00:00In this video, I'm going to share three bad money habits that keep you poor and stop you from
00:04growing your wealth. I think these three habits are fairly common, but no one actually teaches
00:09you not to do them. If you're new to this channel, I'm Matt. I've been a finance consultant for over
00:1410 years. I've worked for one of the top consulting companies in London. I now run my own company and
00:20on this channel, I talk all things personal finance. So let's get going with the video.
00:24The first one is thinking of income as only coming from one job. I grew up always thinking
00:30that you should work hard in your one job, try to get promoted and earn a bigger salary.
00:35I think a lot of us are brought up in a similar way, but the big difference between those who
00:40are earning a low or average income and those who are earning millions or more is that they have
00:45multiple sources of income. In fact, a study showed that 65% of millionaires have at least three sources
00:52of income. These can be from a variety of sources from real estate being rented out,
00:57earning dividends from stocks and shares, or earning income from businesses that they own.
01:02By spending time on adding passive income streams, I found my income exponentially grew. And as you earn
01:08more income, you're able to invest in new sources and create more income and your wealth keeps growing
01:14and multiplying. There are lots of videos on YouTube and online giving ideas of different types of passive
01:20income streams you could start up from scratch. And many of these, you don't need lots of startup
01:25money to get going with yourself. For example, it could be that you teach a short course online about
01:31video editing, and you can do this on platforms such as Udemy. The second habit is on how you manage
01:37your income and expenses and stopping the cycle of lifestyle inflation. As you earn more money,
01:42you spend more money. In London, in the city, I would always see people earning more and more money,
01:47getting promoted, increasing their income, but then spending it all on fancy new cars, designer clothes,
01:53or expensive meals out. If you can do your best to try and keep your expenses at a similar level
01:58or within your means while your income goes up, you'll find you're able to grow your wealth at a
02:03much faster rate. There's a great book called Rich Dad, Poor Dad by Robert Kiyosaki, which talks about
02:09the concept of paying yourself first, which is what rich people do. And what this means is instead of
02:15having the mindset of when money comes in, I pay all my bills and I spend my money, meaning at the
02:20end of the month, I've got nothing left to save. What rich people do is they have a different mindset.
02:26When money comes in, the first thing they do is they save a chunk of it, put it to one side and
02:31invest it. And then they manage their expenses and costs of living to be within the remaining amount
02:36of money they have for the month. You might be thinking, well, that's all well and good, but how do I
02:40actually do it? One of the things I found really helpful was to have an income and expenses tracker.
02:46It helped me to target where I wanted to get to, what I could save and invest. And it also helped
02:52me to target reducing the big ticket monthly expenses so I can manage my budget to be within
02:57my means each month. The third habit is bad debt. And I mean that in two ways. The first point is using
03:04credit cards and buying things when you don't have the money. There can be loads of tempting times,
03:09whether it's sales in the shops, whether it's the latest fashion trend or the latest technology
03:14launch or phone upgrade. But unless I have the money in my bank, I don't buy it. 46% of households
03:20in the US have credit card debt and the average interest rate on a credit card is 22%. Often people
03:27get trapped going month to month, paying off their credit cards, and it's a difficult spiral to get out
03:32of. I'm not saying don't use credit cards because there can be a lot of benefits in doing so,
03:37such as protection on your purchases. But the key is to only spend on credit if you have the money
03:43already to pay for the item. The second point is about over leveraging yourself. If you take out
03:48the largest loan you can afford to buy the biggest house you can get, the problem is the monthly
03:53payments are so high on the mortgage, you'll struggle to save anything each month and you end
03:58up paying massive amounts of interest straight to the bank. You get trapped in this cycle of earning
04:03to pay the mortgage, but with no savings to invest and grow your wealth. So try to pay off your high
04:08interest debt first and then look at your debt to income ratio and make sure you're still able to
04:14save and invest on top of paying back any mortgages or loans that you have. I 100% get these three money
04:21habits are not easy to stop doing as I've done all three of them. But if you can gradually make steps
04:26towards one or two of these at first, you'll make a difference to your financial stability in the long
04:32run and also your ability to grow your wealth. I hope this video has been helpful. Feel free to leave
04:37any questions in the comments and give the video a like and a subscribe and I'll see you on the next video.
Comments