so why is it that some people always
seem to be running out of money they
never have enough money to pay their
bills yet we find other people seem to
have an endless supply of money in this
video here I'm going to be explaining
why rich people never seem to run out of
money like they have an endless supply
or some kind of money tree in their
backyard where they're just going out
and plucking down hundred-dollar bills
now let me just clear something up here
style rich person who's buying the
flashy cars and the fancy clothes I'm
talking about that old school style of
wealth the people who are kind of that
low-key rich how this type of person
never runs out of money now the first
thing that usually plays a big part in
this is something called generational
wealth I'm sure you guys have heard of
this before but this is simply money
that has been passed on from generation
to generation so just for an example I'm
sure that members of the DuPont family
don't have to work if they don't want to
they have enough money from their
grandfathers and great-grandfather's and
generations before them in order to live
and have their needs be paid for but we
have to stop for a second here and
realize that it is not simply just the
fact that they already have a lot of
money because we have seen before that
people who fall into a lot of money and
are given a lot of money often end up
giving that money right back so it is
not simply the fact that rich people
have a lot of money it is what they are
actually doing with that money instead
that separates them apart so let's go
ahead and talk about lottery winners for
a second it's no secret out there that a
lot of people who win the lottery end up
going bankrupt in fact lottery winners
are more likely to go bankrupt in the
next three to five years than the
average American people who win the
lottery who when millions of dollars are
more likely to go bankrupt in the next
three to five years than the average
American so it is not simply the fact
that you're handed a lot of money and
all of a sudden all of your financial
needs are met it is what you are
actually doing with that money that
makes sure you never run out of that
money going forward so we know that
lottery winners often go out there and
spend millions of dollars on cars and
houses and clothes and they give a lot
of money away or they end up with some
kind of substance problems that's kind
of a story we've heard in the past but
what these rich
people are doing these old-school rich
people that really understand what they
should be doing with their money what
they end up doing is they invest that
money and they essentially live off of
the earnings of their money now the most
simple example of this is dividends when
you invest money in a dividend paying
stock you end up earning those dividends
typically every single quarter and this
is a 100% passive method of investing
and earning income so essentially the
simplest way that you could never run
out of money is by investing in a
diversified collection of stocks that
pay you dividends and then living off of
those dividends and never touching a
penny of principle and this right here
is a concept that these true old-school
rich people really understand if they
can live off of the children of their
money they're never going to run out of
that initial pool of money so you're not
gonna see a rich person putting millions
of dollars into coca-cola or one
specific stock they're typically going
to be investing in a pool of different
stocks also known as an ETF so one
example of this is actually the Vanguard
high dividend yield ETF it invests in
companies like JP Morgan Chase
ExxonMobil Johnson & Johnson AT&T and
this ETF pays a three point one seven
percent dividend yield so what that
means is that for every $100 invested in
this high dividend yield ETF you're
going to earn 3 dollars and 17 cents per
year in dividends so let's say for
example you wanted to replace your
$100,000 per year salary with 100%
passive dividend income you would need
to have about 3.2 million dollars in
this ETF to give you about a hundred
thousand dollars of dividends per year
at that three point one seven percent
yield so if you wanted to live off of
your money never touch a penny of
principal and have a six-figure income
coming in from your dividends you're
gonna need about 3.2 million dollars but
the beauty of this is that you have 100%
preservation of principal here you're
living off of the dividends you're not
touching a penny of principal and you
could foreseeably live for the rest of
your life off of that three million
dollars but in general that is what
these people are doing that is how rich
people never run
money now are they actually out there
doing this themselves picking dividend
stocks and investing in ETFs they are
probably doing this but they're having
other people do it for them they have
financial advisors or teams of financial
advisors figuring out how to manage
their money what to do with their money
and how to earn a return and then
they're essentially living off of those
returns and reinvesting whatever they
have left because they understand that
by doing this they will never run out of
money but anyways guys that is why rich
people never seem to run out of money
they understand the concept of living
off of the children or the offspring of
the money that you already have and
never touching a penny of the principle
if you guys think this is an interesting
concept let me know down in the comments
section below
I'm sure this is where we would all like
to be at some point in time where we are
living off of something like dividend
income that is 100% passive but thank
you guys so much for watching this video
if you're new to my channel don't forget
to subscribe and I will see you in the
next video if you are interested in
learning more about investing in the
stock market I've created a free course
just for you the link is in the
description below here are a few other
videos you might enjoy as well
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