determining their relationship between consumption
consumption
and production now cast your mind back
to those statistics
i mentioned at the start of this video
what part of the consumption versus
production relationship do you think
is at fault here consider yourself for a
moment think about all the money that
has entered your life
and left how much of that do you still
have in possession today or invested
into some sort of asset
and which part of this relationship do
you feel is unbalanced or needs
improving the likelihood is
both but for most of us the biggest
issue lies in our consumption
remember the career builder study that
found that 78 of american workers were
living paycheck to paycheck
well it also found that of the workers
who made a hundred thousand dollars or
more a year
one in ten of them were living paycheck
to paycheck now you could argue that
someone earning six figures a year may
still like to earn more
but when you are paid a figure that is
well above the average wage and the cost
of living and yet you still
somehow find a way to spend it all i'd
argue that your relationship with
consuming must be fixed before you even
consider your relationship with production
production
as any wealthy celebrity who has filed
for bankruptcy can show us
production means nothing when you have a
problem with consumption [Music]
a rat race an endless self-defeating or
pointless pursuit
sometimes the rat race is conflated with
working a nine-to-five job it's a
comparison often used by certain
individuals to guilt you into buying
programs and books for them but this
seems extremely unfair
mostly because it aims to villainize a
job and excludes the fact that there are
those who either love or are perfectly
fine with their jobs or have other
aspirations aside from their nine to five
five
a real rat race is one that is living on
a financial edge
being one paycheck away from broke
constantly a feeling as though the
moment money enters your life
it immediately disappears and the more
responsibilities you have
the more dangerous this relationship
becomes the loss of a job
an unexpected health accident or any
unexpected circumstance for that matter
can throw your entire financial position
into turmoil and consider the mental
consequences of living on this financial edge
edge
your job no longer becomes an option it
becomes a necessity in order to keep
funding your lifestyle
or to keep paying off debt to quote
tyler durden from fight club
what's the silver lining it doesn't have
to continue like that
the first stepping stone in personal
finance will have you drawing an
awareness to your relationship with money
money
this is often done by journaling your
monthly expenses
categorized as housing transportation
food utilities entertainment and so on
it's about
understanding yourself as a consumer but
this part is tough
in behavioral finance this feeling can
often be labeled as the ostrich effect
which is our tendency to want to avoid
negative financial information it's that
feeling you get when you refuse
to look at your bank account after a
night out fearing what it might show and
yet once you pass this stage
it's time for you to take control over
your behavior as a consumer
this often involves the idea of
budgeting deciding each month how much
you aim to spend on each of these
categories and sticking to it it's about
systematically looking at what you
consume and finding ways in which you
can minimize these things to ultimately
live below your means in other words
having a lifestyle that still leaves you
with enough money to save and invest in
some form or another
it's also important to note that before
you ever decide to invest
one of the most common practices in
personal finance is to keep an emergency fund
fund
a specific amount of savings that you
hold onto in case of an emergency
this fund would typically hold three to
six months worth of expenses
the idea however of living below your
means is an important one
because why would we choose to do
otherwise why would we choose to live a
lifestyle that we cannot afford or one
that places us
on this financial edge i could make an
entire video on our cognitive biases the
ostrich effect is just one of which can
affect your financial position then
there's hyperbolic discounting
a tendency to favor short-term rewards
as opposed to greater rewards in the
future this is you choosing to purchase
a new pair of shoes instead of saving
that money towards a future investment
or their social proof
our tendency to think and act as others
around us think and act
when the people around you are buying
one thing you buy it too
or when the people around you establish
money as a means of evil you're likely
to assume the same thing too
the phrase keeping up with the joneses
summarizes this great problem of
consumption it's a phrase defined by
google as trying to emulate or not be
outdone by one's neighbors
they buy a new porsche you buy one too
they have nice clothes
you get some too they renovate their
home you do it too all in the attempt of
impressing or trying to keep up with
others due to some form of social
pressure only in today's world the joneses
joneses
are not literal neighbors they're far
more present than that
we are all vulnerable to social approval
we really care
what other people think of us but the
problem is
we're measuring our self-worth by how
many people
like what we're posting governor of the
bank of canada stated it's succinctly
for most canadians debt is a fact of life
life
at least at some point [Music]
[Music]
to be clear i'm not saying that
purchasing an expensive piece of clothing
clothing
jewelry or sports car is a bad thing nor
do i think consuming is a bad thing the
aim of this video isn't to philosophize
about the repercussions of a
materialistic view of the world
it's about drawing an awareness to who
you are as a consumer
do you care more about appearing as
though you have money or actually having money
money
the rat race isn't about working a
nine-to-five job
but living life on such an edge that it
means that you are chasing the next
thing whether a paycheck or a material possession
possession
such that your greater life goals and
ambitions are placed in the background
in order to continue this race
a budget and keeping account of your
expenses have proven time and time again
to work and draw you out of this race
it's fun to talk about making money or
imagining having as much wealth as
possible but what's the point when your
relationship with money as a consumer
means losing it all or having to work
non-stop in order to fund that lifestyle
that is the real rat race but with all
of that being said
now the stuff we teach here and have for
almost 30 years
is proven what's up you guys it's graham
here so we got to take a moment and talk
about what's going on in the stock
market because as we're finishing up the week
week
stocks personal finance channels like
graham stefan or dave ramsey are great
for learning how to work on your
consumption side of the equation but if
there was one thing i wish they spoke
more about
it would be their ability to make money
and i understand why they don't do this
it's easier to reduce your expenses in
the amount that you consume than it is
to increase your income
when speaking to a mass audience giving
the advice that will work for most
people is typically the best choice
we see that there are entire communities
built up around focusing on frugality
the fire community is one example of
this a movement that adopts the strategy
of living extremely frugally
saving and investing as early as
possible with the intentions of retiring
as early as possible
minimalists also share a similar view to
the fire community although
more deep-rooted in philosophical
positions about the world and
materialism at large
people like graham steffen or dave
ramsey promote strategies that fall in
the spectrum of living frugally saving a
lot of money and investing in the long run
run
and there's nothing inherently wrong
with this strategy it works for a wider
range of people with varying degrees of income
income
but let's be honest graeme stefan
doesn't rely on cutting coupons or
living an incredibly frugal lifestyle to
be making a hundred to two hundred
thousand dollars a month
from youtube nor does dave ramsey rely
on these strategies to have an estimated
net worth of 55 million dollars
these people are utilizing a means of
production at mass scale
in my video the untold truth about money
i talked about money being equivalent to
your perceived value in the market and
the most impactful way of increasing
your value is finding a problem in the market
market
creating a solution for that problem and
selling that solution to the market at scale
scale
this is the entrepreneurial route a
successful business at scale
is able to produce a large amount of
value to a society such that your
production side of the equation grows
exponentially in comparison to a
standard job
but this isn't a route that everyone can
take nor should they try to
it's about reflecting on your own
capabilities and whether
entrepreneurship is best suited to your direction
direction
with that being said increasing your
production doesn't have to just come
from the strict definition of a business
graeme stefan uses youtube as a vehicle
to produce something
in this case videos about personal
finance at mass scale
it's one reason that i chose to create
videos on youtube as well
it's a vehicle to produce something in
this case documentary style videos at a
mass scale
to a point where i can now do it full
time and build a business around it
producing is about providing relative
value to the market in some shape or
form i utilized my skills with acting
presenting storytelling and video
editing to create videos that i hope to
be somewhat entertaining and educational
and thankfully the market responded
positively your form of production may
be developing an
app or software that is solving a
problem you believe the market would pay
money for its solution
or perhaps a fitness brand that is
branded extremely well and utilizes its
community better than most other fitness
brands as i believe is the case with ben
francis and what he did with gymshark
for most people labour in the form of a
standard 9-5 job will be their means of production
production
but this doesn't mean that your ability
to produce stops there
understanding yourself as a producer is
about understanding ways in which you
can produce value to the market
if you can produce value at a large
scale then it means earning money
at a large scale the internet has
thankfully provided a great deal of
opportunity for us to be able to produce
something and put it out to the market
whether the market actually wants what
you have produced can only be determined
once you've released whatever it is that
you've produced
so to summarize it's first important to
bring awareness to yourself
as a consumer understanding what you
purchase and why you purchase by
journaling your consumption and then
giving yourself a budget to manage and
control that consumption producing then
becomes a matter of maximizing the
amount of value you can bring into society
society
through a job a business or some other
means of production
this is a framework that has helped me
greatly as i'm sure it's helped
countless others who have a vested
interest in making money
like this isn't just sushi we're talking
about anymore like this is this is substantial
substantial
yeah and then to go from that to like
this focusing
is that 170 454 dollars yeah
that's insane
hello hello my friends before you click
off the video just yet i want to say one
thing thank you
so much for watching to the end of this
video you watching to this point is
hopefully proof that i've provided some
kind of value to you in some way or
another so
be sure to hit the like button and if
you want to see more videos around the
topics of
business money finance in general then
be sure to hit the subscribe button i've
also got a patreon where i post behind
the scenes stuff and i do
questions and answers and i've got a
bunch of other exciting plans for it so
if that interests you and you'd like to
support the channel further do check it
out the link is in the description below
now for me personally combining what i
know about personal finance
and entrepreneurship has really helped
me the most and as i mentioned
this youtube channel was one way in
which i knew i could produce some kind
of value
into the market at scale if you want to
do more extra reading on these subjects
if it interests you there's two really
good books
on personal finance related stuff the
millionaire next door
and your money or your life these are
really good personal finance books
and of course if you know me you know i
really love
mj demarco's work so check them out if
you want to also see the
entrepreneurship side of stuff but with
all of that being said my friends i hope
you have a wonderful rest of the day
i will catch you in the next video or on
my instagram or twitter if you have me
on there
as usual hands ahead salute
too many times has come to pass
too many moments put aside
getting out alive
getting out of
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