Wealthy People's habits

Charlie Munger said that the wealthy from Babylon found success in making money. They point out that if you’ve been scraping by since your younger days, it’s likely because you either didn’t learn the laws of accumulating wealth or didn’t follow them. Given enough time, anyone can become rich. You wasted plenty of time when you could have been building wealth. The seven secrets to becoming wealthy are surprisingly simple. If you want to earn a lot of money, you need to put them into practice consistently. First, start saving money. Second, control your spending. Third, grow your money. Fourth, protect your principal so you don't lose it. Fifth, buy a home. Sixth, prepare for the time when the breadwinner passes away. Seventh, develop your ability to make money. Hello everyone, this time, we’re reviewing "The Richest Man in Babylon." Many wealthy people recommend this book as an essential reading for financial management. In particular, Charlie Munger mentioned at the Berkshire Hathaway shareholders meeting in 2007 that following the advice in this book worked for him. It’s almost too simple when you think about it.

 

 

It might sound like a story, but the basics of managing your money can be summed up in this one book. So, let's break it down: 1. Start by saving a portion of your income. 2. Set up a budget to control your spending. 3. Apply the principle of growing your money. 4. protect your principal amount. 5. Buy a home. 6. Prepare for your retirement. 7. And most importantly, work on your ability to make money. Now, let's dive into the book. The wealthiest man in Babylon, Arkad, started by saying he was in a rough spot when he began accumulating wealth. He was just like anyone else in this city. At first, he started collecting coins in a worn-out money pouch that was always empty and frustrating. He wanted to fill that pouch so it would jingle with coins! So, he diligently figured out how to plump it up, discovering seven key methods along the way. I’m here to share those seven secrets to becoming wealthy with all of you who’ve gathered here. If you want to earn more money, let’s get to it!

 

 

If you're looking for tips I’d recommend to anyone, I’ll share one daily for the next week. Pay close attention to what I’m about to share, and if you have a different opinion, feel free to speak up. It's essential to have discussions. Once you learn these lessons correctly, you can plant the seeds of wealth in your wallet. Each of you needs to start gathering your wealth wisely first, and only then can you teach others these secrets. I’ll explain the simple ways to fill up your wallet. This is the first step towards the path of success. Without taking this first step, no one can reach the top. Now, let’s think about the first tip: start saving money. I asked a guy sitting in the second row who seemed deep in thought, “What do you do?” He replied, “I’m a scribe, recording on clay tablets.” He said he initially made money that way. There’s an opportunity for you to build your wealth, too.

 

 

 

I spoke to the man with the face and asked, "What do you do to make a living?" He said, "I'm a farmer. I buy goats, butcher them, and sell the meat to housewives and the hides to cobblers." He continued, "You, too, sweat and earn money, just like me. You should explore opportunities to succeed." Then, Akard asked each person about their jobs. After hearing everyone's answers, he said, "As you can see, people earn money through various kinds of work and business. Each person has their way of bringing cash, which flows into their pockets. Depending on your abilities, you might have more or less money piling up, right?" Everyone nodded in agreement. "If you're looking to build wealth, isn't it smart to use the money-making tools you already have?" Everyone agreed with this suggestion. Then Akard turned to a shabby-looking man who identified himself as an egg seller and asked, "If you put ten eggs in a basket every morning and take out nine every evening, what do you think will happen?" He continued, "Over time, you'll end up with so many eggs that you won't fit them all in the basket."

 

 

"Why do you take out less than you put in? The cards looked around at their friends with a smile. Is there anyone here with a thin pocket? At first, it sounded funny, and people giggled. Soon, laughter broke out, and by the end, they were jokingly checking their pockets. The card said, 'Alright, I’ll share the first secret to making your thin pockets nice and full. Do what I tell the egg seller: every time you put coins in your pocket, don’t take out more than nine at a time. Trust me, your pockets will start to bulge! Holding those heavy pockets will feel great, and you’ll also be satisfied. Please don’t laugh at me for being too simple; the truth is always simple. I told you I’d share how I did it. I started just like you, with thin pockets and not much money. But once I only took out 90% of what I put in, my pockets started getting fuller. I'm sure you’ll find the same thing happens to you, even if you don’t know why."

 

 

I’ve been doing fine, just like before. Plus, soon after, money started coming in even more straightforward. It seems like a divine principle that wealth attracts those who save some of their income. But for those with empty pockets, money slips away. What do you crave the most? Better clothes, valuable jewelry, or instant gratification like delicious food? Those things disappear quickly and leave you wanting more. Or are you looking for things that can become assets, like cash, land, livestock, or investments that generate income? Money that leaves your pocket only satisfies immediate desires, but the cash that stays becomes your wealth. The first secret to fattening my wallet is spending only on outs when I play the lottery. The first rule is to start saving money. Many people try to make money through investments, but ultimately, it all comes from their money. The second tip is to control your spending. On the second day, Akard spoke up. Some people asked me how to save 10% of their income when they barely make ends meet.

 

 

You all have empty pockets, but not everyone's earnings are the same, correct? Some people make much more than others, and some have more mouths to feed. Still, it seems like everyone's wallet is equally light. Let me share a truth passed down through generations: the money we call essential expenses tends to go up automatically whenever our income increases unless we consciously try to hold it back. Don’t confuse necessities with luxuries. You and your families have desires that your current income can’t fully satisfy. If you just let those desires run wild, you’ll spend every dime you earn and still fall short. Everyone struggles with endless desires. You might think that I can fulfill all my desires since I have a lot of wealth, but that’s a mistake. My time, energy, travel distance, food options, and passions are limited. Human desires grow relentlessly like weeds grow unchecked in a farmer's field. They’re so complicated that you can never fully satisfy them.

 

 

Take a good look at your daily life. You’ll probably spot some regular expenses you can easily cut back on or eliminate. Get into the habit of spending only small amounts on necessary things. So, start writing down the items you want on paper. Pick out the things you need and those you can afford within 90% of your income. Treat the rest as just some passing desires you don’t need to act on. Next, make a budget for your essential expenses. Don’t touch that 10% that’s meant to boost your savings. Instead of giving in to impulse buys, focus on the satisfaction of growing your savings. Please stick to your budget and adjust it as needed to help you stay on track. Use your budget as a guide to fill your pockets. At this point, a person dressed in a striking red and gold outfit stood up and said, “I’m a free person. I believe we have the right to enjoy life. So, I don’t want to be a slave to a budget telling me where and how much to spend. If I do that, all the fun will disappear, and I’ll regret it.”

 

 

So, Akad asked him, "Who’s making the plans for your move?" He replied, "I’m doing it myself." Akad then explained, "When crossing the desert, you should be thinking about packing essential stuff like hay, grains, and water, not just jewels and heavy gold bars. Creating a budget is crucial for life, no doubt about it. A good budget helps you save money. With a budget, you can buy the essentials and still have some leftovers for other wants, as long as your finances allow it. Plus, it helps you avoid impulse buys and keeps you on track to reach your important dreams. Think of a budget as a beam of light shining into a dark cave, illuminating your financial situation. When you keep track of your spending, you can avoid unnecessary expenses and put your money towards meaningful goals. So, setting and sticking to a smart budget." Akad then turned to the students to share budgeting tips, saying, "This is the second secret to making your wallet thicker: start with what's essential for living."

 

 

Set your expenses within your budget, and then include the essential ones that bring joy to your life. This way, you can manage your spending to be less than 90% of your income and live a satisfying life. The third tip is to grow your money. On the third day, the speaker told the audience, "Looks like your pockets are getting a bit fuller!" You've been training yourself to save 10% of your income regularly. You've also been careful with your spending to protect your growing wealth. It's pleasant and satisfying to have cash stacked up in your pocket, but that money isn’t making money alone. Saving part of what we earn is just the beginning of becoming wealthy. Money needs to work for you to grow your wealth. So, how should we invest the money we've saved up? Our first investment didn’t go well, but we’ll talk about that later. Initially, we made a profit by lending money. One guy bought a load of copper each year, crossing the sea for his business. He was always buying copper and lending it to those with extra cash. He was a reliable person to deal with.

 

 

"I started lending money to make a profit and always got paid back with interest. Every time I lent him cash, he returned it along with the interest, which meant my money grew, too, and I was getting a steady income from those interest payments. It felt great to see both the principal and the interest come back to me. How much money a person has in their pocket doesn’t determine their worth. What matters is whether they have a steady source of income flowing into their pockets. Everyone wants that kind of income stream. Whether you're working or travelling, having money coming in consistently is nice. I secured some high-yield assets, and their income was so good that people started calling me rich. I learned about profitable investments when I first started lending money. I gradually increased my loans and investments with the wisdom I gained from that experience. At first, I didn’t have many income sources, but over time, more and more money started flowing like a golden stream. I was almost overwhelmed trying to figure out how to manage it all. I started with a modest income, but now I have golden opportunities working for me."

 

 

"Just look at how many people are making money; that money just keeps making more money. Their kids and grandkids are all working hard for me. When they pool their resources, it's incredible! The power of money making money is truly amazing. This is the magic of compound interest. Let me give you an example of how smart investing can quickly grow your funds. When he had his first son, a farmer gave a silver coin to a moneylender, asking him to keep it until his son turned 20, with the promise of 25% interest every four years. The farmer asked the moneylender to add the interest to the principal since it was for his son. When the son turned 20, the farmer went to check on the silver coin. The moneylender told him that the money had grown more than the original amount with compound interest. The farmer was pleased, but since his son didn’t need the money immediately, he left it with the moneylender. When the son turned 50, his father had passed away, and he received 167 silver coins from the moneylender, all thanks to the interest over those 50 years."

 

 

It's almost like 17 times more! This is the third secret to filling your pockets. Like sheep in the fields have their lambs, let your money make more money. Create a steady cash flow into your pockets and work on increasing your income. So far, we've covered three principles: First, start saving money. Aim to save at least 10% of your income; if you can, go for over half! Second, control your spending—basically, make a budget. I recommend cutting down on credit card use; that can drastically reduce your expenses. Third, make your money grow. This is the key point—it's all about the magic of compound interest. Interest earns interest, and that compound effect can make you wealthy over time. And for those watching who haven't subscribed yet, please hit that subscribe button and give a like! We're almost at 160,000 subscribers. And if you're interested in buying the book, check out the screen for more info.

 

 

Please use the purchase tag in the bottom left corner; it helps me maintain the channel. Let’s get to the fourth tip: Protect your principal and don’t lose it. Let’s take a look. On the fourth day, Akad started his lecture again. It's easy to get distracted by shiny things and get into a bad situation. You'll lose it if you don’t hold tight to the money in your pocket. Before God entrusts you with a large amount of wealth, you must first learn how to protect the small amounts. Anyone with cash gets tempted by investment opportunities that seem like a sure way to make big bucks. Friends or family excited about those investments will try to convince you to join. The first rule of investing is never to lose your principal. Just because an investment promises high returns doesn’t mean you should risk your money. You could end up losing your principal, too. Always do thorough research before investing. Only invest when you’re confident you can get your money back. Don’t let the foolish desire to get rich quickly lead you astray. Before lending money to anyone, check their ability to repay and reputation.

 

 

Check your credit score, or you'll give away the money you've worked hard for without even realizing it. In any field, you need to start from the ground up. When it comes to investments, it’s all about the basics. After working hard for a year, I once thought it would be a good idea to buy gemstones from a bricklayer named Azmus. We planned to sell the gems and split the profits, but it turned out that the guy was a con artist from Phoenicia who sold me glass shards instead. I lost all the money I invested. Looking back, I realize how foolish it was to trust a bricklayer with gemstones. So, let my experience be a lesson: trust your instincts, but don’t dive into risky investments without guidance. It’s way better to consult with investment experts with much experience making money. Asking for their advice isn’t hard, and it’s worth its weight in gold compared to the amount you’re considering investing. If you hadn’t listened, you could have lost all that money. This is the fourth secret to keeping your wallet full: once you’ve got the cash, the most important thing is to protect it.

 

 

It's essential to keep your principal safe and to be able to get it back when you want. Invest only in places that can bring decent returns to avoid losses and protect your wealth. Surround yourself with smart people and seek advice from experts. They can help you avoid risky investments and keep your money safe. This is a crucial principle that a lot of folks talk about. Please don’t get too greedy trying to make a considerable profit; it’s better to aim for reasonable returns and, more importantly, not lose your principal. Regarding consulting investment experts, talk to those who have real experience and are currently thriving in making money. They know what they're talking about. The fifth tip is to buy a home. In the fifth lesson, they started discussing how if you set aside 90% of your income for living expenses, you could still invest some of that for returns, which means you can grow your wealth faster without sacrificing your happiness. Many people in Babylon struggle to support their families while dealing with high rent in rundown places.

 

 

My wife doesn't even have space to grow flowers. The only place for the kids to play is a dirty alley. If there’s no playground for the kids, no flower garden to brighten my wife's spirits, and no land for veggies to fill our family table, no family can truly enjoy life. The joy of tasting grapes straight from your tree is something else; taking pride in maintaining your home boosts your confidence and motivates you to tackle other challenges. So, I want to encourage everyone to work hard towards owning a home. It's not just about building wealth; it's about laying the foundation for a fulfilling life. With some diligent effort, securing a comfortable living space for your family isn’t just a pipe dream. Our great king has expanded the territory, and now there's plenty of land available. We might be able to buy it at a decent price! Mortgage lenders are more than willing to lend money to those looking to establish a home for their families. If you can show that you have a good chunk of the funds needed for a house, getting a loan for construction won’t be too difficult. You can pay it back after the home is built.

 

 

The amount you need to move forward with isn't much different from rent. If you pay it off monthly, your loan will decrease, and you'll have it all paid off in a few years. Once you own that asset completely, the joy is immense, especially since you only have to pay taxes to the king now. For you, the diligent ones, doing laundry by the riverside will become more frequent, and when you come back, you'll be carrying a goat skin full of water to pour on flowers and your garden. As you can see, owning a home brings many benefits. You save on rent, which significantly cuts down living expenses. With the money you earn, you can enjoy even more. It’s not just about financial gain; it's an investment in family stability, happiness, and a better future. So go ahead and get yourself a home—it's the fifth key to filling your pockets. The sixth key is to prepare when a breadwinner passes away. Even on the sixth day, teachings continued. Everyone moves from youth to old age—that’s the natural flow of life. Unless fate takes you early, you can’t escape that journey. So, make sure you’re ready for your later years.

 

 

When the breadwinner passes away, ensuring the remaining family isn't left in a tough spot is crucial. If you take this lesson to heart, as time passes and your mental strength fades, you’ll worry less about money. Preparing for the future isn't just about saving cash; it's vital to maintain your quality of life. If you understand the rules of wealth and are accumulating more and more, you need to think ahead. You should invest wisely and create a long-term plan that will keep you stable as you age so you won’t have to stress in your later years. There are many ways to prepare for the future. You could discreetly build up your assets, but no matter how cleverly you hide them, there's always a theft risk. That's why I wouldn't recommend that route. Instead, consider buying a house or land. If you choose wisely, picking valuable properties that are likely to appreciate, they can generate income or sell for a reasonable price. You could also invest a little money with a lender and let it grow over time.

 

 

You can grow it; it's the magic of compound interest. I had a friend in Ansan who was a shoemaker, and a while back, he told me he’d been giving two coins to a moneylender every week for eight years. A few days ago, the moneylender shared some concerning news about the amount he was owed, and my friend was over the moon about it. It earns 25% interest every four years, so it added up! I kept urging him to keep investing. If he continues to put in two coins every week for twelve years, I calculated he could get back around 4,000 coins! At that point, he wouldn't have to worry about money anymore. And finally, the seventh secret is to develop your ability to make money. I shared this teaching on the seventh day, and today, I will tell you one of the key ways to fill your pockets. It’s not just about money; it’s about your own story. I want to discuss the mindset and direction in life that lead to success. Not too long ago, a young guy came to me looking to borrow money. When I asked why, he complained that his earnings weren’t enough to cover his landlord’s demands. I told him people like him are not welcome at the moneylender's table.

 

 

He told the young man, "You need to increase your income. What efforts are you making for that?" The young man replied that he had gone to his boss six times a month to ask for a raise, but he was shot down each time. He joked that there wouldn’t be anyone who would keep trying like that. It might sound funny, but he had one essential condition for increasing his income: a burning desire to earn more money. It was a legitimate and urgent ambition. To achieve that, you must first have a strong and clear desire. Just having a vague hope isn't enough. Wishing to be rich isn’t a strong enough motivation. You need to set a specific goal, like saving a certain amount of money. Once you have that goal, you can push yourself to achieve it. If you learn how to save that specific amount with determination, you'll find similar ways to gather the first bit. And that’s how you become wealthy. By mastering the skills to achieve small, clear goals, you’ll also train yourself to accomplish more enormous desires. Building wealth is like this: you learn and grow, starting small and gradually building up.

 

 

You're making a name for yourself, and it's such a great story. As I read this book, I found it captures everything you see in various self-help and personal development books. First off, set clear goals. Having too many complex or unrealistic desires will only lead to frustration. Focus on being the best at your job, and the money will follow. I used to earn a few bucks writing on clay tablets, but then it hit me—other scribes were better than me and getting paid more. So, I decided to become the best scribe out there. It didn’t take long to figure out how they made more money; they put in more effort, stayed focused, and consistently committed themselves. As a result, I became the best scribe around, and no one was as skilled as I was. Naturally, my skills improved, my salary shot up, and I didn’t even have to ask my boss for a raise multiple times. The more we sharpen our skills, the more we’ll earn.

 

You’ll get enough rewards. If you’re a craftsman, you’ll want to learn the skills and tools used by the best in the field. If you’re a judge or a doctor, you’ll share knowledge and support each other with your colleagues. If you’re a merchant, you’ll always be looking for ways to get better quality goods for cheaper. Human labour is constantly changing and evolving. If you’re in a position of influence, you’ll strive to find innovative techniques that offer better products and services to your customers. So, we all need to step up and keep progressing. If you stay stagnant, you’re bound to fall behind. There are plenty of things that can not only help you make a living but also enrich your life. If you value yourself, there are certain things you must do. For instance, avoid unnecessary luxuries that don’t fit your budget and pay off your debts as quickly as possible. Take good care of your family as best you can. Leave some behind so you can distribute your wealth fairly when the time comes. You should also have compassion for those who are hurt or struggling and help them within your means.

 

You need to help and act responsibly towards the people you care about. So, the seventh and final tip for filling your pockets is this: develop your talents, learn more, refine your skills, and take actions that earn you praise. Doing this will build the confidence to achieve what you truly desire. From my long experience of living successfully, I strongly recommend these seven tips for anyone who wants to become wealthy. In Babylon, there’s wealth beyond your imagination, more than enough for everyone to enjoy. Put these tips into practice; it's your rightful claim. Spread these tips so everyone in this beloved, thriving city can enjoy its riches. It’s such great advice! I hope you take these tips to heart. So, we've gone over the seven tips, and to sum it up, the fourth tip is to protect your principal—basically, don’t lose what you’ve got.

"Don’t chase after huge profits; stick to investing in what you know. If you’re unsure, learn from experts who have made money in the past and continue to do so. The fifth tip is to buy a home. There might be differing opinions on this, but you shouldn’t just look at it from an investment standpoint; consider the comfort and stability a home provides. Buying a house often leads to forced long-term investing, and you can use leverage, yielding pretty decent returns. The sixth point is to prepare for retirement. The seventh is to develop your money-making skills. This is something many investment enthusiasts talk about. When I was working, I focused heavily on personal finance, and now I regret not taking it more seriously. The key is consistent cash flow; the easiest way to achieve that is by becoming an expert in your job and earning money there. Then, you can invest that income to generate additional revenue, creating a synergy effect for faster growth."

 

We've looked at seven key principles for becoming wealthy, which are super important. Various publishers have published the Wisdom of the Rich from Babylon. This book was recently released and split into two parts, unlike others. The second part includes thought-provoking questions for each chapter, making it a great study tool. The questions get you thinking. I reviewed Chapter 3, which covers the seven secrets to becoming rich, but the other chapters also have valuable insights. The book is well-structured, entertaining and informative, giving essential tips for building wealth. Many experts in personal finance and actual wealthy individuals highly recommend it. I suggest anyone starting in finance or struggling to save money read this book. It's one of my go-to recommendations!

 

 

I just got my hands on a new book and had to read it! If you found this video helpful or are looking forward to the next one, please hit that like button, subscribe, and turn on notifications. The book is excellent, and the video content is incredible, too, so I'd appreciate it if you could share this with others. Thanks for sticking around for a while, and I'll be back with another good video next time. Thanks! What if we could automate the way Charlie Munger suggests getting rich? David Bach, who has made countless millionaires, says in his book "Automatic Wealth" that anyone can become wealthy by following a systematic savings and investment plan. You don’t have to be super disciplined; automate your plan. It doesn't matter if you don't have a lot of money or struggle to earn it. You need to decide you want to be rich and follow these principles: First, identify unnecessary expenses. Second, invest the money you save in yourself—make sure to automate it. Third, if you want to get rich quickly...

 

 

Invest at least 20% of your total income into yourself first, and keep doing it. Hey there, I'm sharing a book with you today. We're reviewing "The Automatic Millionaire" by David Bach. Charlie Munger recommended that in "The Richest Man in Babylon," anyone can become rich if they save at least 10% of their income and invest that money. But many people struggle to save that 10% and don't know how to invest it. This book offers solutions through automation and retirement funds. The content is excellent, almost like a personal finance guide. Today, we'll examine: 1. The secrets of automatic millionaires who retired in their 50s, 2. How can you become rich with just a few thousand won a day? 3. How to automate your investments. Alright, let's dive into the book! 1. The secrets of automatic millionaires who retired in their 50s. The author shares his experience meeting a millionaire who retired in his early 50s.

 

 

In my mid-20s, I taught a personal finance class in a local adult education program. One of my students was a middle-aged guy named Jim McIntyre, who worked as a manager at a local nonprofit. We didn't talk much until one day after class; he approached me and asked if I could advise him about his and his wife's financial situation. Jim mentioned that he was planning to retire next month, and I was surprised. I didn't say anything, but looking at him, he didn't seem like someone who was financially ready to retire. From what I'd heard in class, he was in his early 50s, had been with the same company for 30 years, and his salary was under $40,000 yearly. He also said he didn’t need to manage his finances much. Plus, he described himself as someone who seeks stability, so it didn’t seem like he had made any money from stock investments. A few days later, Jim and his wife came to my office, and they looked just like your typical hardworking, ordinary Americans. And Jim's wife, Sue, was like this...

 

 

I was chatting with them. Can you believe they’re retiring this early? Most people don’t retire until 65, and Jim is only 52! However, the author couldn’t believe it either, so they looked at the couple’s tax returns and financial statements, which showed their assets and liabilities. First, they checked the tax return. Last year, the couple made about $53,946, which isn’t bad. They’re not super rich, but it’s a pretty decent income. So, what about their debts? They dug through the financial statements but didn’t see any debts mentioned. I raised an eyebrow and asked, “Hmm, the debt section is empty?” They exchanged smiles, and Jim held my hand tightly, grinning as he said, “We don’t owe any money.” I asked about their kids, and they said, “All our kids graduated from college and are doing great!” That’s awesome! Let’s take a look at their assets now. I turned my attention back to the financial statements. They currently live in...

 

 

Jim owned a house worth 450 million won and another house worth 325 million won, giving him some birds. Wow, both houses had no mortgage, right? That's right, no loans. Next up was the retirement account. Jim had 610 million won in his company’s retirement account, but that wasn’t all. His two personal retirement accounts had a total of 72 million won. He had a bank account with 160 million won in cash and 6.5 million to spare. Looking at his liquid assets, they had a fully paid-off boat and a car, bringing their total assets to a whopping 200 million won. By any standard, the McIntyres were wealthy. It’s impressive enough to have a lot of assets without debt, but it didn’t stop there. They were also consistently earning interest and dividends, and the house giving away the birds brought in an annual rent of 26 million won. Most importantly, Jim was already eligible for retirement benefits, and his wife, who was a hairstylist, was pleased.

 

 

Jim had always planned to work until he was 60, but suddenly, his plan to retire at 52 didn’t sound so crazy anymore. Usually, I’m not surprised when someone has a lot of money, but the Kinta couple was different. They didn’t look rich or exceptional; they seemed ordinary. But how did they manage to build such wealth in their early 50s? The author was so curious about how they became wealthy that they asked them to share their secret. So, I took a look. The couple was driving an old Ford and wearing watches that were 10 years old. Suddenly, Jim smiled, saying, “It’s not a 10-year-old watch; it’s 18 years old!” Wow, an 18-year-old watch, huh? But these folks are the real deal. They’ve been happily married, sent their grown kids to college, and are about to retire in their mid-50s. So, please, can you tell us your secret? Are you hiding something amazing?

 

 

"Right, " Su looked me straight in the eye and asked if I wanted to know. I just nodded, and then she turned to her husband. 'Is it okay if I explain for about 15 minutes?' she asked. 'Of course, you probably won't even need that long.' After that, Jim said, 'David, you already know everything. You teach it every day. We’re just living it out.' Then Su took a deep breath and started discussing how they became wealthy. She said the story after the 'why' is the key to getting rich, so I should pay attention. First off, we got married young. On our first date, Jim was 21, and I was 18, and we tied the knot three years later. When we returned from our honeymoon, our parents sat us down and said we needed to get serious about life. They told us we had to choose: either we could chase money like most people do, working hard and stressing over bills every month, or we could learn how to make money work for us and enjoy life."

 

 

The advice our parents gave us was pretty simple: whenever you make any money, the first thing you should do is invest in yourself. So we decided to prioritize that. Jim nodded in agreement. Do you know how people usually think their first paycheck should go towards paying all the bills? Then they save whatever's left, paying everyone else first and treating themselves last. Our parents told us that we should do the opposite to get ahead in the game. Take care of your money first, then deal with the bills. It’s not a big deal, right? Jim said this like it was no biggie, but honestly, figuring out how to save for ourselves wasn’t easy. At first, we tried to reflect that in our budget, but the numbers wouldn’t add up, and we fought a lot. One day, after a big argument about money, I was so upset that I called my mom.

 

 

 

So, I was told that budgeting is pointless. My parents tried it, too, but it made them argue. So, they decided to save 10% of their income, no matter what. They figured they wouldn't even think about anything else. Surprisingly, they said you can adapt even without that 10%. In the meantime, money just started piling up in their account. My mom always said that money you can't see, you can't spend—that was her secret. They began by saving 4% of their income and gradually increased it. Now, they save 15%, but on average, they've been saving about 10%, my mom said. So, what did they do with the money they saved? First, they started saving for retirement. Back then, there wasn’t a general retirement pension system yet, but many companies, including the one I worked for, had a separate pension plan for those who wanted to join. Most of my colleagues didn’t pay much attention, but we signed up for that plan.

 

 

It was a story about priorities. First on the list was saving up to buy a house. My parents always said that their best investment was buying a home. They believed that owning a house brings freedom and safety and that having a place that’s truly yours is key. This meant paying off any loans taken out to buy the house as quickly as possible. No matter how much my friends were out decorating their homes and dining out, my parents insisted I should cut back on spending and focus on saving. They opened my eyes to how many people waste money on trivial things. She looked at Jim and asked, “You remember, right, honey?” Of course, Jim replied, turning to me. As you know, saving money doesn’t mean living a stingy or boring life; it just means not overlooking the little things. If you can cut them out, it helps ensure better finances. For us, one of those little things was smoking, a habit that was draining our money—like a pack a day. My parents were against it back then, highlighting the downsides of smoking.

 

 

"People started realizing that just by saving the money you’d spend on cigarettes, you could gather enough for a down payment on a house within two years, and you’d also be taking care of your health. We paid attention to the 'latte factor'—the idea that you shouldn’t waste money on expensive coffee every morning but rather invest it. I nodded because even though my dad didn’t use that term, he shared the same idea. If he had named it, he might have called it the 'cigarette factor' or the 'don’t waste money factor' or something like that, but the concept was the same. He’d say that if you save a few thousand won a day, you could eventually buy a house. He emphasized that buying a house would make you wealthy while spending on things like lattes would only make you poorer. I couldn’t hold back anymore and asked, 'So, quitting smoking, saving up, and buying a house is all there is to it?' I looked at the others, and they just smiled and nodded."

 

 

So, how on earth did we buy two houses without any loans left? It's not precisely two; we live in one and rent the other out. That’s part of the secret. I inherited some wisdom from my parents about paying off loans quickly. It’s a bit of a hassle for the bank, but it’s easier nowadays. Instead of paying an entire month’s loan each month, we pay half every two weeks. This way, it’s like making extra payments, and if you stick with it for about a year, you can pay off more without feeling financially strained. This means that money takes typically 30 years to pay off and could be settled in about 25 years. When I crunched the numbers, I realized that if I bought a house in my mid-twenties, I could pay off the mortgage by my late forties. But it turned out even better than that! Thanks to sticking to this plan, I could pay off the loan even sooner. By my late thirties, I owned a house outright. What’s next? Paying off the loans.

 

 

Since I didn't have to pay it back, I could save that money monthly. Jim smiled at me and replied. We sold our first house and used the money to buy a better one, quickly paying off the loan similarly. Eventually, we owned both houses outright. One was for living in, and we rented the other for a steady income. It was a great plan. Jim nodded enthusiastically. Our parents taught us never to buy anything on credit. They passed that down to us, and now we're teaching it to our kids, too. The strict rule is that no matter how much you want something, if you can't afford it with cash, you don't buy it. Buying a house is the only exception, but even then, you have to pay off the loan as quickly as possible. It’s not easy, but it’s a principle we stick to. Right, Jim agreed. So, Jim also had to save for five years to buy the boat he wanted, and it had to be used. Jim continued speaking. But that’s...

 

 

"It didn't bother me at all. Someone else paid full price for the boat, and I got to enjoy it, so I was pretty satisfied. We've always done the same when buying a car. We always bought used ones, but I've never regretted it. It runs fine if you get a trustworthy mechanic to check it out and maintain it well-maintained. The key is never to buy if you don't have the cash. My spouse said that since we got married, we've never missed a credit card payment. We paid it off right away that month. This is something our parents taught us. I was surprised at how simple their advice was. But something didn’t quite add up. I finally figured it out as I leaned back in my chair and thought it over. They were right about everything: cut unnecessary spending, pay off loans quickly, invest in yourself first, buy according to your cash situation, and don’t go into credit card debt. All of that is spot on, and what I teach is, too. But it takes a lot of willpower to pull all that off."

 

 

 

I respect you all. It would be great if everyone had a strong will like our teachers, but unfortunately, that's not the case. That's probably why people like you are so rare. Once again, the group exchanged glances and smiled, and it seemed like Jimmy was hinting for Su to speak up. What’s ahead is a classic way to make money through investing. But the truth is, most people can’t pull it off. You don’t need willpower for this, but we’re not the strongest-willed people either. If willpower were key to following our parents’ advice, we probably wouldn’t be where we are now. We might not have accomplished anything at all. Jim responded, saying Su is pretty good at controlling himself, but I’m the opposite. Nowadays, even the government tempts us to act entirely against our parents' advice. So how is that possible? How have we managed to stick to our principles and resist those temptations? Ultimately, Jim spoke up, saying we were younger than the teachers.

 

 

I have a daughter, so I get how tough it is to save money in your twenties. But the great thing about our investment strategy is that it doesn’t require willpower. I could see the doubt in his eyes and understand why he wouldn’t just take my word for it. It seems so simple and obvious, even to someone like you who knows much about money. Think about it: you know you should do something but hesitate because you’re scared of not following through. So, what can you do actually to take the right action? I just shrugged at Jim's questioning look. Like I said, it’s straightforward and clear. You need to let go. You set things up so that it happens automatically. Remember when we talked about investing in ourselves first? I set it up so that when my paycheck comes in, it automatically goes into my savings account. The key is that this whole process runs on autopilot.

 

 

Once you set it up, you don’t have to think about it again. You can walk away, literally. It’s like the systematic saving or investment programs I discussed. The only difference is that it applies to your overall financial management. That’s right, Jim shouted. If you completely ignore it, you might even forget about it, and you can't change your mind or intentionally avoid it. You can’t mess it up because it's out of control. My parents used to say that's how you protect yourself. You don’t even need to worry about having weak willpower. All you need to do is commit to getting rich in the first place, and that’s it. If you just set up automatic transfers from your paycheck, you can create a system that helps you get rich automatically. I made sure my company set up my paycheck to go directly into my retirement fund, and I paid off my mortgage similarly. Once banks introduced automatic transfer programs, my loan repayments were automatically deducted from my account every month. Plus, I put a portion of my income into mutual funds.

 

 

 

"I set everything up for automatic deposits and even automated cash donations. I used to donate a little to charities yearly, and automating that made things much easier. Jim mentioned that the amount of money I have now is impressive, but it wasn’t like that at first. Initially, I only pulled out around 50,000 won from my paycheck every month. But it gradually increased. I reviewed their financial statements and saw that my total assets had grown to billions of won. Wow, that’s incredible! But Su shook his head and calmly said, 'It's not that amazing. Anyone can do what we did. We decided to become wealthy at a young age and built an automated system to ensure we wouldn’t fail. It’s all about just doing it, like Nike’s slogan. Our motto was to automate the system.' Jim nodded in agreement. When we started this approach, automation technology was still in its early stages, and most of my friends didn’t trust it. But now, it’s so easy that managing finances is a breeze."

 

 

All it takes is just a few minutes to automate your management. My daughter Lucy took about 30 minutes to set things up, and now she's on the path to becoming an automated millionaire like us. It's all about enjoying life while saving money—there's no need to be stingy to get rich. We didn't live that way. Over the past 30 years, we enjoyed life enough, not more than others, but enough. Plus, we didn't have to stress about money every single day. The McIntyres left my office hand in hand, just like a newlywed couple excited about the future. I sat at my desk for a while, reflecting on what they said. The key to their financial success was becoming someone who could succeed. There's no need to take the tough road when there's an easier path to wealth. They were spot on. Anyone can become an automated millionaire if you know what to do and automate it. Meeting McIntyre was a real eye-opener for me.

 

 

It became a turning point in my life. I realized that automating everything is the first step to lead to continuous and positive changes in my finances. Following what I learned that day, I automated all my financial management. And the result? Of course, it was a huge success, and now I can confidently say I've become an automatic millionaire. If you apply the experiences of the McIntyre couple in real life, anyone can quickly become wealthy. It’s worth repeating this part multiple times. I also looked into whether I could automate things right away. I was using Kakao Bank and found out I could set up automatic transfers myself. Previously, I manually sent money to three accounts: my retirement savings account, IRP account, and CMA account for investments. But now, I’ve set it all up to run automatically. I also heard that I can automate buying ETFs in my retirement savings and IRP accounts, so I’m looking into that, too.

 

 

I'm currently buying a certain amount of S&P 500 and Nasdaq tracking ETFs, like SCHD, through my pension savings account and IRP account, and I'm trying to automate that process. This way, I can invest without thinking about it every month. If I keep this up for a long time, I'll naturally become wealthy. If you haven’t set up automation yet, I encourage you to figure out how and try it. The key is to save at least 10% of your income by spending less than you earn. But since human willpower can falter, automating the transfers as soon as you get paid is essential. The second point concerns becoming rich with just a few thousand won daily by eliminating unnecessary expenses. For those watching who haven’t subscribed yet, please consider hitting that subscribe button and giving a thumbs up. If you’re interested in the book I mentioned, you can buy it using the tag in the bottom left corner of the screen; it helps me keep the channel going. Thanks!

 

 

Let's look at the lessons we can learn from the McIntyre couple. There are so many, but if I had to pick just one, it would be this: how much you earn has almost nothing to do with becoming wealthy. Remember what Jimmy said? He never mentioned his salary or how much he made from investments. He said the secret to saving money faster than others was not spending it on unnecessary things. Most people probably can’t understand this idea because they’ve been taught the opposite. Unfortunately, this mindset has its flaws. People think it's okay to spend all the money they earn. But if you keep doing that, you’ll find yourself stuck in a cycle of working, earning, spending, and then having to earn more to keep up. Most people typically have less than three months’ worth of expenses saved up in the bank, and that’s usually because they're spending too much on things they don’t need. For some, it could be the cost of fancy coffee, while for others, it might be money spent on cigarettes or alcohol.

 

 

Most people don’t pay much attention to how they spend their money. They only focus on the significant expenses and ignore the small, everyday costs that add up. They don’t think about how much time they’ve spent working just to cover those little costs. The more significant issue is that they fail to realize that even a tiny portion of that wasted money could be invested to create substantial wealth. It doesn’t matter how much you earn—whether a lot or a little—if you use the latte factor wisely, you can enjoy true wealth and ultimate freedom. You can start living a wealthy life by leveraging the latte factor. Instead of working for money, you let money work for you. The latte factor refers to the funds you casually waste on things like coffee, which could be saved or invested instead.

 

 

To become a wealthy person automatically, you need to accept that it doesn't matter how much you earn; you can still become rich with the money you're making right now. I can't stress enough how vital this belief is. It's something you should grasp not just in your head but also in your heart. Only then can it truly change your financial life. When people review books like this, they often wonder when they'll get rich from saving small amounts. But the truth is, if you let those small amounts grow over time, they can turn into a significant sum. I had a conversation with someone named Kim during a lecture. This person spends around 1,200 won a day on coffee or snacks. But he explained what would happen if he invested just 5,000 won a day instead of that. At 23 years old, if he puts 5,000 won into a retirement fund daily, that adds up to 150,000 won a month, about 2 million won a year. And if he keeps this up for 50 years, considering the average returns of the S&P 500, it can add up.

 

 

If you get a 10% return, you might wonder how much your retirement fund will be when you're 65. Well, it could end up being around 1.2 billion won. That means you'd have that amount if you invest 2 million won a year at a 10% compound return for 42 years. Someone might ask, "What if the investment return isn’t 10%?" No worries! Let’s say it’s 6% instead. You can still accumulate several hundred million won. I quickly did the math, and at a 6% annual return, you'd end up with about 559.5 million won. The important thing is that you can still become wealthy no matter how little you save. And the sooner you start, the richer you can get. Find those unnecessary daily expenses—like coffee, bottled water, snacks, or fast food—and turn that money into investments. Even investing just 5,000 won can grow into a significant amount over time.

 

 

I'm not saying that a cup of coffee doesn't bring simple joys or that I don't know the refreshing feeling of smoke. It's just that using coffee or cigarettes as examples highlights the risks of spending hard-earned money on trivial expenses. We all have our little indulgences, and often, we don't realize how much we've spent until we look closely. The sooner we recognize these unnecessary costs, the quicker we can start cutting back. When I thought about it, I figured I was pretty frugal, but once I looked, I found several areas where I was overspending. So, I’ve decided to cut down on these pointless expenses. The text explains how these little costs can add up—spending 5,000 won a day for a week means 35,000 won a week, which adds up to about 150,000 won a month. If you invest that 150,000 won in something with a 10% annual return...

 

 

If you save 940 million won over 40 years and invest 10,000 won like this, it’ll grow to 1.89 billion won in 40 years. Now, if a couple saves 20,000 won a day, that adds up to 3.79 billion won in 40 years. This is all about the power of investment returns and compound interest. So the sooner you realize this and start investing, the more incredible your returns can be over the long haul. A lot of people worry that due to inflation, that money won’t be worth much in 40 years. But think back to 10 or 20 years ago when having 1 billion won was a big deal—now, it might not seem like such a big deal, but it’s still a significant amount. Take a good look at these numbers. Seriously, break them down and think about it. Can you save 5,000 or 10,000 won a day from what you spend? I believe your answer will be yes. The amounts we’re talking about are based on your current salary.

 

 

Just keep in mind that it's only about an hour. Is there a reason you can't invest an hour for yourself? Even if you compromise a hundred times, it's worth considering. It’s saying you should invest the money you earn in just one hour of work into yourself first. But when I say this, many people think, “Yeah, but…” They might say things like, “Sure, but getting a 10% return is impossible,” or “Yeah, but if prices keep rising, 1 billion won won’t mean much in 30 years.” They try to back out with those excuses. But that’s not true. Over time, the value of 1 billion won won’t drop like you think. If you don’t start saving now, you’ll have nothing left in 30 years. Then people say, “Yeah, but saving small amounts won’t help because there’s no good time to invest,” or “Investing requires big money.” That’s not the case anymore; you can set up an automated investment plan with just $1 daily. And then they say, “Yeah, but I’m not wasting a single dollar, so I can’t save anymore.”

 

 

Are you being serious? Please take a moment to clear your head and keep reading because what I'm about to say isn’t true at all. You might think you're not wasting a single penny, but if you dig deeper, you'll find areas where you are wasting money. This is such a great topic, and now let’s move on to the third point: automate your investments. First and foremost, invest in your future self. Automating your investments means setting it up so that your assets are bought automatically. Here’s my simple suggestion: starting today, dedicate at least an hour a day to work for yourself. This means you should invest at least 10% of your total income into a retirement fund that gives you tax deductions. So, you need to focus on where to invest that money. You should invest in a retirement pension that offers tax benefits. In our country, retirement pensions are split into DB and DC types. For the DC type, you can invest the funds you receive, and if you don’t have that, you can use an Individual Retirement Pension (IRP).

 

 

They say investing in a retirement savings plan is a good idea. Why? Because it helps you save on taxes and delays the tax you pay on your income. So, commit to investing in yourself for the future. Open a retirement account and contribute 10% of your total income. Also, set up automatic contributions, so the money gets transferred and invested automatically. Let’s figure out how much you’d need to save each day. If you have an annual salary of 50 million won, your monthly pay is about 4.2 million won, which breaks down to around 140,000 won a day. If you save 10% of that, you're putting away 14,000 won daily. But how much could you lose if you don’t invest this money in yourself? If you contribute 420,000 won every month for 35 years into a retirement account with a 10% return, how much would you end up with? It would be over 1 billion won—it’s closer to 1.6 billion won! That's the price you pay for not investing in yourself first.

 

 

So basically, if you put away 420,000 won a month into a retirement account for 35 years with a 10% return, you could end up with around 1.6 billion won. There's also a guideline for how much to invest in yourself based on your income level. A lot of people wonder what percentage of their income they should save. Let’s set aside the broke folks for now. For the middle class, it’s about 5 to 10% of your total income that you should invest in yourself. The upper middle class should aim for 10 to 15%, and the wealthy should put aside 15 to 20%. If you want to retire early and be rich, it’s recommended to invest at least 20% of your total income in yourself. It sounds simple enough, but honestly, not everyone agrees with the idea of investing in themselves. Some might even get angry about it. They might have a lot of reasons in their heads as to why it won’t work. They could think, “This isn’t enough; what’s the secret to getting rich?” They might wonder why no one talks about investing in stocks or mutual funds or how to achieve that 10% return.

 

The good old days are long gone, and I'm left wondering where to find ways to buy real estate without any money. I know you might think that, but if you don’t commit to investing in yourself first, you’ll never become rich. No amount of reading finance books, attending seminars, or subscribing to magazines will matter if you let the government or others take your paycheck before investing in yourself. Investing in yourself is the most essential step to getting wealthy. You’ve already promised to invest in yourself, so now you must decide two things: first, what exactly will you invest in? Second, where will you put your money? The answers to those questions will be detailed later, but to sum it up briefly, as I mentioned earlier, set up automatic transfers to your retirement account and then invest in stocks, bonds, and cash. For cash, consider using a CMA.

 

 

So, we're talking about investing in an MMF. Here, they’re discussing an automatic wealth-building investment pyramid that breaks it down by age groups: teens to their 30s, 30s to 50s, 50s to 60s, and 60s and up. They explain how much to invest in each stage in growth, stability, cash, and bonds. You should focus more on development and stability when you're younger, putting about 15% into bonds. As you age, you should shift towards more bonds and cash while reducing investments in growth and stability products. I think it's good to buy individual stocks or ETFs that track the Nasdaq 100 for aggressive growth. For stable income, I'd go for an ETF that follows the S&P 500 or SCHD, which focuses on high-dividend stocks. That’s how I invest. There's also a summary on one page at the back that covers all this, and it's all in the book. So, when you receive your salary, you should transfer some to your retirement account, then put 5% of your income into an emergency fund in cash.

 

 

This cash is used  CMA MMF, and then you automatically transfer it to your Dream Money account to do what you want. This can also be MMF or a regular deposit. You can split electro your credit card and regular expenses into different accounts for these automatic transfers, and it’s also good to set up auto-donations to pay monthly. So this seven-step plan is called the Automatic Wealth Design, and the book explains it in detail. The ultimate goal is to invest at least 12.5% of your total retirement income, roughly the amount you make in one hour of work daily. This wraps up the review of "The Automatic Wealth Habits" by David Park. We looked closely at the real experiences of retired, automatically wealthy people in their 50s, and you can follow what they did. The book explains how to buy a house and pay off loans quickly, so buying a home is possible. I think this book is excellent, and one of our subscribers commented on it.

 

 

I picked up this book on automatic wealth habits because I heard it was good. I had meant to check it out before, but a comment from one of my subscribers finally pushed me to read it. Feel free to drop a comment if you know of any good books, and I'll take a look and see if I can review them. If you found this video helpful or are looking forward to the next one, please give it a thumbs up and turn on notifications. Also, since today's content is essential, I’d appreciate it if you could share it with anyone you think might benefit from it. Thanks for watching for so long, and I’ll be back with more great content next time. Thanks again! Legendary money coach Bodo Schaefer, who has created countless millionaires, said that money works for those who understand and follow the laws of capital. Those who grow their money become wealthy, while those who ignore the rules for increasing money lose what they have. Compound interest creates miracles. If you understand the power of compound interest, you're in for a treat!

 

 

Once you realize its power, if you don’t use it, you’re ignoring the laws of capital growth. Three key factors play a role in growing your wealth through compound interest: time, interest rate, and investment amount. For example, let’s say your grandma invested 1 million won for you 50 years ago, and it earned an average of 20% a year. That 1 million won would be worth about 9 billion won now. Hey everyone, welcome back to our book reviews! Today, I'm excited to talk about "Money" by Bodo Schäfer, which I highly recommend among personal finance books. If you're interested in wealth-building, this is a must-read. Bodo Schäfer isn’t just known for his finance books; he’s a popular motivational speaker and money coach. He even reached a point where he could live off just the interest from his investments at 30! Now, he’s got an incredible fortune. In this session, we’ll examine the principles that most billionaires stick to: 1. Compound interest creates miracles. 2. The three stages to financial freedom: 1) Financial safety net stage, 2) Financial stability stage, and 3) Let's talk about the stage of enjoying financial freedom. Now, let's dive into the book. 1. The magic of compound interest. Money is meant for those who understand and follow the laws of capital. If you know how to grow your money, you’ll become wealthy. But you'll lose what you have if you ignore the rules of increasing money. The issue is straightforward: let’s look closely at the miracles created by compound interest. If you understand its power and still don’t use it, you ignore the law of capital growth. In that sense, being poor results from neglect, not a virtue. First, consider how quickly money can grow, using a few examples. Start creating new income sources. Open a savings account and put in 100 won in the first month. In the second month, double that to 200 won. At the same time, start looking for additional income streams. As your plan kicks into gear, your savings will take about 14 months to reach a certain level. Make sure to manage this period wisely.

 

Create a new source of income using this. By the 16th month, you should save about 3.27 million won, 6.55 million won by the 17th month, and 1.31 million won by the 18th month. Let’s look at the chart: it shows numbers increasing like 100, 200, 400, 800, 1600, and 3200, which illustrates how compound interest works—your principal doubles over time. You need to push yourself to maximize your skills and grow to achieve this. You’ve got to pour all your creativity and effort into it. It won’t be easy, but it’s worth a shot. In just a year and a half, you could end up with around 2.621 million won that you wouldn’t have had otherwise. From the money you save, use 6 million won as a reward for your hard work, and invest the remaining 20 million won. After 20 years, with a 12% interest rate, you'll see nearly 200 million won. The key factors determining your returns are compound interest, time, interest rate, and the amount you invest—those are the only three things that matter. Now, let’s break down these three elements. First, consider interest rates like 12% or 20%.

 

 

I'm gonna start with high interest rates. This kind of interest rate is achievable. Stocks in Germany have shown an average annual return of 12% since 1948, and plenty of good funds outperform that. Getting a 12% or even 20% return isn’t that rare. You’ve probably heard that time is money, and here’s why: let’s say you start saving 200,000 won every month when you’re 30. If you earn 12% interest on that, by the time you hit 65, you’ll have around 1.04 billion won. That’s possible because you gave your money 35 years to grow. But if you wait until you’re 45 to start, you’ll only have 20 years left. With the same interest rate, by 65, you’d end up with about 1.05 billion won. So, it's clear how valuable that extra time is for your money.

 

 

You need to boost your savings to a whopping 1.2 million won, six times what you have now. If you start at 55, you’ve only got 10 years left. To hit 1.05 billion won, you’d have to put in 5 million won every month. So, to save that amount, you could either save 2 million won a month for 35 years, 1.2 million won a month for 20 years, or 5 million won a month for 10 years. Remember, the earlier you start, the easier it gets. That’s the key to investing—starting early is super important. But it’s tough to think about the future when you’re young, and that’s why people often regret it when they get older. That’s why saving for your kids is so crucial. Even more important is setting a good example for them. If you save 50,000 won every month from the day they’re born, with a 12% interest rate, by the time they’re 35, they’ll have about 260 million won. And just as important as time is the interest rate. There’s a saying that time is money; it means that time can bring in more money.

 

 

Here's something to think about: many people might think it’s crazy, but I will introduce you to some high interest rates. Every year in Germany, thousands make over 20% returns on their investments. Let’s look at some numbers to see why high-interest matters and how much of a difference it can make. The difference between 7%, 12%, 15%, and 21% is huge! If you invest 50,000 won every month for 35 years, the returns would vary drastically based on the interest rate: - At 7%, you'd be looking at around 83 million won. - At 12%, it jumps to 260 million won. - At 15%, it’s about 530 million won. - And at 21%, it skyrockets to 2.33 billion won! Here’s another example: if you earn triple the interest, the money coming in isn’t just three times more—it’s almost 30 times more! Let’s say you invest 1 million won. What will you end up with after 30 years at different interest rates? - 7%: about 7.6 million won. - 12%: around 29 million won. - 15%: roughly 66 million won. - 21%: about 237 million won. Just think about it—1 million won tied up for 30 years can make a difference!

 

 

Making 7.6 million won isn’t going to change anything, to be honest. I might as well blow it all instead. But if that money grew to 30 times at a 12% interest rate or even 37 times at a 21% rate, that’d be something to consider. Imagine your grandma invested 10,000 won for you 50 years ago, averaging 20% interest. What do you think would’ve happened? That 10,000 won would be worth 9 billion won today. If you don’t have 9 billion won, that’s on your grandma. So, you had better take action in time so your future grandkids don’t hold you accountable for that. How much are you going to invest? The whole thing boils down to two questions: 1. How long does it take for your investment to double? What’s the interest rate? 2. How much money are you going to double? No matter how great the interest rate is, if you multiply it by zero, the result is still zero. Fifty million won isn’t a crazy amount of money; it’s just enough to buy a nice car. In that light, 50 million won is just the starting point.

 

 

"That's not a small amount to just throw around, but if you invest that money wisely, it could grow to 500 million in 20 years with a 12% interest rate. That’s why smart people save—they look beyond the immediate 50 million to the potential 500 million down the line. Without capital and investment, it isn’t very sensible. It’s only in this age of capitalism that anyone can become wealthy. Countless millionaires and billionaires have been born from the capitalist economy, all thanks to the opportunity for capital growth through investment. And as we moved into this capital era, compound interest started playing a crucial role. Most millionaires and billionaires have harnessed the magic of compound interest. Capital investment is beneficial for investors because of the returns. Investors can participate in business activities without having to become entrepreneurs themselves. Plus, it’s advantageous for entrepreneurs too because they can build and expand their businesses faster using other people's money."

 

 

You can't expect fast growth, but all the later big companies were built on borrowed money. Take Walmart's founder, Sam Walton, for example. He bought a small store in a little town in the U.S. with money he borrowed from a craftsman. Then, he gradually grew it into a huge business. The chance to borrow money was a blessing; he lived the life he dreamed of. Let’s look at what the people who invested in Sam Walton's store in 1975 got out of it. One investor who put in 45 million won saw that grow to 1.6 billion won ten years later. If he had just left that money alone, by July 31, 1995, it could have been worth 13.3 billion won. Turning 45 million won into 13 billion over 20 years shows the power of investing and compound interest. The Walmart story is just one among many success stories. Think about it: capitalism has the word "capital" in it. If you don’t leverage capital and investments, capitalism becomes just a meaningless word game for you.

 

 

Living economically back then was like being stuck in the Stone Age. Even capitalism only benefits those who know how to handle and manage money well—those who don’t get crushed by it. The ancient Babylonians already knew this: money is meant for those who understand and follow the rules of money. We’ve discussed the importance of compound interest in getting rich. I thought many of you would already know about it, but there are still quite a few who don’t. If you need more info, check out the internet or YouTube to learn about it in detail. The key principle to making money through investment is the compound interest rule. The second step to gaining financial freedom is a three-step process. For those watching who haven't subscribed yet, please hit that subscribe button and give a thumbs up. We’re close to 170,000 subscribers, and it means a lot to me. Now, let’s dive into the book's content. Achieving happiness involves two...

 

 

There are two ways to go about things: shrink your hopes or expand your means. A wise person tries to do both at the same time. - Benjamin Franklin. Anyone can chase their financial dreams, but to achieve them, you first need to understand what those dreams entail. How much money do you need to enjoy complete financial freedom, and how long will it take? So, let’s break it down: First, you need to set up a financial safety net. You’ve probably heard a lot about how important it is to set clear goals, but how seriously do you take that when it comes to your finances? Think about this: what if your income suddenly stopped, and the people you lent money to didn't pay you back? Or what if you lost your job or got sick? How long could you manage in that situation?

 

 

Let's break it down. First, figure out the minimum amount you need to spend even in a crisis. For example, let’s say it’s 300. The cost of these veggies might be necessary for a few months, and it varies from person to person, but generally, you should have enough to cover living expenses for about 6 months to a year. This way, you’re not overly stressed while looking for new income sources. Now, imagine you got sick and had to quit your job. How long do you need to get healthy and find a job you like again? Let’s say at least 12 months. Multiply that minimum cost by the number of months you might need: 300 times 12 months equals 3,600,000 won. This amount is your financial cushion, like an economic airbag, that you need to take care of your health and emotional well-being. And don’t forget, you have responsibilities to your family too. Even if no crisis happens for a long time, having this amount saved up will help you feel secure. So, how long does it take to build up this economic airbag? It's pretty straightforward.

 

 

Rules apply: the smaller your goal, the quicker you can reach it. This doesn’t contradict the earlier advice to aim high. The long-term goal should be ambitious because the bigger it is, the more likely you are to achieve it. But having a financial safety net isn’t a long-term goal; it's your next immediate target and the one you need to hit the fastest. So, if you can live comfortably on just six months’ worth of expenses, you can plan around that. The minimum isn’t necessarily 3 million won; it could be less—like 1 million or 2 million won—which would shorten the time it takes to build your financial cushion. Here are three reasons why smaller goals are beneficial: 1) Setting a small first goal means you can reach it quickly. 2) Living on less allows you to save more, reducing the time needed to secure your financial safety net. 3) Having your goal right in front of you motivates you to push through. Create a budget plan.

 

 

I'm not a fan of meticulously planning a budget, but everyone should check how much money they spend each month at least once. If you still haven’t built up a financial cushion, it’s essential to look at your spending habits. For those who don’t have any savings, it’s crucial to review your expenses and redirect any unnecessary spending into savings so you can establish that safety net as soon as possible. Once you start honestly jotting down your expenses, you might be surprised by what you find. First, write down all your income and expenses. Just listing them isn’t an entire budget yet, but it’s still valuable information. You’ll likely realize that you’re spending more on education, car maintenance, and communication than you thought. Creating a budget starts after you’ve made a complete list of all your costs. There are two main ways to go about it: 1) Next to each spending item, write down how much you want to spend on it. Just make sure these amounts are realistic.

 

 

Don't overthink whether it's feasible or excessive—write it down. Sometimes, plans will happen independently, even when things seem impossible. First, figure out how much you want to spend in total. Write down that goal amount, then think about what you can reduce to stay within that budget. If you realize your spending habits are inefficient, it’s time to make some lifestyle changes. Start cutting back on expenses and dining out. On the flip side, if you feel like you're already living frugally, just recognizing that can be meaningful. But if you spot any issues, you need to find a solution. Would you choose to earn more or spend less? There are two ways to achieve happiness: reduce your desires or increase your means. But whether you have a lot or a little, whether you're healthy or not, young or old, a wise person usually finds ways to do both. And a sagacious person contributes to society while doing so.

 

 

"I'm going to add a few things. Now, you should choose an easier way for yourself. Please pursue both methods at the same time, but no matter what, don't stop until you secure your financial safety net. Once you do that, you're halfway to success. The next part isn't that hard. Starting anything is the toughest part. Remember, even easy things can be hard at first, and tough things often become easier later on. Bowing isn't hard, but if it's your first time, it can feel awkward. You have to push through that. To wisely invest the money you've saved up, you need a bit more skill, but there are plenty of easy investment options, so it’s not that tough. So, decide how much you want to save after you plan your budget. When your paycheck comes in, the key is to automatically transfer that savings amount immediately. You should take out your savings before you spend anything. As for managing your financial safety net, let me share one basic principle: the most important thing is this money."

 

 

You need to keep things safe. To avoid risks, you have to accept lower returns. If you don’t, the benefits of having a financial safety net will diminish. Also, you shouldn’t rely on this safety net unless it’s a real emergency. Speculative investments are even riskier. Securing a financial cushion might seem harsh, but not having one can lead to much bigger problems. Once you have that cushion, you’ve already taken an essential step toward your long-term goal of financial freedom. So, as mentioned later, your financial safety net should comprise low-risk options like savings accounts, fixed deposits, CMA, or bonds. Step 2: Achieve financial stability. Once you have your financial cushion in place, the benefits are plenty. You can weather any crisis and live with a sense of psychological security. However, an essential financial safety net has a critical weakness. If an emergency hits, your savings might not be enough.

 

 

You need to spend money. You can get through the crisis if you do, but the money will eventually disappear. To set up a solid safety net, you must save enough money to live off the interest. First, write down your fixed monthly expenses that you have to pay no matter what. I've lowered it to 250 now. So, I've noted the minimum amount you need each month to maintain a certain standard of living. You might think that your goose should lay bigger golden eggs, right? Well, first, that goose needs to be more significant. In other words, you need enough funds to cover those expenses with interest. The interest rate is a factor, but let’s cautiously calculate with an 8% interest rate. The key point is safety. Here’s the formula: multiply the amount you need each month by 150 to determine how much you need. To earn 3 million won in interest each month, you need 450 million won. So, 3 million won multiplied by 150 equals 450 million won. You don’t need to catch the goose if you have that money because it will keep laying golden eggs for you.

 

Living solely off your money is what we call financial stability—a point where you don’t need to work anymore. Let’s figure out how much you need to secure that stability. If you need 250 a month, multiplying that by 150 gives you 375 million won. So, what should you do next? To clarify, let’s consider how much money you need to save. Many just throw out numbers like 1 billion, 5 billion, or 10 billion without knowing the exact figure. But if you do the math, you'll see it’s not as much as you think. You could maintain your everyday life with just 400 to 500 million won, which can generate enough money automatically for your needs. Now, imagine you only have 6 months left to live. What’s the last thing you want to do? Where do you want to go? Who do you want to be with? What legacy do you want to leave? Sure, you’ll probably live longer than 6 months, but it’s a reminder that life isn’t forever.

 

 

You can’t underestimate how important it is to focus on what matters to you. What could be a more significant obstacle than money? Ignoring your financial needs is a risky move. You need to let the sunshine into your life; even a tiny amount of money can make a huge difference. Just think about how much this money could change your life. If you can make enough to cover your living expenses while doing what you love, your satisfaction with life will be completely transformed. Many people don’t pursue what they truly enjoy because they feel stuck financially, which is a real shame and a waste of energy. When we get the chance to do what we love, we can unleash our potential. If you’ve never had the opportunity to dive into a project you’re passionate about, you’ll never know how much potential you have inside you. Most amateurs only focus on the present.

 

 

Many people tend to focus on future goals, which often leads to repeating the same struggles over time. They don’t realize that through savvy investing, they could create a situation where they don’t have to worry about money anymore. Professionals take a different approach; they live in the present while preparing for the future. They understand the importance of paying themselves first. You can become a money expert, too! The third point is enjoying financial freedom. Some might think that achieving financial stability is enough, but many people want much more than that. In other words, they want true financial freedom. Reaching that freedom is a dream we all share. Many people fail to achieve the lives they dream of simply because they don’t think concretely about what it takes to get there. They don’t realize how much it costs to make their dreams come true or how much funding they need. Start by making a list of everything you desire.

 

 

"Don’t worry about whether it’s possible or not; just write it down. First, determine your dreams and how much they’ll cost. 2. Once you’ve listed everything you want, jot down an estimate of how much it’ll take to get each one. 3. Remember, you shouldn’t go for anything that’ll cost a ton right away—you should buy those on installment. In that case, calculate how much your monthly payments will be. To keep it simple, let’s say real estate is for 120 months, and other stuff is for 50 months. For example, if you’re talking about a house worth 1.3 billion won, divide that by 120, and you’ll be paying around 10.8 million won each month, plus interest. If you love travelling and spend about 7 million won a year on trips, you can break that down into 12 payments of around 580,000 won a month so that you can travel every year at the same cost. Aim to set aside about 10 million won monthly to make your dreams happen."

 

 

"First, make a list of your monthly living expenses. This is what you'll need to cover even after you gain financial freedom. Of course, these expenses also need to be paid from your investment income. And since your cost of living has gone up, you should factor that in too. So, let’s say your total monthly living expenses are around 1.5 million won. If you add these two expenses together, that’s how much you need every month for financial freedom. To cover the costs you've calculated, you’ll need a substantial amount of money that’s properly invested. Let’s assume an annual return of 8% for this calculation. Just like before, to figure out the total amount of funds needed, multiply the monthly amount by 150. So, 1.5 million won times 150 gives you 2.25 billion won. That’s the amount of money you need to achieve all your dreams. It’s really important to find the best ways to invest your money step by step to reach that goal."

 

 

We often set vague goals like saving 5 billion or 10 billion won, but you can actually achieve financial freedom with much smaller amounts. By figuring out a target amount that fits your situation, you can really make progress. I encourage you to write it down and calculate it yourself. When your goal is clear, it gives you a lot more motivation to save and invest. Now, let’s talk about a three-step investment strategy for financial freedom. This is about safe investments that act like an economic safety net. Before you secure your financial stability, you need to avoid risks. So, focus on stable investments. And even if you’re investing in something that seems super safe, remember to diversify. Don’t put all your money—like just 5 million won—into one place. Diversifying your investments can lead to higher returns. I always suggest investing in large, well-established funds as a good way to build that financial safety net.

 

 

Safety comes first. Be okay with lower returns and keep part of your money in cash at the bank. Like I mentioned earlier, I think it’s really important to save money using tools like CMA, MMF, bonds, or savings accounts. For achieving financial stability, I suggest a 40-40-20 investment strategy. To get that stability, spread your money a bit differently: put 40% in safe places, and then invest 40% with a little risk. I’d recommend looking into the S&P 500 index or SCHD ETF for that. If you leave the invested money alone for a while, you can significantly reduce risk through dollar-cost averaging. The remaining 20% should be invested more aggressively in high-return funds or country funds, which can carry higher risks but also the potential for higher returns. Just remember, don’t put your money into speculative products or overly risky investments. And again, keep that invested money in for the long haul.

 

 

You need to have some money set aside, and I think it’s a good idea to invest the remaining 20% in a Nasdaq-backed ETF focused on growth stocks. Think Nvidia, Tesla, or Apple. For achieving financial freedom, a 50/50 investment strategy means once you’ve secured your financial stability, you can take some of that money and use it to pursue financial freedom. At this stage, it’s okay to take a bit more risk. Look for investment products that can provide at least 20% to 30% returns. Basically, if you've hit your financial stability goal, keep that money invested as is, and invest any extra cash in products that can give you those higher returns. Even if you take a hit with one or two investments, you can easily cover those losses with gains from others. No matter what anyone says, invest within the limits of your already secured financial stability. I’ll sum up this three-step investment approach using the analogy of filling a bucket: always start by filling the first bucket before moving on to the second.

 

 

"First off, make sure your financial stability is solid by saving up enough cash that you can easily overflow your savings. Use that extra cash to fill your next bucket. This way, your financial safety net is never at risk, and as long as you follow this investment philosophy, you won’t fail. You’ll always be in a secure spot where you can make your dreams and life goals happen, one step at a time. Basically, you set up your financial cushion with cash savings, and you achieve stability through safe investments with a 12% return. If you accumulate more than that, then you can invest in high-yield assets for aggressive growth, and any money that goes beyond your target return of 20 to 30% should be invested wisely. Once you set your goals, you’ve already made half the progress. The key takeaway is that you need to be fully committed. If you’re not serious about it, just put this book down and walk away. Achieving your goals requires a firm resolve."

 

 

It's time to get started. You need to have the mindset that if you don't reach your goals, you'll feel a lot of pain, but when you do hit those goals, you'll experience endless joy. You should also know exactly why you want to live that kind of life. Every day, you should push your boundaries and give it your all. Keep learning and growing constantly. You need to put in 110% of your abilities and unleash your full potential. So, I'm wrapping up my review of this money book. Whenever I read, I usually start with the part that talks about how to think about making money and what money really is. I think it’s important to introduce that part, but as I get further into the book, it really dives into how to actually increase your income, the significance of compound interest, and specific ways to achieve financial freedom. That early part is so crucial, so if you're interested in this topic, I highly recommend you give this book a read.

 

 

"I really appreciate your support! If you found this video helpful or are looking forward to the next one, please hit that like button and subscribe with notifications. The content in this book is great, and what I shared today is super important, so I’d love for you to recommend and share it with others. Thanks for watching for so long, and I’ll definitely see you next time with another great video. Thanks again!"