Transcript

How You Can Build Wealth on Minimum Wage

How You Can BUILD WEALTH ON MINIMUM WAGE The U.S. federal minimum wage is $7.25 per hour* What Is Wealth? $ 7.25 2000 hours $ 14,500/year $ 14,500 385 approximate taxes owed Wealth Mansions and Private Jets $ 14,115/year You can own mansions and private jets and still be broke if you incur enough debt. Instead, we define being wealthy as: "Having enough money to cover all expenses for a long time" After all, the best part about being wealth is not having to worry about paying the bills. If you make minimum wage, it's much harder to get wealthy, but it's possible. 66 The difference between spending $6,000 vs spending $20,000 generally comes down to spending money extremely deliberately vs. just spending it. 99 - Jacob, Early Retirement Extreme 10 STEPS TO BUILD WEALTH WHILE ON MINIMUM WAGE MOVE TO AN AFFORDABLE CITY You can't get wealthy on minimum wage if you live in San Francisco or NYC. 1 Buffalo, NY 10 Detroit, MI NYC 3 Fort Wayne, IN San Fransisco 7 Akron, OH 2 Springfield, MO 4 Knoxville, TN 6 Birmingham, AL 9 Amarillo, TX 5 Jackson, MS I Non-Cheap City I Cheapest City 8 Shreveport, LA CHEAPEST CITIES TO LIVE IN Rank City Median Median House Overall Cost Independent Cost of Living of Living US Avg= 100 Home Value Monthy Rent Buffalo, NY $ 66,900 $ 512 92.75 79.34 Springfield, MO $ 106,200 $ 525 95.54 79.92 3 Fortwayne, IN $ 98,700 $ 535 94.21 80.77 4 Knoxville, TN $ 116,700 $ 589 90.14 82.26 Jackson, MS $ 88,400 $ 576 93.42 82.51 Birmingham, AL $ 86,000 $ 521 96.31 83.29 Akro он $ 81,400 $ 541 97.94 83.65 Shreveport, LA $ 124,700 $ 578 92.31 83.65 Amarillo, TX $ 116, 500 $ 588 91.01 84.24 10 Detroit, MI $ 42,300 $ 553 96.66 85.21 Common Excuses For Not Moving Most people complain about high cost of rent and groceries, but they wouldn't even consider moving to a cheaper part of the country. "I love living here" "I like my job" "All my friends and family live here" But you can't make minimum wage, live in an expensive city, AND be wealthy. You can make excuses, or you can do $$$ something about it. It's your choice to make. FIND A PLACE TO LIVE THAT COSTS LESS THAN $600 PER MONTH IN RENT $600 a month is enough to cover the median monthly rent in an affordable city. $ 600 12 months $ 7200/year Try to get utilities included Split living $ 14,115 expenses with (water, heat, electricity) someone $ 7,200 Annual Cost $ 6,915 Remember: Saving just $50/month is $600/year. ELIMINATE YOUR COMMUTE Getting rid of your average commute will save you $6915 per year! $ 6,915 38 $ 0.51 $ 19 miles per mile per day O Annual Cost Round Trip IRS driving in commuting cost estimate $ 6,915 costs Instead of commuting: Sell your car Buy a used bike Move within biking distance of work CANCEL YOUR CABLE A standard cable subscription can easily cost close to one grand a year! Instead: $ 6,915 Get an antenna Get an annual 400 Including Internet and watch free Netflix NETFLIX, broadcast subscription $ 6,515 channels Better yet, stop watching TV and go outside! DON'T EAT OUT .unless you absolutely must e.g. dinner with the boss Instead: Buy food in bulk when it's on sale Only eat vegetables in Consider only eating meat 1-2 times a week Learn to cook. Spices are your friend season If you follow these rules: your food costs should be less than $75 a month, or $900 a year Elon Musk once ate for $ 6,915 less than $1 a day, just so 900 Annual Cost he could go after lofty goals knowing if he went $ 6,015 broke, he would be fine. DON'T SKIP HEALTH INSURANCE It can save you money in the short term, but can also bankrupt you. Instead, choose a high deductible plan. $ 6,015 Average cost after $ 1,704 tax credit $ 3,911 SHOP AT THE THRIFT STORE & MEND HOLES instead of throwing clothes out $ 3,911 1.50 100 Annual Cost $ 3,811 REDISCOVER THE FACT THAT A LOT OF THE BEST THINGS IN LIFE ARE FREE You don't need to spend money to have fun: Go for a bike ride Do yoga outdoors Have a picnic in a public park Play sports at the community center Read at your local public library Play old board games Learn DIY skills on youtube Start a blog Take a hike Call an old friend $ 3,811 O Annual Cost $ 3,811 INVEST YOUR REMAINING MONEY After covering expenses, we're left with: $ 3,811 Here's how to spend it to build wealth: Pay off all credit cards (if any) Establish 6 month Open a retirement emergency fund account and buy low -fee Vanguard funds 10 INVEST IN YOURSELF Spend your free time: Upgrading your job skills (e.g. trade school, community college) Learn to make money on the side (e.g. driver for uber, sell furniture on craiglist) If you increase your earnings to a modest $32,000, you could become financially independent in just 10 years Year Total Savings Passive income* Expenses $ 22,563.84 $ 867.84 $ 10,304 $ 46,030.23 $ 1,770.39 $ 10,304 3 $ 70,435.28 $ 2,709.05 $ 10,304 4 $ 95,816.53 $ 3,685.25 $ 10,304 $ 122,213.04 $ 4,700.50 $ 10,304 6 $ 149,665.4 $ 5,756.36 $ 10,304 $ 178,215.85 $ 6,854.46 $ 10,304 $ 207,908.33 $ 7,996.47 $ 10,304 $ 238,788.50 $ 9,184.17 $ 10,304 10 $ 270,903.88 $ 10,419.38 $ 10,304 *Assuming a 4% inflation adjusted return Remember, getting wealthy is a series of choices you make. Getting wealthy if you're earning minimum wage is not easy, but if you're reading this, you can make it happen. Resources Presented by www.hrblock.com/get-answers/tax-calculators.html O INVESTMENTZEN lifehacker.com/5848665/the-true-cost-of-commuting en.wikipedia.org/wiki/Minimum_wage_in_the_United_States smartasset.com/mortgage/top-ten-cheapest-places-to-live earlyretirementextreme.com/how-to-get-wealthy-on-minimum-wage.html www.thesimpledollar.com/100-things-to-do-during-a-money-free-weekend earlyretirementextreme.com/early-retirement-extreme-retirement-pla.html www.businessinsider.com/elon-musk-living-off-a-dollar-a-day-startalk-2015-3 aspe.hhs.gov/sites/default/files/pdf/212721/2017MarketplaceLandscapeBrief.pdf * As of Jan 2017 %24

How You Can Build Wealth on Minimum Wage

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