THE 9 RULES OF MONEY 💰 How To Make More Money & Keep More Money! #Best Education Page #Online Earning

- How's it going today, guys.

So today we're going to be talking about

the rules of money.

So my goal with this video is to help you guys

save more money and make more money.

So basically, figure out how to earn more money

as well as keep more of your hard-earned money.

So these are nine fundamental rules to money

that you need to understand if you're looking to

accumulate wealth and earn more money and keep more of

the money that you're earning.

Mkay?

So I'm hoping this video will help a lot of people as far as

learning about how to make more money

and how to keep more of your money.

So number one, the number one rule as far as money goes,

is that gross does not equal net.

And this is something a lot of people confuse,

especially when it comes to investing.

A lot of people like to brag about their returns

on a certain investment,

and nine times out of ten,

they're talking about their gross profit,

not what they net after taxes.

So what I want you guys to do is,

no matter what,

when someone comes up to you and they're talking about

how they made a ton of money on a certain investment,

say, "Did you gross that or did you net that?

"Is that what you made after taxes?"

Because truthfully, nobody cares what you make,

everybody cares what you keep.

You know?

Does it matter that you made $100,000

if you only kept $60,000?

I would say that you should speak in terms of

what you make after taxes.

Okay?

So, many investors like to show off their returns,

and I always recommend, like I said,

asking them net or gross.

It's a good way to really tell whether someone is

educated about their investments or not.

Most people neglect to mention or factor in

the taxes of an investment.

Now, this can get you in a lot of trouble.

Let's say you're somebody who is trading stocks, okay,

and I'm gonna talk about here long-term versus short-term

taxes on a stock.

If you're paying short-term taxes on a stock,

and you're reinvesting all of your profits,

next thing you know, you gotta go pay taxes come April,

or whenever you file your income taxes.

And let's say you didn't set aside any money for taxes

and you don't have the money to pay out-of-pocket.

Now you're in a pinch because you have

your money tied up in other stocks,

and now you have to sell stocks

in order to pay for your taxes.

So you need to consider,

as you're making investments,

what you're going to be paying in taxes on those investments

and setting aside a certain amount of money just for taxes,

unless you have enough of a cushion

to pay for those taxes in your cash account.

So let's just go over one example here of gross versus net,

and what you pay in taxes with stocks.

So, many people don't realize this,

but the longer you hold a stock,

so if you hold a stock for longer than one year,

you pay significantly less in taxes, okay?

So if a stock is held for one year or more,

it's taxed at the long-term capital gains tax rate.

However, if you sell a stock within one year of owning it,

even at day 364,

you're gonna have that be taxed as ordinary income.

So basically, you pay the same amount

as you pay on whatever your income is from your job.

So whatever you're paying on the federal level

and the state level,

you're gonna pay that same amount in taxes, okay,

on that income from your investment

if you did not hold that stock for more than one year.

So that is one way that you can

make sure you're paying less in taxes,

is when you're making investments,

make long-term investments,

so that way you're falling into the

long-term capital gains rate,

which is significantly less than short-term.

So always consider your post tax return on an investment.

It's an amateur mistake to go out there talking in terms of

gross and not factoring in what you're gonna pay

in taxes on that investment.

You always want to think about the investment term.

So when you're making an investment in a stock,

understand that if you're holding it

for a short duration of time,

it's going to be taxed as ordinary income,

versus that long term capital gains tax rate.

I'm going to do a whole other video at some point

talking about investment taxes,

but I just wanted to scrape the surface with this here

talking about your gross versus your net.

Number two is a big one as well, guys.

This is understanding the value of something

versus the cost of something or the price of something.

So there's a big difference between

what the value is of something

and what the cost or the price is of that thing.

Price and value are two different things,

but unfortunately, people do not separate them.

They look at it as the same thing.

Price is not determined by the value of something, okay?

The price of something is determined by the market supply

and the market demand.

So the price of a stock

is not determined by the value of it.

The price of a stock is determined by

the supply and the demand of that stock.

The price of any item out there is determined by

the supply and the demand.

So when there's high demand for something,

it inflates the price of something.

And when there's low demand,

it deflates the price of something.

So whenever you're looking at price,

look at price as basically the supply versus the demand.

So if there's a high price for something,

there's a high demand for it.

If there's a low price for something, there's a low demand.

However, the underlying value never changed, okay?

Value is the estimated monetary worth of something.

So what I want you guys to do,

no matter what it is you're buying,

it could be a stock, it could be anything out there.

Buy based on value, not based on price.

And if the price exceeds the value,

do not buy it.

Now, another way you could look at this

is how valuable something is to your life,

and whether or not buying it will offer you more value.

And my favorite example of this is transportation.

So let's say you're someone who wants a luxury vehicle,

versus somebody who buys an economy vehicle.

Let's say there's a $20,000 price difference

between these two cars.

Both people, if they need to go somewhere,

they'll be able to get there in the same amount of time,

they're gonna travel on the same roads,

and they're going to arrive at the same time.

Maybe one person had leather seats and a sunroof,

and one person had cloth seats.

But did buying that luxury vehicle add value?

It really didn't, because you're still

gonna be able to get there

at the same time as someone else.

You could drive a Lamborghini,

and you could drive an old rusty car,

and odds are you're gonna get,

as long as you're not speeding,

you can pretty much transport yourself from Location A

to Location B in the same amount of time.

So no value was really added by buying that luxury vehicle.

So that's another thing I recommend,

is anytime you're buying something,

consider the actual value of that.

And if it's just a luxury item,

you probably don't need all those extra amenities,

because they're not actually adding any value.

Now, if you're someone who likes luxury

and that's something you wanna do, you know what,

go for it.

If it makes you happy,

you have to consider your happiness as well.

But if you're just looking at something in terms of value,

understand that in most cases,

luxury does not add value to something.

Number three, pay attention to expenses.

So this is my example here talking about investing expenses.

Many people are out of touch

with the true expenses that they're paying

on their investments.

Most investors do not understand the true cost

of their investments,

and they only look at the expense ratio

as what they're paying.

So when you invest in a mutual fund, for example,

you'll see listed on there your expense ratio in terms of

a percentage, and most people think that

is the only expense they are paying.

They are dead wrong, because there are numerous other

expenses associated with investments,

especially things like mutual funds.

I'm gonna give you three common examples,

and there are many more examples.

Number one is transaction costs.

So if you're in an actively managed investment

and they are trading in and out of stocks

and changing around the diversification and rebalancing,

every time they do that,

you're paying transaction costs to that stockbroker.

It's the same as trading stocks in your trading account,

where you pay commission when you buy a stock

and when you sell a stock.

So you're paying transaction costs

in actively managed funds.

Number two is taxation.

When you invest in something

that is not being actively traded, when you sell,

it'll fall under that long term capital gains

at a much lower tax rate.

So something else to consider

is what rate you're being taxed at

when they're changing things around in that investment.

Number three is a big one too, this is cash drag.

What I mean by this is if you invest in a mutual fund,

they're gonna hold a certain amount

of money in cash for two reasons.

Number one, if they see a good buying opportunity,

they will use that money to buy in,

and number two, if there is a lot of people who are

redeeming or cashing out,

they need liquidity in order to be able to pay them off.

So you're gonna have a significant amount of cash drag

associated with any kind of mutual fund

or actively managed investment.

So that's just three examples of other expenses

associated with most investments

that people have no idea even exist.

So you wanna understand that the expenses associated with

any investment go far above and beyond that expense ratio.

And I recommend, for most people,

avoid actively managed funds, avoid mutual funds,

stick to Vanguard index funds.

They don't actively trade,

you basically set it and forget it, and any taxes you pay,

as long as you have that fund for longer than one year,

you're gonna pay a long term capital gains tax

instead of that short term tax at ordinary income.

And you're not, they're not going to be actively traded,

racking up trading costs.

There's no cash drag either,

because you're basically allocating your own cash

into that fund instead of giving your cash

to someone else to allocate.

Number four is follow the strategies of money.

So basically, follow the existing strategies

that are out there.

So, many old strategies of accumulating wealth

still work today.

But for whatever reason,

a lot of people out there want to pave their own path.

And I'm not saying it's a bad idea.

I'm gonna explain why that is here.

But if you're looking to get to your destination,

which is financial freedom,

in the shortest amount of time possible,

or get there the fastest way possible,

you're gonna need a map.

It's the same thing as going across the country.

If you wanted to drive from New York to California,

get a map, and that will get you there in the shortest

amount of time possible.

I'm sure you could get in your car and just start driving,

okay, you'll probably get to California eventually,

but it's gonna take you a lot more time.

Yes, while you're driving all over the country,

you're gonna see a lot more,

you're gonna experience a lot more,

and you're gonna learn a lot more,

but it's gonna take you a lot more time

to get to where you need to go.

That's the way I view strategies of following money.

You could make your own strategy,

it's gonna take you longer to get there,

but you are gonna learn and experience a lot more.

But if you're just looking to get there

in the shortest amount of time possible,

follow the map that a successful person left behind.

So, really, this comes down to whether you're looking to

learn more or if you're just looking to

make money in the fastest way possible.

For most of us, I think we fall under the category of

following a map.

That is why I highly recommend following the existing map

of a successful person.

And the other thing I wanna say about this as well,

decide what your money-making strategy is and stick to it.

Do not dabble in different areas, okay?

If you wanna be a real estate investor,

be a real estate investor.

If you wanna be a dividend stock investor,

invest in dividend stocks.

Whatever it is that you wanna do, stick to that strategy,

learn as much as you can about that strategy,

and don't worry about what anyone else is doing.

Because if you dabble in different areas

and you don't have any expertise in that area,

you're going to be falling under this category

of going somewhere without a map,

it's gonna take you a lot longer to get to that

final destination of being financially stable,

and you know, at the point where you don't even need to

worry about money.

So the fifth rule of money is a very important one,

and that is always keep some cash.

So every financially stable individual out there

has a rainy day fund,

and this could be for a number of purposes.

It could be money parked for an investment opportunity,

so let's say they've been watching a certain stock

for it to go down to a certain price,

and then when they see that price,

they wanna buy in.

Or maybe it is money parked for any unforeseen expenses.

So maybe you drive an older car or you own a home,

and there may be a repair that comes along,

and you wanna have money set aside

to be able to pay for that repair.

You don't wanna be in a situation where

you need money and you don't have it.

This is a very bad scenario,

and I've been in this situation before,

because I did exactly what I'm gonna talk about here.

Being too heavily invested in the market.

About a year ago,

I was too heavily invested in the stock market.

I would keep $1,000 as a cushion in my checking account,

and anything beyond $1,000 I invested, okay?

I was driving an older car at the time,

and all of a sudden,

it was like one thing after another with that car.

It just started breaking,

and I had to start spending money on costly repairs.

Well, I dried up my $1,000 cushion after

about two repairs on that car,

and I ended up having to spend $2,000 fixing my car.

So I had to either put $1,000 on my credit card,

that I would have to pay off

and hopefully not pay interest on,

or my only other option would have been to sell stocks.

The problem is, when you put yourself in this scenario,

the market is in control of you,

because you need money and you don't have it.

So what this means is you need to sell your investments,

no matter what the value is.

You could be up 50%, you could be down 50%.

If you need money, you need money,

and it does not matter where the market is right now.

And the best, I think, strategy for this

is to hold a six-month cash reserve, if you can,

which would cover all of your expenses

for six months if need be.

I would recommend having a six-month cash reserve

before you even consider investing,

just because of this exact situation right here.

If you don't do this, you may end up in a bad situation

where the market is in control of you.

Number six is buy what is on sale no matter what.

This could be a stock, this could be laundry detergent.

So for example, when you go to the store and you buy

laundry detergent on sale, basically,

you're getting it for a lower price than

the actual value of that detergent,

so you're actually spending less money

for the same amount of product.

Number two, let's say you're buying stocks on sale.

You're actually increasing the potential profit margin,

because you're buying stocks when they go on sale.

If you understand the value of a company

and the current price for ownership is less than the value,

like we talked earlier about price versus value,

if price is below value,

you can make a profit when the price normalizes,

when that price comes back to normal,

when the demand increases for that product or that stock.

So the problem is that most people

are afraid to buy stocks when they're on sale,

because that's when the price goes down

and that's when there's a lot of

pessimism surrounding that stock.

But that's actually the exact point when you want to buy,

because that stock is now on sale.

So you want to buy whatever it is

that you're buying on sale,

whether it's a product you're consuming

or whether it's an investment, buy it on sale.

I don't care if it's a house,

I don't care if it's a stock,

whatever you're going to invest in,

buy it when it's on sale.

Do not buy it when the value exceeds,

do not buy it when the price exceeds

the current value of that investment.

Number seven, this is a good one too,

and it's very important.

Do not be afraid to lose it.

Don't be afraid to lose money.

So there's no such thing as a free lesson out there.

A lot of people, when they lose money doing something,

they think it's the end of the world.

It's actually a scientific fact

that a loss is two times more painful than a win is joyful.

So the experience you get when you're right, well,

when you're wrong, it's two times more of an experience

in the opposite direction,

so it's two times more painful than a win is.

So we are programmed to be basically avoiding loss

at all costs.

But a lot of people have this idea that, okay,

they have no problem going to school, alright,

they have no problem going to college and

paying tens of thousands of dollars to get an education,

but if they went out and started their own business,

and then it failed and they lost money,

they would be like, "Oh my gosh, I lost a ton of money,"

when they basically learned a lot in the process,

and pretty much learned some of the same things

you'd learn in school.

In my opinion, it's very stupid

to go to school for entrepreneurship.

You should just go start a business, and if it fails,

you're gonna learn a hell of a lot more

than you will in school,

and you'll probably spend the same amount of money.

So don't ever be afraid to lose money,

because every time you lose money, you learn something.

And if you are someone who's afraid to lose money,

you are missing out on valuable lessons in life.

Some of the biggest lessons I've ever learned

were from losing money.

They're very painful lessons,

but they are lessons you never forget.

People do irrational things to avoid loss.

That is largely because of the psychology

that a loss is two times more painful than a win is

when we're actually happy, when we're right.

So saving money in the bank is a guaranteed

way to lose money.

This is what a lot of people do because

they're afraid to invest.

A lot of people got burned in the stock market crash

of 2008 and 2009.

As a result, they're afraid to invest,

so they stick their money in a bank account

when they're earning 0.05% return on their account,

and inflation averages about 2%.

So they're losing money every single year because

their interest rate is not keeping up with inflation.

So your fear of losing money,

causing you to stuff it in a bank account,

is actually losing you money.

So you need to get over this fear of loss,

understand that loss is a healthy process,

you're gonna learn when you lose,

and if you're afraid to lose,

you're gonna be one of the biggest losers.

Number eight, never waste it.

Never waste your money.

This ties in a lot with what we were talking about earlier,

of value versus price,

how buying something that's a luxury item

largely does not add any value,

but you do not wanna waste your money

on unnecessary luxuries.

You want to direct your money towards the goal

of financial freedom.

So anytime you're buying some kind of luxury product

or something you know you don't need,

think of it as adding a couple of days, okay,

to your actual goal of financial freedom.

You've basically just extended the amount of time

you're gonna have to work or do whatever it is that

you're doing to reach the point where

you're gonna be able to do whatever you want with your life.

If you're buying a lot of luxury items and

you're buying a lot of stuff,

you're just prolonging the amount of time

until you get to your goal.

So here's just a few common examples of

ways people waste money on luxuries.

Number one, first class travel.

You're gonna get to the same damn place

whether you're sitting in the economy section

or the first class section of the plane.

Why are you wasting a ton of money to sit

in the first class section of the plane?

Number two, prepared food.

People spend so much money because

they don't wanna cook at home,

so they'll pay two or three times what they would pay

for the actual food and ingredients,

to go eat at a restaurant or go eat at a fast food place.

Number three is impulse buys.

When you buy something on impulse that you didn't plan out,

if you didn't plan on buying it, don't buy it, okay?

If you thought it through and you found the best price,

then maybe that's something you buy.

Especially if it goes on sale,

because you're watching prices.

But, do not make impulse purchases out of nowhere.

Now, the thing is, if you're following

one of my previous rules here,

you already are thinking in terms of price versus value,

so hopefully this is not something you would do,

but understand that comfort and convenience

are very expensive,

and this will ultimately just prolong the journey

of getting to financial freedom.

Number nine, my final rule of money,

is one that really pisses a lot of people off.

And it's just because of the way that they think about it,

it's about their mindset towards it.

This is the fact that money follows money.

The truth is, life is not fair, guys,

and wealthy people have an unfair advantage

because they already have money,

and they're able to put their money to work.

If you have no money,

your only option is to put yourself to work

and then earn money,

and when you have enough money,

then you can put it to work.

But people who are already wealthy are able to

let their money work for them, okay?

They put their money to work,

and the majority of their assets are invested.

Meanwhile, in the middle class,

the majority of our money is either in our savings account

or tied up in our house, okay?

So wealthy people have an unfair advantage

because they put their money to work.

You shouldn't look at this as a way to just say,

"Oh, this isn't fair, the system is rigged,"

look at this as a way to say, "Wow, I can do that.

"I can become wealthy, learn how to be smart with my money,

"and get rich."

And the good thing is, once you get rich,

the rich tend to get richer, okay?

So that's my last little piece there,

and hopefully that motivates you

to become one of the people who lets money work for you

and become one of the rich people who get richer with time,

because you're allowed, well, basically at that point,

you can put your money to work for you.

Anyways, guys, that's pretty much all I got for this video.

This is the rules of money that I think

are the most important if you're looking to make more money

and keep more of your hard-earned money.

If you guys enjoyed this video, please drop a like,

and if you are new to my channel,

please consider subscribing to be notified

of any future uploads.

And as always, I thank you guys for watching this video.

#Best Education Page #Online Earning

online earning,make money online, earn money online, online earning, online earning sites,

 make money online free, online money income, earn money online free, money online, best way to earn money online, online income site, money earning websites, best online earning sites, easiest way to earn money online, earn money payment bkash, online money income site