Millennial Money Makeover

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Hello everyone and welcome to ideas for
living better I' m gigenio fence ruiz,

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heavy reader and lover of personal development. In today' s episode we

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' re going to talk about a
book on personal finance that' s addressed

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to the millennials, it' s
called Millennial Monima and Cover. It is

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published in English only and is written
by Connor Richardson. But first as always,

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remind yourself that you have at your
disposal a compilation of the best ideas

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and tips on personal development. In
my own four books. You already know

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them free, healthy and happy,
thirty- one days to improve your life,

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minimalism for normal people and seven steps
for a purposeful life. You know

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you have them available on Amazon and
I leave you their link in the episode

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notes and now we will talk about
the four steps the book gives us to

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start being financially free. Managing personal
finances is complicated for everyone, not just

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the millennials, but it is true
that for this generation born between the early

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1980s and the mid- 1990s,
it is perhaps a little more complicated.

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Why. Because generations before these millennials, especially from the decade of nine hundred

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and fifty, enjoyed relative economic stability
For much of their professional career, their

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lives followed a fairly predictable sequence.
It all began with a stable job that,

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moreover, was for a lifetime.
The purchase of a house, of

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a flat, continued with the acquisition
of assets once that mortgage was out.

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And lastly, a retirement was achieved, because with a good patrimony, more

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or less with a pension or with
enough savings. But after the global recession

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of the year two thousand and eight, the economic landscape changed dramatically. Finding

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a stable job, which is that
first step in the conventional sequence of things,

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became a challenge. In addition,
the cost of living increased at a

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faster rate than the salaries did and, if that were not the case,

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housing prices skyrocketed. The result is
that, according to official data, approximately

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three out of four millennials today have
less than ten zero euros saved. But

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the most worrying thing is not the
earliest occupants that many millennials lack the necessary

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knowledge to overcome these obstacles. In
fact, according to recent statistics, approximately

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three out of four millennia are declared
financial illiterates themselves. What does this mean

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that they are not familiar with even
the most basic concepts of personal finance.

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Three out of four. This lack
of financial education leaves them in a very

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vulnerable position. There are many challenges, as we have seen, and these

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people are in a vulnerable position.
Of course, from that point of view,

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it is not surprising what the book
tells us, which basically claims that

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most millennials feel stressed. From the
financial point of view. The traditional sequence

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that worked for previous generations without having
to have financial acquaintances already serves us in

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today' s world. So financial
education is no longer optional. Now it

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' s a basic you have to
know. And the problem is that the

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system teaches us absolutely nothing about money, when it' s something we use

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every day. It' s quite
surprising. Maybe this lack of financial education

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favors someone I don' t know. What I do know is that banks,

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for example, are interested in charging
the more fees the better. Banks

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are interested in people being defied I
do know that. I also know that

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the media constantly bombards us to buy
things. I don' t care whether

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they' re bags, whether they' re smartphons, whatever they are,

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and that keeps us even further away
from financial freedom. So, this lack

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of knowledge, coupled with the constant
external influence, explains why many people fall

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into deu or make compulsive purchases that, in the long term, will harm

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their financial situation. And it all
starts because many of us have an inaccurate

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idea of what it means to have
financial success. Still today we imagine the

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richness in terms of material possessions,
car houses, designer clothing, expensive meals

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in a luxury restaurant or luxury vacation. But real financial success is not about

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accumulating material things, but about achieving
financial freedom, having the flexibility to take

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time off at work or to travel
or to dedicate yourself to a project that

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passions you without constantly worrying about your
finances. In fact, for me financial

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freedom could be considered as the ultimate
form of self- care, simply because

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it gives you the peace of mind
necessary to be able to focus 100%

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on your well- being or your
personal growth. So, this book gives

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us the first four steps to achieve
that financial freedom. The first step,

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though difficult, is to free you
from the debts. Financial freedom and debts

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are absolutely incompatible and about half of
the millennials admit to having debts distributed on

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more than three credit cards. And
you know the problem with credit cards is

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that they make it incredibly easy to
live above our possibilities and, besides,

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they can become a snowball for those
interests they generate. So, what I

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recommend is that you make a list
of all your debts in ascending order.

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Why not ascending order, because it
is advisable to start paying smaller debts first,

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for a reason of basic psychology.
I don' t know how the

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book explains that it has been seen
that people who pay their smaller debts first

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are more able to pay them all
in time. That' s the first

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step. The second is to create
a budget. You have to have a

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budget, like all companies have,
and the secret to budgeting is not to

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live an ascetic life. It'
s just that you prioritize purchases that really

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give you satisfaction. Take all your
expenses. It puts aside fixed expenses rent

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bills debts and what you have left
are variable expenses, i e non-

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essential purchases. And from there he
uses the rule of eighty- twenties.

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Use the law of pareto that we
have talked about so many times here,

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identify which groups of variable expenses are
the ones that give you the most satisfaction.

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And you' re gonna be surprised
because you' re gonna realize how

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many stupid purchases we make every month. Those are the expenses you must try

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to eliminate and that is the money
you must use for that first step,

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which is to pay your debts.
Yeah, but I' m considering buying

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a car or a house is fine, but it also gives us the book

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a concept to do it intelligently.
Come on. Let' s go first

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with the car. First, we
have to understand that a car is not

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technically an investment, because a car
depreciates loses value over time. In fact,

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a new car can lose up to
ten percent of its value as soon

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as you get it out of the
dealership. So, if you' re

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thinking about buying a car, the
smart thing is to consider the option of

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buying a second hand car and if
you also pay for it in cash,

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it' s already ideal. Second
hand paid in cash is the best of

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options. Sure, in the case
of a house, that is an investment,

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but buying a house too soon can
be a bad investment. Especially for

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those for the millennials, who are
the ones who go and talk about the

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book. Why, because millennials change
jobs more often, they move many more

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times than previous generations. So,
if you decide to buy a house,

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make sure all your debts are settled
first. Also make sure you have a

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ten or twenty percent deposit ready for
purchase. That' s fundamental Now,

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once you' ve freed yourself from
the debts. The second step the book

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gives us is to start saving,
and the book proposes savings on three levels.

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The first level is to create an
emergency fund in which you have enough

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money to cover unexpected expenses that,
otherwise you could be indebted then, as

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a general rule, it is recommended
to have saved the equivalent of a month

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of income. This is in case
you break your washing machine one day or

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your car gets ruined and you need
to change a piece that costs a lot

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of money. It is important that
this money is not invested, that it

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is easily accessible in case of emergency. It doesn' t matter whether I

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give you interest or not, but
you have to have a month' s

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salary set aside. Just in case. The second level of savings is a

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mattress. At this level you have
to have saved the equivalent of six months

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of expenses. Having this financial mattress
will give you peace of mind in case

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you lose your job or other unexpected
situations occur. Think of the pandemic,

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for example. Make sure that this
fund is in an account that offers an

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annual percentage return, i e you
get paid an interest rate for having that

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money in that account. And the
third and final level of savings is getting

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ready for your retirement. The good
thing about being a millennial in this case

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is that time is on your side. Then look for products that offer you

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tax advantages and start building this level
of savings. Today, these are the

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first two steps. The third step
after freeing you from debt and starting to

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save on these three levels. The
third step is to invest. When you

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invest, you' re putting your
money to work for yourself when the money

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is in your account. When you
don' t use it, you'

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re not accessing its potential utility.
However, if you lend your money to

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a third party, a bank or
an investment fund. They use it for

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profit and, in return, offer
you a rate of return, that is,

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a percentage of the profits they generate
with your money. When it comes

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to investing. You know there are
several options. There are many people who

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choose to invest by buying shares.
Buying shares implies acquiring a stake in the

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ownership of a company. Shares represent
a small fraction of a company and as

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a shareholder you are entitled to receive
part of the profits that company generates.

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You can buy stock through the stock
market is public and you can buy stock

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alternative to stock. You can invest
in bonds, for example, government bonds

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or corporate bonds. In this case, instead of buying a stake in the

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company. What you' re doing
is lending money to that company and it

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' s going to pay you back
that money with interest within the time frame

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you' ve agreed. This happens
with companies, with states, and so

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on. And then you can also
consider investing in an investment fund, which

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is funding two collectively by several investors
who decide to participate in it and there

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is a fund manager who is responsible
for investing those joint contributions. You can

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also invest in real estate, you
can invest in many, many things,

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but it' s about that once
you have the savings, then don'

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t keep saving more. Then go
on to invest And the last step that

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the book gives us, after paying
off your debts, after saving, after

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investing is putting your finances on autopilot. You have to find what the book

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calls the financial flow, that is, that every month when your salary is

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entered into the current account automatically goes
to different games, for example, ten

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percent to an indexed fund, ten
percent to savings twenty percent to turn off

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this debt, because if you do
it automatically, first you don' t

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have to think about it and second, you know from the beginning the money

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you actually count on. And to
do this, by the way, it

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' s better to have all your
accounts, all your products in the same

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bank. You save time, you
save commissions, you save yourself trouble and

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you have a better track of your
money. So you know, many millennials

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feel that they can' t make
financial progress, that they don' t

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know about finance that they' ll
never be free. And actually, it

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all starts with four steps. First, eliminate debts, second, start saving

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on three levels, third invest and
fourth, put your finances in automatic mode.

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If you are millennial and start doing
this, now you are going to

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be able to reap the fruits that
allow you to live a better life very

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soon. If you liked this episode, please subscribe to the channel share it

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on social networks or visit three WWS. Point ideas to live better. Period.

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There you can download for free a
copy of my last book. Seven

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steps to a life with purpose and
without more. Thank you very much,

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as always and until the next