George Kamel - How To Be A Millionaire On A Low Salary

Starting point is 00:00:05 You know what you never hear people say? If I made any more money, it'd be a real problem. But I have heard someone say that. The late poet, Notorious B-I-G, Mo money, moe problems. But for a lot of you watching you're going, no, no, no, no, more money less problems. You're calling BS on B-I-G, which I think is B-A-N-A-N-A-S.

Starting point is 00:00:22 Oh, man, that's too many letters. So while some people think their low salary is what's keeping them from building wealth, I'm here to prove some people wrong. Because today, we're talking about how you can build wealth even on a low income, plus why a six-figure salary doesn't guarantee that you'll be problem-free or that you'll become a millionaire. So let's start by defining low-income.

Starting point is 00:00:40 According to the U.S. Census Bureau, in 2023, the bottom 25% of households made less than $44,000. And if you're in that group, financial progress probably feels impossible, much like me dunking a basketball. I thought it was impossible, too, until I realized you can just lower the hoop. Who's going to know? But believe it or not, regardless of hoop height, I'm going to prove to you that you still have a pretty good shot at building wealth. Take Ronald Reed, for example. Ronald's career consisted of serving in the military,

Starting point is 00:01:10 working as a gas station attendant for 25 years, and then part-time as a janitor for 17 years before retiring at 76. So he was definitely towards the bottom of income earners. But when he died at 92, people discovered he had grown his net worth to $8 million. So clearly, it's possible to do a whole lot while still earning less.

Starting point is 00:01:29 And in a second, we're gonna look at what makes that possible. But first, I don't wanna skip over the fact that being on a low income, is not easy. Especially as cost of living and inflation are on the rise, you have a much harder hill to climb than others with a higher income. But you, your family, and your future are worth learning how to climb it. And for starters, I want to emphasize that feeling broke can be an income problem. Sometimes. A lot of times, though, it's a behavior problem. Get this, the top 25% of households make over $100,000 a year, but almost half of them are still living

Starting point is 00:01:59 paycheck to paycheck. So what that tells me is that what you make isn't as important as living on than you make. And the math here is pretty simple. If you spend 100% of what you make, you have 0% left to save or invest. 0% to 44,000 is the same as 0% of 100,000. Both equal zero dollars. So whether you make a large income or a small income, the key to building wealth is financial margin, the gap between your income and your expenses, which is good news, because even if you make 50,000 a year, you can do a few smart things to retire a millionaire. The first thing, you've got to get on a budget. And I know it's not your favorite word, but here's the deal. A budget is permission to spend. It's just an intentional spending on paper before the month begins, or if you're like me, in an app.

Starting point is 00:02:41 And if you want to know what app I use, I'll drop a link in the description below, and you can get started for free. And if you want to have margin to save and invest, you need to know what's coming in and what's going out. It's like in 2007 when you printed out your MapQuest directions before a road trip. If you didn't know where you're headed, you're just burning gas for no reason. And if you're working with a lower income, that means adjusting your cost of living. Cut back on things like eating out. Don't sign up for every streaming, service that exists and definitely don't take that Viking River Cruise through your book club. Now, I'm not saying you can never do these things, but they need to be treats that you save up

Starting point is 00:03:11 for with cash, not habits in your life. Let me tell you, River Cruise? That's a treat. That's a real treat. Treat yourself. So to get to a million dollar future, you can't live like a millionaire today. Just look at our boy Ronnie R. He kept it simple, driving a used car, cutting his own firewood into his 90s, and saving a big chunk of his income instead of blowing it on luxuries. He wasn't flashy, he was consistent, and that's how he turned a janitor's paycheck into an $8 million legacy. Next, you need to avoid debt at all costs. On a lower income, debt burns what little margin you have faster than Cruella DeVille's Cigarillo. If you're forking over 400 bucks a month on student loans, credit cards, or car payments, that's $400 you can't put towards

Starting point is 00:03:52 saving, investing, or even breathing a little easier at the end of the month. And let's look at the interest you're paying for a second. If you're carrying a $5,000 credit card balance at 20% APR, you're handing over $1,000 a year just for the privilege of borrowing that money. That's like taking a pile of cash, setting it on fire and saying, wow, really enjoyed that warm glow. Well, that sounds bad when you say it like that. And when you already don't have much margin in your life, this is the dumbest thing you could do with your money.

Starting point is 00:04:18 Debt doesn't just slow you down. It puts you in reverse. So as soon as you get that garbage out of your life, the sooner you can start making progress on your future. Now, while I fully believe it's possible to build wealth even out of lower income, I'm not crazy. If at all possible, to increase your income. And that's because your income is your greatest wealth building tool.

Starting point is 00:04:36 And this could look like a couple of things. First, in the short term, you can take a couple of nights a week to pick up some gig work through apps like DoorDash, Uber, and Amazon Flex, where you deliver food, people, or packages. And if you're really a pro, deliver food to the people that ordered the packages, probably the same audience. Two birds, one stone. Or is it three birds. Either way, multitasking for the win. Especially if you're in debt. Do as much of this as you can to get rid of it as fast as possible. And if you really get after it, you'll save even more money because you'll be so busy making more

Starting point is 00:05:05 that you won't have time to spend it. Another win. This is literally a win-win. Next, figure out what it takes to get a promotion or raise at your current full-time job. If there's no path for growth in the foreseeable future, it might be time to get more education, acquire new skills, get another job,

Starting point is 00:05:20 or choose a different career path altogether. The point is, your low-income now doesn't determine your future. You're not stuck where you are. And while you can build wealth at any income, making more money will speed up the process. Now, once you're making more money, don't fall into the trap of growing your lifestyle to match that new income. That's called lifestyle creed. And that's how people making six figures end up broke.

Starting point is 00:05:41 You saw half of them still living paycheck to paycheck. It'd be like upgrading from a 2010 corolla to a brand new Tesla and then realizing you can't afford to even charge the dang thing. So don't let your stuff own you. You want to own it. Once you're debt free and you have margin, you're ready to build wealth. So here's the next step. Automate your investing.

Starting point is 00:05:58 The easiest way to do that is through your employer retirement plan if you have one. Now, ideally, once you're debt-free with the emergency fund, set your investment contributions to 15% of every single paycheck. This way, you don't even have to think about it. It's automatic and you just learn to live on what's left. Out of sight, out of mind in the best way possible. Kind of like when you realized you could disable Clippy for Microsoft Word, only to realize you miss his friendly condescension and his pension for accuracy.

Starting point is 00:06:23 RIP, homie. If you don't know who Clippy is, it's like chat GPT, but for old people. Oh, now I get it. And if your employer doesn't offer a retirement plan, you can always go to an IRA. This is a retirement plan outside of your employer and anyone with earned income can contribute to this.

Starting point is 00:06:39 Remember this. Once you have money in that IRA, you got to make sure it's not just sitting in cash. You want to invest this. And if you want the details on that, check out my free investing guide, which I will link in the description below. The key here is consistency.

Starting point is 00:06:52 This habit of investing regularly will help you build wealth over time. Think of it like planning a tree. Every contribution is a seed, and the earlier you planned, the more time it has to grow into something big and fruitful. By automating your investments, you're making sure that your future self will be taking care of, even if today's you is preoccupied with figuring out where you can stream Legends of the Hidden Temple. Paramount Plus saved you the hassle. You're welcome. And Icarly.

Starting point is 00:07:16 Or mostly go for the Icarly, stay for Legends the Hidden Temple. That should be Paramount Plus's tagline. Okay, so these are solid action steps for building wealth, even on a low income. the question, can you still really become a millionaire on this low income? Well, I'm going to crunch the numbers in just a second. But first, there's another action step that is critical for maximizing your money. If you still have your savings on a normal bank account earning a pathetically low interest rate, you're leaving money on the table. You need to keep your savings in a high-yield savings account like the one offered by Online Bank Laurel

Starting point is 00:07:49 Road, a sponsor of today's episode. They offer top-tier rates that help your money make more money, and their accounts are FDSC insured, and there's no minimum deposit or monthly fees. It's a better, smarter way to stash your emergency fund, sinking fund, or even a down payment on a house. And you can get started by going to laurel road.com slash George or click the link in the description. And while you're hustling to make a better future for you and your family, you don't have time to deal with all the scammers and spammers looking to steal your personal info and peace of mind. That's why you need to join Delete Me, another sponsor of today's video. They scour the internet for your personal data and give it a good wipe.

Starting point is 00:08:22 And it's not just once. They're doing this all year long in the background while you get to live your life. They do all the hard work for you, and they send you a detailed report of what they've done. And I've saved 66 hours already of having to wipe myself. I immediately regret saying that. Anyways, you can get 20% off by going to join deleteme.com slash George, or just click the link in the description. Okay, back to what it takes to get a million dollars, even on a low salary.

Starting point is 00:08:47 And to crunch the numbers here, I'm going to use the Ramsey Investment Calculator, which is totally free, and you can crunch your own numbers. I'll drop a link in the description below. So let's say you're 25 years old, and you're... plan to retire at age 62. You currently have nothing saved in retirement, and you're going to start contributing $166 a month, every single month from $25 to 62, and we're going to assume the annual average return to be 11%, which is what we've seen in the S&P 500 over the last several decades. Let's see what we come up with here, calculating over a million bucks by Quentin Time.

Starting point is 00:09:20 It's amazing. And guess what? That's less than 5% of that $44,000 income, and it assumes they never got a raise for their entire life from 25 to 62, they stay making exactly $44,000, which we can all agree would suck. Two thumbs down. And in reality, you're going to make more money over time, and you're going to invest 15% if you follow my advice, which is triple the savings rate, which would make you a multi-millionaire. Let me prove it to you. We're going to go from 5% to 15%, which is more like 500 bucks a month.

Starting point is 00:09:51 Same age range, same return, $3 million, multi-millionaire. And if you do the things we talked about, getting on a budget, ditching debt, working to increase your income, then there's no reason you can't invest at least $166 a month. Now, if you're starting later in life, you're going to need to invest more to hit that mark. And if you're starting much later, like age 50 or older, you're going to need to get more aggressive and make some serious sacrifices over the next decade to have a shot at a solid retirement. Otherwise, let's be real. You're going to be working until the bitter end, which is fine and dandy, but you should be working until the bitter end because you want to, not because you have to.

Starting point is 00:10:26 So let's recap. Building wealth doesn't mean you have to make six figures or that you need to invent a gadget that lands you on Shark Tank, shaking hands with Mr. Wonderful. The truth is that even small behavior changes like budgeting and investing made consistently can grow into something big over time. It's not about how much you make, it's about how much you keep, and more importantly, how much you invest. No matter where you're starting today, you've got what it takes. You've got the steps, you've got the tools. Now it's just about doing the boring work. And one of the best things you can do is to get a clear picture of where you're at financially and take the right steps to get to where you want to go.

Starting point is 00:10:58 How do you do that? Well, take my free Get Started assessment, and you'll get a clear plan for your situation. I'm going to drop a link to the description, go check it out, and let me know in the comments what the results were. And if you want even more evidence that hard work works, just take my story of going from broke to net worth millionaire

Starting point is 00:11:13 in under 10 years. Keep watching this next video to see how I did it, or click the link in the description. Hope you enjoyed this video, and if you did, be sure to hit the like and subscribe button and share it with your friend that still watches way too many old shark tank clips. Thanks for watching. We'll see you next time.

George Kamel - How To Be A Millionaire On A Low Salary

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