6 Things I Obsessed Over That Made Me Richer (Retired Before 40)

When I realized that if I wasn't good with $1,000, I wasn't going to be good with $100,000 or a million, I would just become a richer spender, that really hit me. Most people think that the solution to their money problems is very simple. I just need to earn more. But here's an uncomfortable truth. If you are bad with money right now, earning more money is not going to fix the problem. If you can't manage $1,000 in your bank account today, then you won't be able to manage $10,000 or $100,000 in your bank account tomorrow. You'll keep being bad with money but on a much larger scale. And I know this because this is precisely what happened with me. I was working in finance, investment banking to be precise, and I was earning a pretty decent salary, and yet I was living paycheck to paycheck and still living in debt. Because I kept thinking, it's fine, the next paycheck was sorted out, and I kept telling myself I will start saving next month. And one day it finally hit me. Your relationship with money is probably the one thing, other than your health, that will affect your life the most. I finally realized that being good with money and building wealth has nothing to do with how much you earn, or your age, or even knowing how to pick the best stocks. It's about a few repeated habits. It's the ones that nobody teaches you, but once you understand, will change your financial life forever. And so in this video, I am breaking down the six money habits that actually worked for me, and helped me build wealth and become financially free before the age of 40. The first thing I did may sound a little bit weird, but it was so powerful. I chose the quiet journey. I did not tell anyone what I was doing. In a world where oversharing has become the norm, moving in silence is so powerful. Because the truth is, when you tell people your plans too early, you invite opinions, doubt, and even sometimes subtle pressures to stay exactly where you are. And not everyone means harm, but when you're trying to change your financial life, even the smallest comments can really throw you off. And not everyone will want you to succeed, especially if they don't have their finances in order, or they're in heaps of debt. Some people are only supportive of your progress as long as they think you're not doing as well as them. A client of mine once used this analogy that I've never forgotten. He said, moving in silence is like swimming underwater. Keep going so that by the time you come up for air, the gap is so wide that nothing and no one can touch you. And so I kept it to myself. And over time, something else happened. As my savings and investments grew, I realized I had options. I didn't have to stay in a job if I hated it. By the way, I really enjoyed my job and my clients, but just knowing that I could quietly walk away if I wanted to, changed everything for me. And that's why I strongly believe this. Move in silence and build in private. If you're new here, hi and welcome. My name is Jumoke and I worked as an investment banker for close to two decades, managing wealth for the rich. On this channel, I post videos every Sunday on personal finance, investing, and wealth creation. If that sounds interesting to you, do not forget to click the subscribe button. Hit the notification bell so you do not miss any new videos every week. Moving on to the second thing I did religiously, I tracked my net worth to ensure it was moving in the right direction. In case you need a refresher, your net worth is your assets minus your liabilities. So in other words, it's everything you own minus everything you owe. And the difference between the two is what's known as your equity or your net worth. And the bigger and more positive your equity, the wealthier you are. Most people focus on income, but at the end of the day, there are only two things that can happen to It flows out when you spend it or it stays with you when you save or invest. Your income doesn't mean anything if all it does is flow out of your bank account the minute you earn it. The real question is what you do with that income. For example, let's say you earn $200,000 a year in income. That's a lot of money, but you also have debt of $350,000 and zero in assets because, well, you spend everything you make. On the other hand, let's consider someone who earns $60,000 a year in income. Sadly, today that isn't very much, but they also have zero in debt and maybe a small but fully paid off house worth $200,000 or an ETF portfolio of $150,000. It's obvious who's in a more financially stable position. Societal programming is basically to just go and get a good job so you can essentially buy more things and get into more debt. You don't need independent thinking or financial literacy to do that. In fact, it's pretty easy to get into debt, but it does take financial literacy to accumulate assets instead of liabilities. Increasing your net worth by either increasing your assets and reducing your liabilities in a world where everyone shows the best part of their lives online, where people are more focused on acquiring status symbols and looking rich versus actually being rich is the difficult thing to do. But if after crunching your numbers, you realize that your net worth is negative, i.e. you have more liabilities or more debt than assets, it's only natural to feel bad. But please do not feel bad. I want you to get excited at the prospects of changing your situation. That's exactly how I started and I eventually became obsessed with investing. And also remember, we all have different starting points in life. So rather than judging yourself for not being further ahead, just put the energy into moving forward instead. Focus on direction and not speed because most people will start this journey pretty slowly. Maybe saving $100 or $200 every month or maybe reducing your debt by $200 every month. That may not seem like much at first, but it has the potential to build into something that is pretty much life-changing. According to a recent analysis on The Money Guy show, consistently investing around $583 a month in a Roth IRA account, earning around 8% annually, you can actually hit a million dollars in just under 30 years. That's how I went from consistently having a negative balance at the end of the month to building wealth that helps me buy back my youth and my time for my employers. And I really thought it would take many decades, but I soon learned that what gets rewarded gets repeated. And so consistency is super important. And also remember that the pace you start with is not going to be the pace you end with. You get better with time, you get more confident in recognizing and seizing opportunities, and you meet people that you would have never imagined would be in your life to help you along the way on your journey towards your dreams. But in order to experience that, you have to at least get started with moving in the right direction. I worked towards what I call crossing the chasm. So the chasm is essentially that pivotal point at which your monthly investment income crosses your living expenses. And that's the definition of financial freedom, when you no longer have to sell your time to get paid in order to survive. This is the point at which you get to live your life on your own terms. You get to choose what you want to do with your time, where you want to do it, how you want to do it, and with whom you'd like to do it. Crossing the chasm means that you've created another option. When this happened, for me, a huge weight was lifted off my shoulder, and I could finally separate work and the emotions and all the goings-on at work from home, from my personal life, because I quietly knew I had options. And that's the point. If I wanted to call it a day and say to my managers, thanks very much for the opportunity, it has been life-changing and fantastic, but I'm off, I could do that. And eventually, I did. But to do this, I had to know what crossing the chasm would actually look like for me. I had to know what my incoming and my outgoing cash flows were. And this is where a budget was incredibly helpful. Back then, there weren't many apps like we have today, and so I essentially just built myself a dynamic budget, and it's one that I still use till today. Don't judge me, I'm pretty old school, but if you would like a copy of this, I will link it below. Building wealth isn't just about data and numbers, it's also about how you feel. And this leads me on to my next point, which is that I noticed that my feelings when spending money changed. Feeling great about spending money doesn't just come from having loads of it, because there are people with millions of dollars in the bank who still feel insecure and incapable of spending money in a joyful manner. So having a lot of money doesn't necessarily make you good with money or make you feel good about spending it. From my personal experience, feeling good about spending money comes from knowing that you can actually afford whatever it is you're buying without jeopardizing more important goals and priorities. And even better, feeling good knowing that you're spending your investment cash flow and not your salary or your base capital. There's really nothing wrong with spending your money in a considered manner that brings you happiness. You should be happy when spending, after all, you've worked very hard to earn all of that money. However, the problem is when you swipe your card for something, and at the back of your mind, you're feeling this low-key anxiety because you know that there is probably something smarter or better that you could spend that money on instead. And from my experience, the only way to really feel great about whatever you spend your money on and not consistently experience this anxiety is by budgeting. If you're going to spend a thousand dollars on art, for example, or on a holiday, you want to feel great about it and not guilty. I traveled a lot over the last 90 days. I visited my happy place in the Middle East twice. I visited lovely Africa and different parts of Europe and I was able to do this because I budgeted for it. And I also realized that, well, I'm in my prime years and I would rather enjoy traveling now than put it off until I'm in my 70s or my 80s. And it just felt good knowing that these holidays weren't going to cost me in other areas because I had put away money for my trips. The only way to have this clarity when making spending decisions is to start budgeting. Again, I've linked my budgeting template below so you don't have to build it yourself from scratch. And I also posted a detailed step-by-step budgeting video explaining exactly how this template works and I will link that video below so you can watch it after this one. I obsessed over being financially prepared for almost anything that could come my way. I can tell you that there is nothing more demoralizing than feeling like you are finally getting ahead and then all of a sudden getting hit with some unexpected bill. Now, most people are very good with keeping up with irregular or reoccurring expenses but what tends to get people are those unexpected expenses. I remember having a dental emergency when traveling on business years ago and it cost around £600 which is roughly $800. I paid it, not a problem. My dentist is very expensive but I've been with her for 19 years for a reason. Anyway, I went back for a routine checkup and I was told that I needed implants in the region of £4,000 which is roughly around $5,300. So yes, those all of a sudden expenses are very unpleasant because they make you feel like you're always playing catch up instead of getting ahead. But here's the thing, even though these expenses are unexpected in the sense that you never know when they're going to come up and how much they're going to be, we know that they will come up. Whether that is fixing or buying a new car, home maintenance and repairs, medical or dental bills or even relatives or family needs. The easiest way to do this is by setting aside an emergency fund or as I like to call it a life happens fund. At least you'll have something put aside and won't be starting from zero. You can start today by saving $100 a month or whatever it is that you can manage towards an emergency fund. This automatically puts you in a safer position than 37% of Americans who aren't able to cover a $400 emergency according to a US Federal Reserve survey. Another survey by Vanguard found that even having just $2,000 saved can make you happier. So an emergency fund is super essential and it's one of seven accounts that you really should have on your way to financial freedom. I talk more about this in a separate video and I'll link it below if you'd like to know what those other accounts are. The next thing I consciously did was I started talking about money a lot more. Alright so my first point was to move in silence and not tell anyone about your journey but hear me out. When I say talk about money I mean talk to the right people about it. Wealthy people do not have a problem talking about money and sharing best practices and opportunities. They actually have annual conferences just to talk about money and what new ways there are to protect and grow their wealth for the next generation to enjoy. But the point here is if you want to build wealth you learn about it, you seek advice, you work on it and you talk about it with professionals or perhaps those who have done what you're looking to do. You learn the vocabulary, you improve your financial literacy, you understand what an ETF or an index fund is, you understand what credit scores are, an income statement, you understand how interest rates and inflation affects you directly or if you don't know you ask about it and you find out. It's a lot easier to talk about money openly when you understand how money works and you have some level of financial education. Unfortunately a lot of people don't learn these things from their parents growing up. That might be because their parents were unaware or may have not been comfortable talking about money because they see it as a taboo or just didn't think it was important to talk to their children about. But it's not too late to change that. What matters isn't what your finances actually look like right now or what's happened in the past. What matters is that you're taking actions to make your finances just a little bit better every day and that you're moving in the right direction. Now all of this is pretty simple, I think you'll agree, but none of it is easy. But that's the gap between where you are now and where you want to be in the future. When I realized that if I wasn't good with $1,000, I wasn't going to be good with $100,000 or a million, I would just become a richer spender, that really hit me. And it's worth taking a look at what your relationship with money is and starting to work on that today. And I post videos like this one every week so that you can start to get a sense of what it really feels like to achieve financial freedom and live life on your own terms. I'll see you in the next one, look after yourself, bye.