how's it going today guys welcome back
to the channel hope you're having a
great day so far so what we're going to
be talking about in this video today are
the three biggest things out there that
are absolutely keeping most people broke
now I don't think I'm going to be making
any friends in this video because I'm
not holding anything back here these are
honestly three of these things out there
they are going to be putting a huge dent
in your wallet now I'm not telling you
guys to avoid these things at all costs
all I'm trying to say is at least plan
for them and understand how big of an
expense these three things can be for
you okay so number one the first thing
on my list here as far as things that
are keeping people broke is going to be
children now I know I'm gonna get a lot
of people saying that I'm some kind of
jerk for saying that but the honest
truth is raising a child is extremely
expensive so every single year the US
Department of Agriculture releases
figures on how much it costs to raise a
child and the most recent figure for
this is that to raise a kid from zero to
17 from birth to 17 is going to cost on
average two hundred thirty three
thousand six hundred ten dollars and if
you plan on having two three or four
kids just go ahead and multiply that
figure by that number and it could
easily cost you upwards of close to a
million dollars raising children now
again I'm not saying that you shouldn't
have kids just based on financial
reasons because obviously having kids is
not a financial decision it's something
that you do because you want to do it
and you want to have kids what I'm
simply saying is at least plan for how
much it's going to cost you financially
if you do decide to have children and a
better figure for this is looking at the
cost per year and in that report they
indicated a costs on average fourteen
thousand dollars per year to raise a kid
but we know that that's actually not the
true cost because that is assuming that
you just took that money and did
absolutely nothing with it what if you
instead of having a kid you know
invested that money what would that look
like and again I just want to restate
this I am not saying don't have kids at
all
I'm just saying planned for it
financially the true cost about $14,000
per year over 17 years
if you invested that in the market at an
8% return that is actually 472 thousand
dollars and that's actually the true
cost of having a kid because that is the
lost opportunity cost of that money
because you probably wouldn't take that
money and just plop it in the bank you
would be investing it and earning some
rate of return so the true cost of
raising a child from birth to age 17 is
about four hundred seventy-two thousand
dollars making this one of the biggest
things out there that are absolutely
keeping people broke okay number two on
the list hopefully I don't get as much
crap for in the comments section below
and that is driving new cars for your
entire life I hope that most of you now
know that cars are an absolutely
terrible investment in most cases
because they depreciate in value very
quickly and they just take money out of
your pocket month after month and a lot
of people get in this really bad habit
of buying brand new cars every five or
six years and I want to show you guys
just how much this is going to cost you
over your lifetime so according to
Experian the average monthly car payment
for a brand new car is five hundred
thirty dollars per month now if that
alone is not a shocking enough figure
how much is that actually worth over
your entire lifetime so if instead of
driving that brand new car you invested
that money how much money is it actually
costing you to drive that brand new car
so the cost of driving a brand new car
from age 25 to 65 at five hundred thirty
dollars per month is an astounding two
hundred fifty four thousand four hundred
dollars but if you instead took that
five hundred thirty dollars per month
and invested it again at an 8% return in
that time period you would have a
portfolio value of over 1.6 million
dollars so the true cost of driving a
brand new car from age 25 to 65 is
actually a 1.6 million dollar cost by
driving a brand new car and you might be
saying to yourself that nobody really
does this but I can honestly tell you
that I used to work with people at my
old job that would buy a new car not
every five years but literally every two
years this one person I worked with
would go to the dealership and trade in
her car for a brain
and it's just astronomical how much that
ends up costing you in the long run so
the second thing keeping most people
broke is driving a new car or just
simply driving a car that is more
expensive than they can realistically
afford and then third and finally the
third thing keeping people broke is
renting now you might be saying to me
right now that doesn't make any sense
because whether or not you're renting or
paying down a mortgage it's usually
about the same amount of money but that
is just not the case and I'm gonna show
you guys exactly why that is so let's go
ahead and look at two scenarios here
scenario one is if you are renting and
paying $1500 per month for rent and then
scenario two is instead if you purchased
a home and you were paying a $1,500
mortgage and right now that would buy
you a house worth about three hundred
fifteen thousand dollars that would be a
mortgage payment of $1,500 per month
well after 30 years that's the typical
length of a mortgage if you rent it for
that entire duration you have exactly
zero percent equity in that property
because you were never paying anything
down in the process you were paying down
the mortgage for somebody else and you
got no equity in the process after 30
years of paying down the mortgage on the
property you purchased you would own
100% and have a hundred percent equity
in that property now the total cost in
both of these scenarios is about five
hundred forty thousand dollars but at
the end of renting for thirty years
you're left with absolutely zero dollars
because you have no equity and at the
end of scenario two if you actually
purchase that home even though it did
cost you five hundred forty thousand
dollars in the long run that house would
likely be worth about eight hundred
fifty six thousand dollars once you
factor in the appreciation of the value
of that home and on average real estate
is appreciating at about three point
four percent per year and so basically
by purchasing your own home you hope
that you will eventually own it once you
pay down that mortgage and then you are
in complete control of an asset that
could be worth you know hundreds of
thousands of dollars now owning a home
is obviously not the best investment you
can make out there but it's certainly a
lot better than just renting for your
entire life in most cases so that is the
third thing that is keeping people broke
is not buying a home or
not owning their primary residence and
renting for their entire life now before
you guys get angry in the comments
section below I know that there are some
generalizations being made here and
obviously regardless even if you're not
driving a new car you're gonna have to
drive a used car and that is going to
come at some kind of expense for a car
payment or for your repairs and yes
there are expenses associated with
owning a home like repairs or private
mortgage insurance or HOA anything like
that but regardless of those other costs
you know these three things are what are
keeping most people out there broke and
these are mistakes that you can avoid
yourself if you're looking to be you
know financially well-off in the future
but anyways guys that wraps up this
video I hope you enjoyed it let me know
in the comments section below what you
think about this if you agree or if you
disagree with me I would love to hear
what you guys think if you're new to the
channel make sure you subscribe and hit
that Bell for notifications and I will
see you in the next video
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