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Tae Kim, founder of the website and YouTube channel Financial Tortoise, has released a YouTube video introducing his 10 ultimate money rules. Here are our top 5 tips.
Check it out: I’m on track to become a millionaire by following Mark Cuban’s genius advice
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This breakdown will help those who are just starting to improve their financial health get started quickly. Don’t be overwhelmed. You can hear all 10 songs by following his video.
Earning passive income doesn’t have to be difficult. You can start this week.
1. Hold 6 months worth of cash
In this first tip, Tae explains the inevitability of emergencies. You may be a great driver, but accidents happen. Your child may be good at sports, but he broke his knee playing soccer.
Things happen, and the last thing you want is to be unprepared and risk financial ruin. If you’re just starting out, you can save up to three months’ worth of expenses. Then continue for up to 6 months.
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2. Build competitive career capital
One of the most important steps to wealth is to become really good at your job. Build houses, teach high school English, sweep restaurant floors. Always strive to improve your skills and level up.
This approach to your profession will go a long way in making you more marketable and employable. You are more likely to keep making more money and keep striving for real wealth.
3. Reinvest in yourself
This leads to the next tip. It’s about reinvesting your money in skills, education, health, and family time. Money spent on these parts of life is never wasted, it is always an investment. You may be paying to read books about your career or health. Maybe you’re paying a gym membership.
Or maybe you’re spending money on a road trip with your family. These expenses make you richer, healthier, smarter, and happier. That is the true meaning of life.
4. Avoid debt
Tae is one of the few financial experts who teaches you to avoid debt at all costs. Taking on credit card debt, car loans, and other types of debt may seem like a smart move.
In reality, these debts often justify spending more money than necessary, leaving us mired in debt. From there, as Tae puts it, it’s “one paycheck away from financial ruin.” Of course there are exceptions, but most debts, including high-cost mortgages, are best avoided.
5. Be frugal
Finally, be known as a frugal person. According to Teh and many other financial experts, frugality is the real key to wealth.
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The richest people spend their money sparingly and only on high-quality items. Amazon or Temu boxes don’t arrive at your door every day. They spend, invest, and grow within their means. As experts say, this is the true and simple path to wealth.
Of course, there are many more tips for wealth building and financial success, but these five are a starting point. If you start by saving for emergencies, investing in yourself, staying out of debt, and being frugal, you’re already more than halfway there.
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This article originally appeared on GOBankingRates.com: 5 Ultimate Money Rules for Building Wealth with Financial YouTuber Tae Kim
