How to Become Rich | Retire on $10 a day

How to Become Rich | Retire on $10 a day


Is it possible in this day and age to become
a millionaire? Or perhaps the better question is why would
you want to become a millionaire? I mean in media today Millionaires and billionaires
for that matter are often not depicted in the best light. Characters like Scrooge McDuck or the always
supremely evil C. Montgomery Burns come to mind here. And of course right now in real life we have
the ever-present Donald Trump as one of the main poster boys of the super wealthy. So I suppose with that kind of media influence
hovering over us our entire lives it’s not surprising that most of us have a fairly negative
view of the super wealthy and many really do not want to become a part of it. Especially since the majority of us don’t
personally know anyone who’s Super Rich so we don’t have anything to really balance the
scales, and that’s all we can really draw upon is what we see in the media. And that’s really unfortunate because there’s
a lot of really great wealthy people out there. But most of them are not in the public eye
and even the ones that are in the public eye like Bill Gates don’t get as much media attention
as someone like donald Trump does. And as a result there are a lot of misconceptions
about millionaires and the wealthy in general. Hey guys, Daniel here from Next Level Life
and it recently occurred to me that I’ve been neglecting a huge part of what it takes
to have that next level life that we all dream of… because whatever your dream life is,
you need to have the finance resources in place first to be able to live it. So with that in mind I’m going to be starting
this new series on my channel covering various topics in the field of personal finance. And as you can see by the title for my first
video of the series I wanted to talk about a simple plan that, if stuck to, will practically
guarantee your future millionaire status as well as take a moment and really define what
a millionaire is and is not. Because believe it or not even for the average
American it is possible. No you know what possible is too soft of a
claim because it’s more than possible. In fact if you follow a few simple steps it’s
almost guaranteed. Don’t believe me? Well hopefully over the course of this video
as well as the rest of my personal finance videos that will be coming out soon I’ll be
able to convince you. So without further ado, let’s get started. What is a millionaire? A millionaire is simply someone who has a
million-dollar positive net worth. Meaning after subtracting debts and other
liabilities and expenses they have a million dollars worth of stuff leftover between their
cash their house and all their other assets. That’s really all there is to it. It has nothing to do with how much money you
make. It has nothing to do with what type of person
you are or how well-known you maybe, it simply means that your assets are valued at least
1 million dollars greater than your liabilities. But how can the average American get to that
$1000000 positive net worth in their lifetime? I mean $1000000 that’s 6 zeros, i’d imagine
that most of us have never written a check with more than three zeros. Unless of course you bought a new car or house
with cash and if that’s the case kudos to you, you may not even need this video because
you’re already probably well on your way to that million-dollar net worth. Now I said that if you follow a few simple
steps it’s not only possible to reach that million-dollar marker, it’s almost guaranteed. Let’s find out how. Well I did a few calculations and found out
that over the course of the last 40 years the S&P 500 has returned an average of 8.6
percent per year not including dividends. Now technically speaking past results are
no indicator of future returns, but until we see the future returns this is the best
we’ve got to go off of. So assuming that over the next 40 years the
market does roughly the same as it did since 1978 you could invest $261.03 per month over
the next 40 years and become a millionaire. Again assuming no dividends. Now 261 dollars may seem like a lot but when
you break it down it’s not even $10 a day, and there are lots of ways to save money. You can cut cable, or go down to a lower internet
speed, or not eat out quite as often, or use coupons when you’re shopping for groceries,
or you can do none of those things and instead find a way to make a little bit of extra income. Maybe you start mowing lawns or shovel and
driveways on the side, maybe you start selling old clothes that you don’t need anymore online,
or if you’re young you might be able to start teaching people how to use social media better. You’d honestly be amazed at how many people
would pay you to do that. There’s a ton of options out there, all you
have to do is pick the one or maybe few that work out the best for you and start your own
Journey on the path to becoming financially independent. Now there’s a couple of things that I want
to clear up before ending the video for those of you who are a little bit more Analytical
in nature. That 8.6 percent is the geometric mean rate
of return that the S&P 500 has had since 1978 according to Yahoo finance. All I did to get it was go through each year
and look at where the market was in September because as of the recording of this video
September just ended. Then I put them all into the Excel spreadsheet
and calculated the return. And I think the reason why we hear so many
different rate of returns thrown around by Financial gurus is because of the inflation
effect. I’ve heard gurus say that you can expect to
earn anywhere from 6 to 10% per year in the market. And depending on what time frame and type
of average you use any of those numbers could be true. For example if you go from 1978 and use an
arithmetic average the average return on the market would be about 9.7 percent per year. Inflation is generally assumed to be about
three to four percent so if you adjust for inflation your realized return would be somewhere
in that 6 – 7% range. If you don’t adjust for inflation of course
you’re at nearly a 10 percent return. So there you go there’s a simple formula to
retiring with the amount of wealth that most of us would consider to be rich. I hope you enjoyed the video and if you did
or if you learned something be sure to like And subscribe I’ve got a lot more of these
Finance coming out in the near future as well as some more book summaries including one
on David Bach’s book entitled the Automatic Millionaire, which might be a good one to
check out if you haven’t already and you’re struggling to save money. But with that being said, thanks for watching
and have a great day.

29 Comments

  1. Jaz Rai says:

    Excellent! Love the graphics!

  2. tomj528 says:

    Great video, giving all the information anyone needs to become wealthy. It's disheartening that more folks haven't watched or commented.

  3. Mu'min InshaAllah says:

    I've seen like five of your videos so far, if I have to see that stupid red car, the thinking man, the smiling guy in the suit with thumbs up, or the pile of gold coins again I'm gonna blow my brains out

  4. 1Down 5up says:

    Like the content but the drawing crap is distracting.

  5. G Clem says:

    inflation is closer to 2% per year

  6. Marijn Stollenga says:

    Geometric average is not so great in this case; if the market goes down 10% one year and up 10% the next year this average is 0%, while the market is lower than in started. Better take the n'th root of the fraction between value of the market at the end and beginning of the period you look at, where n is the number of years!

  7. jamie t says:

    I started my 401k plan over 30 years ago with a saving rate of 4% and company match of 2%.   It was $16.80 a week, and believe it or not, it was a struggle for a young guy with a family to even do that.  Each time I got a raise, I would bump my contribution by half (sometimes 1/3) of the raise percentage.   After several years, I was able to get to 10% and my complete company match of 5%, without it hurting or really even noticing using the small increments that I did.   Long story short, if you had told me 30+ years ago that I would have seven figures in my 401k, I would have thought you were crazy.  Not so crazy now.   I attempt to pass this method along, but the young guys think it's crazy.

  8. lzi So says:

    I over your videos! I'm learning a lot! Thanks!

  9. Samantha J Wright says:

    Glad I found your videos.

  10. Saif Ejaz says:

    Good stuff man. For the longest time I thought you were drawing those images.

  11. bill fivehouse says:

    what happened to "retire on $10. a day?

  12. monizdm says:

    Wrong. A millionaire is defined, in the high net work asset management world, as net assets excluding primary residence. He includes primary residence, and that is just wrong.

  13. RED CAP BOY says:

    Donald is great best president

  14. Serge Rijkenberg says:

    Typical down payment of a house is above $10k so a 5 figure check shouldn't be that uncommon 😛

  15. x l says:

    Yahoo Finance suffers from survivorship bias; any companies that IPO'd then went bankrupt won't show. For example, you will not see ITT Tech in Yahoo Finance, or any of the companies that went bankrupt in the dotcom burst or 2008/9. This is the reason financial shops, quantitative analysts, and algorithmic traders — the guys making the big bucks — never use Yahoo Finance for their models. Quantitative models with Sharpe Ratios over 5.0 may become negative once survivorship bias is accounted for.

    This may or may not bring your 8.6% number down significantly, depending on what methods you used and whether or not any of those companies are in the S&P 500.

    In the future, this will be easy to correct for with a video like this since ETFs will constantly adjust. Even if 250 of the S&P 500 companies go bankrupt, that will be reflected in an index ETF's prices.

    All that said, your point still stands and you are absolutely correct.

  16. charles910 says:

    $261 a month in 1978 is $997 in 2017. So if you have $1000 to invest every month. In 40 year, yeah you'll be rich or dead before then.

  17. auctionjjk says:

    OK – and 30 years from now, that $1M dollars has a spending power of probably $500k today due to inflation. The bottom line is – you MUST start as young as possible for investing – compounding will do wonders. And you do NOT have to invest double that (remember compounding???) – you'll need to either extend your working career by around 7 yrs, start 7 yrs earlier. Or adjust the years you are investing and invest a little more.

  18. Travel Richie says:

    I guess I am a millionaire still watching your videos.

  19. Sheila Arp says:

    Trump is the greatest

  20. Next Level Life says:

    Want to support this channel? You can and expand your financial knowledge at the same time! Get FREE Audiobooks and 2 Audible Originals (and support this channel!) with a 30-day Free Trial of Audible: https://amzn.to/2zEFqhT

  21. Mahesh S Nair says:

    only if you had a bulk amount and invested for 30 years, that 8.6% would hold true.
    If the person invests over a period of 30 yrs even month, the return will be much less if its market linked, as the market will keep up and down each time while you are investing..

  22. Toty Vale says:

    Are you stupid? Unsubscribing now, your opinions on our president keep them to yourself!

  23. Snowshowslow says:

    Yeah but a million in 40 years is not worth quite what a million is worth today, right? I mean, you're not talking about an inflation corrected million…

  24. John Smith says:

    The problem with your logic is that you will be an old man by the time you reach a million I call that a retirement fund no I want to make my first million when I’m still young.

  25. PROJECT DX says:

    Few people are DOLLAR millionaires. By that I mean they have a millionaire dollars in LIQUID MONEY. Nothing has to be sold like a property.

  26. j3fron says:

    10$ a day?
    Well too much for me
    every 3 days for 10$ to me more make sense!!

  27. Robert McKee says:

    Thank you for posting this video. Too bad we don't see a lot of more positive role models of the super wealthy.

  28. quit the rat race! financial independence says:

    does this take in to consideration compound interest?

  29. Abstract Badger says:

    What would you recommend using for investing service?

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