Summary of Do This EVERY Time You Get Paid (Paycheck Routine)
The video discusses a paycheck routine that can help individuals manage their finances effectively and build wealth over time. The presenter shares five key strategies that can be applied every time one receives a paycheck.
Key Wellness Strategies and Productivity Tips:
- Separate Wants and Needs:
- Create two columns on paper: one for needs (essential expenses like rent, insurance, bills) and one for wants (discretionary spending like dining out, entertainment).
- Analyze recent bank statements (ideally from the past 6 months) to identify recurring expenses.
- Aim for needs to be less than 25% of your income.
- Establish a High-Interest Savings Account:
- Allocate 20% of your paycheck to a High-Interest Savings Account to create a financial safety net.
- Ensure this account is with a different bank to avoid the temptation to spend.
- Your emergency fund should ideally cover 3 to 6 months of your baseline expenses.
- Pay Down High-Interest Debt:
- Use the remaining 30% of your paycheck to pay off high-interest debts.
- Consider two methods:
- Avalanche Method: Pay off debts with the highest interest rates first.
- Snowball Method: Pay off the smallest debts first for psychological motivation.
- Invest in Tax-Advantaged Accounts:
- Explore High-Risk, High-Reward Opportunities:
- Allocate 5-10% of your paycheck towards starting a side hustle or business.
- Consider investing 5% in cryptocurrencies, understanding the high risk involved.
Presenters/Sources:
- The video is presented by an unnamed individual who shares personal experiences and strategies for financial management.
Notable Quotes
— 04:30 — « Don't think I'm just saying if you're poor then just earn more money. I understand there is much more to it than that. »
— 06:10 — « Life isn't smooth sailing and at some point an emergency will come your way. This pot of gold will always be there for you when you need it. »
— 07:46 — « Why bother investing in stocks for a possible 8 to 10% return when you can have a guaranteed 25% return by paying off the debt that's constantly eating into your wealth every single day? »
— 08:10 — « It's kind of like someone asking you what the best foods are to eat and exercise routines to follow while knowingly having a parasite inside their body sucking away all the nutrients. »
— 16:43 — « I've got about 5% of my investment portfolio in Bitcoin and Ethereum as I believe in the long-term potential; however, I'm very aware this is very risky and it could all go to zero at any point. »
Category
Wellness and Self-Improvement