are going all over the world to the Maldives
to Bali to Bora Bora to all these places that you've never even heard of before but the reality is if you can't afford it don't be the one that's going there making everybody else Rich because then you're going to spend the rest of your 30s your 40s and your 50s paying off your vacations and your 20s wealth killer number four are your designer clothes do you know who is arguably the richest person in the world is Bernard arnal who is the CEO and founder of lvmh what's lvmh well that's the company that owns Louis Vuitton
Dior Tiffany fendy and desps the question how did he become the richest person in the world well people pay him so they can look rich what does that mean people would rather look rich than be rich how do I know that if you remember back in 2020 2021 when we had that free money stimulus checks were going out unemployment checks were going out people had a lot of extra cash in their pockets and we were in a recession if you remember we were in a recession in 2020 2021 well during that recession luxury sales of
Louis Vuitton and other brands like that were breaking record sales record profits during this recession people got free money and what did they do well we went to the Louis Von store and we got ourselves a new bag a new purse or a new wardrobe you buying these luxury clothes does not make you rich it makes look rich and it makes Bernard Arnold rich and it makes the other investors in these fashion companies Rich so if you want to get rich use your money smartly first that way you can buy all the luxury stuff you
want without having to worry about the price number five is bad Family Planning and this is supposed to be a bottle according to the data it costs somewhere between $15,000 to $177,000 per year to raise a child this is an average some people it's going to cost way more some people it's going to cost way less the reality here is if you want to have kids it's going to cost money you got to pay pay for healthcare got to pay for diapers got to pay for milk got to pay for baby food got to pay
for strollers and a lot of other things and if you don't have the money for that then you're going to put it on your credit card which means that when your kid goes to college you're not going to be able to fund their student loans you're going to ask them for money to pay for your credit card bill and so if you want to avoid all that headache wait to have kids until you got the money to have kids get your money right first and that can be a hard thing to say but this is
where you want to start thinking about how you're actually going to afford this and it's not just kids it's also who are you going to pick as your partner if you're a guy who are you going to pick as your wife if you're a girl who are you going to pick as your husband what type of person are you going to pick because if that person is not good and you get a divorce that divorce can end up costing you a whole lot of money as an attorney who's not your attorney what I can tell
you is that divorces are expensive I don't care if you have a prenup or not they're going to be expensive and if you don't think through these things early on if you don't find a good partner is going to support you it can end up costing you a whole lot more in the future now I get things happen things can happen that you don't expect you can't always control those things but before you put a ring on it before you go and marry the person think about if this person is going to be an asset
in your life and your future family's life or are they going to be a liability the sixth biggest wealth killer is your home a lot of people who buy a home in America have buyers or mores I'm not talking about 10% of people or 20% of people or a quarter of home buyers I'm talking about more than half of home buyers have buyers Morse after they go out to buy a home why because many people end up buying a home they can't afford why because your realtor and your mortgage Banker tell you that the home
that you buy is the biggest investment you're ever going to make and because it's an investment in you your kids your wealth your generational wealth what do you do you go out and you buy a little bit bigger you stretch yourself a little bit more thin so now more of your budget more of your income is going to make just your mortgage payments but the problem with the bigger home is you also got bigger property taxes the problem with the bigger home is your utility bills are also a little bit more the problem with the
bigger home is your insurance is also a little bit higher so your expenses are higher and if you have this nicer home you can't have that ugly looking bathroom now you got to pay to upgrade the bathroom you want to renovate the basement you want to refinish your whole kitchen these things cost money and many times they cost more money than what you expect and so now you have to keep paying for these things in your home which you thought you were just going to pay your monthly mortgage payment and your property taxes and be
done but now you have to keep paying for these upgrades and then when you feel like you finally finish up the upgrades your window breaks or your AC stops working or your roof starts leaking and now you got to pay to repair that is you constantly have these costs as a homeowner which you didn't expect but if you don't prepare for these costs now you have to eat into the money you were going to invest the money you were going to save or maybe eating into the money that you were saving which means you no
longer have the ability to invest and save and you're getting poorer because you bought this home all your money is going right into the home so it becomes a money pit as opposed to something that you thought you're going to just be able to pay pay off and live a little bit more financially free so instead of doing that I want you to be a little bit smarter buy a home that you can afford not that the banks says you can afford that you can comfortably afford that way now well you don't have to worry
about the multi payment so much and you continue to invest your money because you know that your Investments are going to make you wealthy not your home and finally number seven is your debt payments I applaud you if you have stuck with me this far what I mean here by your debt is not that that you're going to go out and get more debt I don't want you to do that but when I talk about debt here is you're not using in your 20s as a time to aggressively pay down your debt now here's the
thing you want to always be putting money aside to invest there's two different things that you can do to invest this money you can put this money into the markets into the real estate market into the stock market something to grow this money or you can use this money to pay down your debt and depending on where you are if you have a lot of student loans if you have a lot of credit card debt if you have a lot of outstanding debt you can use your investment money to also pay down some of this
debt and the reality is if you have a lot of debt you're going to be paying a lot of interest on that debt de and the faster you can get out of that the faster you'll have more money to invest and the faster you'll have to not stress about the money anymore so use your 20s as a time to number one not get into more debt but also number two aggressively pay down that debt this is the best time to go through the decade of sacrifice that means spending less and earning more so you can
invest this money like crazy invest this money to pay down your debt invest this money into the markets that way you can grow your wealth use your 20s as a time to also build your wealth that way by the time you hit 30 you can hit the ground running and just attack your Investments build your wealth because that way by the time you had 40 now you have this new Nest EG this new income stream from your Investments that can pay you without you having to go to work that's what investing is all about but
that requires you to be financially smart and put in the sacrifice early when everybody else is driving around in the fancy cars going on the fancy vacations with money that they don't have when the majority of people make money they then start to wonder what they should do with this money versus wealthy people already have a plan in place so let me ask you a question if your boss gave you a $11,000 bonus tomorrow what would you do with that money and let's make it a little bit more juicy what if tomorrow instead of getting
a $1,000 bonus from your boss I write you a check for $1 million what would you do
