George Kamel - This One Number Determines If You'll Be Wealthy

Starting point is 00:00:05 In the world of personal finance, there's really one number that determines if you'll be wealthy. And it's probably not what you think. It's your sleep number. No, I'm kidding. It's not that. But in today's video, I'll tell you what the number really is so you know exactly what to focus on to build lasting wealth. But before we jump in, go ahead and hit those like and subscribe buttons so I can get my subscriber count to be at least higher than my sleep number, which is 500,000. Your boy likes it firm. I don't sleep like a rock. I sleep on a rock.

Starting point is 00:00:33 Stronger than I think. And yet, still weak. This is kind of a muscle, right? Right here? I guess so. Okay, so what is the one number that determines if you'll be wealthy? Some people might think it's your credit score, but there's not a direct correlation between a high credit score and high net worth.

Starting point is 00:00:48 I could hand you a million dollars right now, and it would not impact your credit score one bit. Could you try? So that's not it. You might think I'm going to tell you it's your net worth. After all, that is the most accurate measure of wealth, but that's just where you're at right now. It doesn't tell you where you're going.

Starting point is 00:01:03 So that's not it either. If you've been watching this channel for a while, you know I'm no fan of debt. So you might assume the one number that determines if you'll be wealthy is your debt level. If you're in a whole bunch of debt, you're probably not going to be wealthy. But here's the thing. Debt definitely robs you of your ability to build wealth, but most people can get out of debt within about two years if they follow the plan that I teach on this channel. So that's not it either. Okay, what about income? That's definitely a factor. After all, your income is your greatest wealth-building tool. But that's not it either because a high-income doesn't guarantee you'll be wealthy in the long run.

Starting point is 00:01:35 You've still got to be doing the right things with your money. And we know even high earners can end up broke. In fact, nearly half of U.S. consumers earning $100,000 or more are still living paycheck to paycheck. So if it's not your credit score, your net worth, your debt levels, or your income, what is this magic number that determines if you'll be wealthy? Your IQ, your enneagram, your blood alcohol content? Definitely not that one. The answer is your financial margin,

Starting point is 00:02:00 aka the amount of money between your income and your expenses. You got to mind the gap. where the wealth is. Financial margin is breathing room in your bank account and in your life. It's your cash cushion, your pocket space, your budget buffer, or as I like to call it, your prosperity pad, which coincidentally is what Joel Osteen calls his house. Joel, if you're watching no hard feelings, and if you are watching, why? Why? Why? But listen, this is about way more than just building wealth. Financial margin is knowing your card's not going to get declined at the grocery store. It's knowing you can cover the car repair without going into debt for it. It's seeing a financial need

Starting point is 00:02:35 among your friends and family, and instead of just offering thoughts and prayers, you're also able to drop an envelope of cash at their door. It's moving beyond just living paycheck to paycheck, because when you've got margin, you're not just getting by anymore, you're getting ahead. And it really is the single greatest indicator for wealth-building potential. Let me show you what I mean. Let's say there are two guys. We'll call them Guy Number One and Steve. Both are 30 years old and they're just getting started investing for retirement. They're starting from scratch. Guy number one has a sweet job at a tech company where he makes $100,000 and somehow manages to conceal the fact that he has no idea what he's doing by continually suggesting to circle back.

Starting point is 00:03:12 What's going on there? He's got a lot of money coming in, but he's also saddled with debt and a pretty fancy lifestyle. So a hefty portion of his paycheck goes towards student loans, credit card bills, and his cyber truck payment. Guy number one is also a bit careless with his spending and has a costly pension for lobster tail. So even though he has a high income, he doesn't really have much to work with here. And he feels like he's living paycheck to paycheck. And because he doesn't have much margin, he's only able to invest 3% of his six-figure salary into his retirement account. So let's head to the Ramsey Investment Calculator to see how this plays out if he keeps this lifestyle up.

Starting point is 00:03:44 So his current age is 30. And let's say he's going to retire at 65. And he starts with $0 in retirement. And he contributes $3,000 a year, which is $250 a month, 3% of 100 grand. So we're going to do $250 here for the monthly contribution. Annual return. let's say 10%. That's what we're seeing in the S&P 500 over the last 30 years, and I'm being generous here because it's more like 11 or 12. So at a 10% return, we're going to calculate this, $949,000 in retirement.

Starting point is 00:04:16 So even after 35 years, making six figures, he has less than a million dollars in retirement. Not looking good for guy number one. But now let's look at Steve. Steve works in the HR department for a rainforest-themed restaurant chain that shall remain unnamed for legal purposes, and he makes 60,000. $1,000 a year, which is 40% less than guy number one. But Steve has an advantage here. He has no consumer debt, and he lives on less than he makes, which means Steve has margin. So he's able to invest 15% of his gross income into his retirement. Now let's see how things pan out for our boy Steve. He's currently age 30. He's going to retire at 65. He also starts from zero, but he invest 15% of 60,000, which is nine grand a year, divided by 12, that's 750 bucks a month. So let's see what that comes out to with that same 10% return, $2.85 million. So get this. Even though he was making 40% less than TechBro,

Starting point is 00:05:10 he has three times the wealth of TechBrow. So you can see how your financial margin has a huge impact on your ability to build wealth, even more so than your income. And a lot of high-income earners are broke because they don't understand this concept. So if you want to be wealthy, focus on creating as much financial margin as you can so you can put that money to work. But how do you create more margin? Well, to help me explain, let's take a little. look at these three levers. One lever is your income. One is your expenses. And the other lever opens the trap door leading to a pool of sharks with laser beams. For the sake of simplicity, let's go ahead and get rid of that one. So we have two levers that affect your finances,

Starting point is 00:05:44 income and expenses. And if you want to get more financial margin, you can crank the income lever up or you can crank the expenses lever down. It's that simple. Margin is created when you spend less and when you make more. And if you can do both at the same time, even better. Now, I know that's easier said than done. Things are expensive and you can't just snobes. And you can't just snap your fingers and get a pay raise. So I want to give you some practical ways you can do this. First, let's take a look at some things you can do to cut back on spending. Let's start with food, because this is the expense we have the most control over. You can save some serious money on food and groceries by meal planning, packing your lunch, and buying generic instead of name brand.

Starting point is 00:06:19 Although I'd stay away from memories of butter. We're trying to find margin, not margarine. Big difference. It's going to get confusing later. And speaking of food, here's another big one. Stop eating out. Stop it. I know it's more convenient, but staying broke is a lot less convenient. And here's the stats. Restaurants have a markup of 300% on average to cover all of their costs. And these delivery apps, they mark up the restaurants markup even more.

Starting point is 00:06:43 So you're getting even more screwed when you use those apps. And I dare you. Go add up how much you've spent on restaurants and food delivery in the last 30 days. If Larry at the Bojangles Drive-Thru knows your favorite season of Gilmore Girls, you have a problem. And if your favorite season is seven, get out of here. Leave my unsubscribe if your favorite season of you. the seven. You had so many to choose from. If you said one, two, three, four, five, I get it. Seven? Get a clue.

Starting point is 00:07:05 Boy, with the poodles already. Moving on. Another area you can easily cut down on is insurance premiums. It's a good idea to reshop with an independent broker once a year to make sure you're getting the best coverage at the best price. That can free up a whole lot of money. And if you want to learn more about that, I've got a free coverage checkup tool you can use in the description below. You could also cancel subscriptions and memberships that you're not using. And be honest with yourself here. All right, if you haven't set foot in that purple and yellow, judgment-free zone in over a year, it's probably not going to happen anytime

Starting point is 00:07:33 soon. I'm going to judge you for continuing to pay for that. And side note here, this channel is a free judgment zone. I'm free to judge any time I want, like the opposite of a planet fitness. You have such a way with words. And while we're talking about ways to save money, let's circle back to where you've been saving your money. If you're saving up cash for a used cyber truck from tech pro or building up your fully funded emergency fund, that money may as well be earning more money for you. And for that, I recommend a high, yield savings account like the one offered by Laurel Road, one of the sponsors of today's video. Right now, your account balance earns top tier APY. And that's something you're not going to get from

Starting point is 00:08:08 most regular old savings accounts. Plus, there's no minimum balance required to open an account, your deposits are FDIC insured, and there's no hidden fees. Learn more by going to Laurelroad.com slash George or click the link in the description. And before we hit more ways to find margin, let's talk about a way to keep spammers and scammers from finding your personal info on these shady people search websites. And that's by using DeleteMe, another sponsor of today's video. Delete Me finds and removes your info from hundreds of data broker sites, and they send you a report showing you exactly where they found and removed your data,

Starting point is 00:08:38 and how much time they've saved you. And right now, they've saved me 77 hours of time it would have taken to do that myself, which is more time I can spend hanging out with my buddies, guy number one, and Steve. So help protect yourself from the risks of online scams and data breaches with DeleteMe. Right now, as a George Camel fan, you'll get 20% off by going to join Deleteme.com slash George. Or use the link in the description below. Okay, now that we've gone over some ways to spend less, let's talk about some ways you can create more margin by making some extra cash. If you've got a driver's license and a reliable car, you can deliver food, groceries, packages, and even people in exchange for money.

Starting point is 00:09:11 I'm talking about Uber, okay? You ever heard of it? Get another clue. Why is he so angry? And I've actually done a lot of these side hustles. And trust me, people will pay a pretty penny for you to drive them to a Kenny G concert or bring them a big cheese at CrunchRap Supreme at 1am. So use delivery apps to make money instead of using them to spend money. apps like Amazon Flex, Uber, Lyft, Uber Eats, StoreDash, Grubhub, Shipped, Instacart, or whatever's popular by the time you see this video. And one good thing about doing this is you typically get to choose when you work and how much you work. So it makes a great side hustle outside of your full-time job. And you can make anywhere from $15 to $30 or more depending on your location and peak hours.

Starting point is 00:09:48 Another way to make some extra dough is by doing freelancing or consulting. If you've got skills in graphic design, writing and editing, coding and IT, marketing and SEO, photography, virtual assisting, bookkeeping, pretty much anything. You can make some really good money doing this for other people on the side. Some other ideas for getting your income up? Tutoring, cleaning houses, babysitting, pet sitting, dog walking, and even car detailing. These are great options that most people would be able to do without having to learn a ton of new skills or spend a bunch of money.

Starting point is 00:10:15 You'll notice a theme here. A lot of these involve cleaning up other people's crap, sometimes literally. Dirty jobs. Hit me up. Mike Rowe. Can't script that kind of bull crap, brother. Bottom line here, the greatest indicator you'll be wealthy is not your credit score, your debt levels, or even your income. It's the margin you create. And there's plenty of things you can do to get that number up. I've shared a few with you today, but if you want even more, I created a free PDF to give you tons of ideas to spend less and make more. If you want to go download it, it's completely free. Just use the link in the description below.

Starting point is 00:10:46 You're welcome. No one says thank you anymore. And if you want to know that you're on track to build wealth, keep watching this next video to see how much you should have in your 401k by age, or, you're welcome. click the link in the description to check it out. Thanks for watching. We'll see you next time.

George Kamel - This One Number Determines If You'll Be Wealthy

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