Summary
- I believe retirement isn't about age; it's about having passive income that covers your lifestyle, allowing you to work on what you enjoy.
- My goal is Financial Freedom to spend time with my family and work on passion projects without the stress of making money.
- There are five levels of wealth: Financial Security, Financial Vitality, Financial Independence, Financial Freedom, and Absolute Financial Freedom.
- Financial Security means having enough passive income for basic needs like rent, food, utilities, and transportation.
- Financial Vitality adds a bit more comfort, like occasional new clothes, dining out, and small luxuries.
- Financial Independence aims to maintain your current lifestyle without needing to work.
- Financial Freedom allows for more enjoyment, like travel, helping family, and luxury expenses.
- Absolute Financial Freedom means funding an extravagant lifestyle without financial worries.
- Use the 4% rule: if your investments yield 10% annually, you can safely withdraw 4% each year without running out of money.
- Calculate your needed net worth by dividing your annual passive income requirement by 4%.
- Focus on achieving each level of wealth one step at a time, starting with Financial Security.
- Knowing your Effective Hourly Rate (EHR) helps you prioritize high-value tasks and delegate low-value ones.
- Invest wisely: my portfolio includes cash, real estate, stocks (both ETFs and individual stocks), crypto, and private investments.
- Save strategically: avoid unnecessary frugality and enjoy the things you love while cutting costs on things you don't.
- A positive money mindset, believing in abundance and investing in self-growth and tools, leads to easier wealth accumulation.
- Recently, I've achieved Financial Freedom, allowing me to work on projects I love, like creating helpful videos.
Video
How To Take Action
I would suggest implementing a few low-cost, high-value steps to get started.
First, understand your current financial situation. Use a free app like Money to track your spending and calculate how much you need for Financial Security. This means figuring out the absolute minimum you need each month to cover basics like rent, food, and utilities.
Next, figure out your Effective Hourly Rate (EHR). This is how much money you make divided by how many hours you work. It helps you see which tasks are worth your time and which ones can be delegated or outsourced. For example, if your EHR is $50 an hour, consider hiring someone for tasks you can outsource for less than this amount. This frees up your time for more valuable activities.
A good way of doing this is to focus on increasing your income. If you're an entrepreneur, find ways to grow your business. If you work for someone else, seek side gigs or ask for raises. Prioritize tasks that get you higher returns and avoid low-value activities.
Investing is crucial. Start small, aiming for a balanced portfolio. Invest in diversified assets like real estate, stocks, and low-risk options. Even small investments can grow over time thanks to compound interest.
Finally, adopt a positive money mindset. Spend on things that bring you joy and cut out expenses that don’t matter to you. This balance helps you stay motivated without feeling deprived.
These steps are easy to start and don’t require much money or time, setting you on the path to Financial Security and eventually Financial Freedom.
Quotes by Wiki Wayne
"I'm going to show you the fastest way to get to Financial Freedom"
– Wiki Wayne
"Financial Freedom gives you the freedom to work on projects that give you purpose and joy"
– Wiki Wayne
"Your kids are only little for a flicker of time years go by like months"
– Wiki Wayne
"The biggest fear in the world is no longer your concern"
– Wiki Wayne
"Enjoy your freaking latte with whip cream"
– Wiki Wayne
Full Transcript
in this video I'm going to show you the fastest way to get to Financial Freedom to retirement but I'm not talking about the definition of retirement that the government schools or Society wants you to believe I'm talking about something entirely different the conventional brainwash definition of retirement is when you leave your career permanently to stop working forever usually because you're old that sounds sad because it is sad Society wants you working up until the moment that you're not useful anymore and at that point you can take whatever money you manage to save up until that point and quote enjoy it that is if you even have the energy to enjoy it at 65 years old here's the definition of retirement that they don't want you knowing about it's when the passive automatic income from your Investments pays for your lifestyle at your desired lifestyle level will break down the levels of wealth soon allowing you to work on whatever you want regardless of your age by this definition you could retire at 30 if you follow the plan I'm going to show you now before we get started let me explain the burning motivation I had for making this video I'm a father of two beautiful children when you become a father all of a sudden time becomes ridiculously precious your kids are only little for a flicker of time years go by like months now I'll be straight with you I don't think I'll ever stop working I like building things but like everyone I would love to know in my bones that I don't need to work just for the money Financial Freedom gives you the freedom to work on projects that give you purpose and joy and most importantly on your own schedule so you can prioritize the things that are important to you thus I set off on a journey to learn as much as I could about personal finance and Building Wealth with the goal of getting to Financial Freedom as soon as possible in this video I'll teach you everything I learned and by the end of the video I'll let you know how well it worked you're going to learn the five levels of wealth and how to personally calculate them for your own unique goals and situation the 4% rule a personal finance must no concept how to figure out your exact number that would enable you to say you I'm done your effective hourly rate the most important metric you can track if you're trying to break out of the Matrix my personal investment strategy and what I do with my money and much more where did I learn all this from well first a lot of financial books 15 to be precise also fiduciary advisors these are financial advisers that are actually legally bound to give you the financial advice that's best for you a financial planner on the other hand will commonly tell you to invest in things that make them the most money like high fee mutual funds next an ungodly amount of financial YouTube videos big fan of Andre J and Graham stefen and lastly podcasts like my first million invest like a boss and MoneyWise but real quick I wanted to let you know that my SEO agency the search initiative has a $1,000 off discount going on to the end of the month to get a free audit head on over to the search initiative.com and put your details into the form and we'll let you know what we can do for you now back to the video okay let's start with the question what is your number you know what's the amount of money that you need to say enough is enough I'm doing what I want now this is also eloquently known as you money I hear a lot of people throw out $10 million because that's the number that the interwebs agrees upon as rich not only is that number arbitrary just completely random but that is so much freaking money you'd have a very hard time spend spending the passive income that can kick off unless you're Conor McGregor there's actually multiple levels of wealth that are personal for each and every individual starting with Financial Security to financial Vitality Financial Independence Financial Freedom and absolute Financial Freedom someone who lives in Thailand where I live will have a completely different set of numbers compared to someone who lives in LA or Dubai here's how to calculate your personal levels of wealth using a free app called money which you can find on your app store the first level of wealth is called Financial Security and it's considered the Rock Bottom needed to sustain your survival forever do you know what's the biggest fear for human beings is dying no but very close it's running out of money before you die rightfully so people are terrified about living their money using the app start to fill out what is the Rock Bottom amount of income you need to take care of your mortgage or rent food utilities transportation and insurance for purposes of illustration I'm going to be filling this out for a fictitional guy named Robert changai who lives in changmai Thailand this is cutting close but you can find a condo for about $300 per month get by on $175 in food per month pay about $80 in utilities for things like a cell phone and electricity and then $50 per month to get around town Insurance isn't really required in Thailand this comes out to $65 per month or $726 per year that you need from your passive income from investments in order to survive that's Financial Security with financial Vitality you're making life a little bit sweeter and more comfortable you're enjoying yourself instead of just surviving so let's say $75 every two months on clothes $100 on eating out and entertainment and $50 in small luxuries such as Legos or Funko Pops once we add all this stuff on top of Financial Security that brings us to a passive income requirement of $9,990 per year with financial Independence you're trying to live an equal lifestyle to what you currently do you're trying to live like you do now but forever without having to work so in the app you're going to type in your burn rate how much money you spend per month for Robert let's put in $5,000 which can represent a pretty good life in Thailand this comes out to $60,000 per year Financial Freedom the next level is the freedom you desire without having to work for the rest of your life using the app you can put in anything you want into these fields Robert wants to spend $200 per month on Art $1,000 on travel he wants to send 500 bucks per month back to help his mom retire sooner he wants a concierge doctor for $300 per month fancy and bro likes to party at $500 per month this brings the ual total to $90,000 per year now at the final level the final boss is absolute Financial Freedom whatever you want whenever you want with whomever you want as much as you want in Robert's richest life he wants to spend $20,000 per month on five-star luxury travel $3,000 per month fine dining on caviar and lobster and he wants to rent a Lambo for $5,000 per month bringing the total to $396,000 per year now you know how much passive income you need to achieve each level of wealth but what's the next step how do you to achieve it have you ever heard of the 4% rule the 4% rule says that if you draw 4% per year out of a balanced Investment Portfolio statistically and mathematically you never run out of money how can that be well the average return from the stock market is about 10% and you add to that the effect of compound interest and then subtract out the effect of inflation and recessions and then you end up with about 4% so from this we can calculate your annual safe withdrawal rate as your invested net worth times 4% so if you had a million in the Bank you could safely pull out $40,000 per year and you'd never run out of money that's $3,333 per month we can also work backwards if you wanted 7,000 per month passive you can multiply $7,000 by 12 months and divide by 4% and you'd find that you need $2.1 million to achieve that I think you can see where I'm going with this we already calculated your annual passive income requirements for your various levels of wealth now with a little mathemagic we divide those numbers by 4% to find out how much net worth you need for each of these stages there's quite a few takeaways to glean from this first of all to reach Financial Security to never starve to death and run out of money before you die it's not an unreachable amount of money with hard work in fact you might already be there and if you are you need to Pat yourself on the back and take yourself out to dinner to celebrate take that in the biggest fear in the world is no longer your concern that's a huge subconscious weight that you don't need to Bear if you're not at Financial Security yet then you're going to forget about all these other stages past it they don't exist yet Focus focus on the most achievable goal and be line towards it then once you hit Financial Security Financial Vitality is your next Target all the while celebrating along the way as you reach each Milestone as soon as you finish this video calculate your levels of wealth and then calculate how much money you need to achieve these levels print that bad boy out and slap it up on your wall on the journey to Financial Freedom this is your map and now that you know where you're going let's figure out how to get you there by the way here's a quick word from the sponsor of this video search intelligence this campaign got us big links in what we sites such as Life Hacker Wells Online daily record and about 20 other news websites let me show you how we've done it we knew that people will be flying a lot this summer and we knew that journalists will be writing about this topic a lot so on behalf of our client we put together a nice guide about how to fall asleep on the plane then we use mrack to find journalists who write about travel then we put our advice in an ice email and send the tips to the journalists within just a few days the links started Landing securing client natural placements in really big websites just like this this and this this is a great example about how you can leverage seasonal Trends to earn links to a website anticipate what journalists want to write about at all times and give them the stories that they need they will reward you with some great juicy links I hope this is helpful now back to the video accumulating wealth boils down to three things generating money through your career investing and making sure you save enough so your net worth grows I'm going to give you my best advice in all three of these categories let's start with making money now there's a billion different career paths that you can take on this channel I mostly teach entrepreneurship through the path of digital marketing now whether you're an entrepreneur or you work for someone else there's one key metric that you need to track if you want to reach Financial Freedom as soon as possible and that's your effective hourly rate your EHR which is how much money you make divided by how much you work let's say you do the math and you figure out that on average your time is worth $50 per hour let me just give you a small taste of what knowing this number can do for you first you get to know which activities make you the most money if your effective hourly rate is $50 but you found a job or side hustle that can get you $100 per hour you need to do more of that it boosts your average also if there's a tasks that you can Outsource for less than $50 per hour like data collection or mowing your lawn you need to hire someone to do that now because freeing up that time allows you to raise your average effective hourly rate by working on higher value activities you also see the price of wasting time yes you could drive to run that errand and save money but if driving takes an hour you actually just wasted $50 of your time or you could take a $20 Uber allowing you to read or plan the day or do a meeting on the Fly you can also set a goal to raise your EHR which essentially means you make money faster if your EHR is $50 now then by next year should be higher you also know what to charge for your Consulting fees at least $50 per hour and you have protection from shiny objects syndrome hm should I start trading crypto well look at how much you made from crypto and divide by how much much time you spent doing it all these benefits together mean that you're going to get to your levels of wealth faster you have your map by calculating your level of wealth requirements now you're making sure you're driving the fastest car possible to figure out your EHR takes a bit of tracking to properly calculate it for example you're not going to count the time you spent Doom scrolling or eating lunch as work time after you finish this video watch my full EHR explainer video called the millionaire trick no one knows about Link in the description next let's talk about investing you work you make money but when you invested it grows by itself without your effort and a properly balanced Investment Portfolio is eventually what you need to build in order to kick you back that 4% per year now everyone in their mama has a different investment Philosophy for some it's like their religion I'm not going to say that my investment strategy is what's right for you but if you want to take a look under my kimono here's how my portfolio is broken down about 177% of my net worth is just straight cash on hand ready to invest into the right opportunity or business that might come up or for rainy days about 20% is in single family home and Commercial Real Estate that kicks off passive income monthly 37% is in the stock market half of that uses Robo investing like wealthfront to automatically choose a mix of Market tracking ETFs both foreign and domestic the other half of the stock bucket is individually chosen equities 99.4% is in crypto and 16.7% is in alternative private off-market Investments such as funding entrepreneurs to buy a chain of laundr Mount businesses there's Angel Investments too like Surfer and Bloom but typically you don't count these towards net worth as they're more like lottery tickets if you want a full deep dive into my investment strategy check out my video called my seven figure Investment Portfolio after you finish here link also in the description next let's talk about saving because after all if you're blowing all the money you make on hookers and Coke then you're never going to get to Financial Freedom there's this concept A movement called Drop The Latte in the financial Independence retire early fire Community the idea is to save as much as possible so you can get to your number as fast as possible and retire as early as possible and the idea is that you shouldn't waste money on Starbucks Netflix eating out movies or literally anything that might put a smile on your face in my opinion this is hor for a few reasons first of all do you think that you work hardest when you're miserable if you're grinding 60 hours per week and not reaping any of the enjoyment from it eventually you're going to ask yourself what the hell is it all for in fact this is the exact same question I asked myself right before I quit my former career as an engineer if you don't enjoy the fruits of your labor you're going to stop laboring also you know those music montages movies where someone putting in hard work and they keep getting better and better and eventually they catch the chicken with their bare hands or do whatever it is that vanam was doing in Blood Sport these are legit the funnest parts of the movie when you're 65 years old you're going to look back on this hustle phase as one of the best times of your life where you made sacrifices perfected your craft and had a hell of a time along the way don't spoil those future Memories by living like a monk enjoy your freaking latte with whip cream also if your money story is that money is a scarce thing and it's hard to get guess what it will be hard to get that's that's because you're going to be afraid to invest in things that make you more money like educating yourself with courses and books going to conferences and making sure you're healthy or investing in the software or a key hire that's going to help increase your effective hourly rate but if your money story is that it's abundant and easy to get it's going to come easily another framework that I like to use when it comes to personal expenses is from remit sey spend extravagantly on things you love and cut mercilessly on things you don't if you love food then go nuts motivate yourself by giving yourself the best Foody life you can live and if you couldn't give a poop about clothes Go full Steve Jobs and wear the same thing every day earlier in the video I was going to let you know about how all these strategies worked out recently I was able to hit the point where my lifestyle is completely supported by my investment income allowing me to truly work just because I want to on projects that make me happy such as making videos for fine folks like yourself if you want more videos just like this one make sure to subscribe and we'll continue down this road together
