how to manage money

How to Manage Money for Financial Freedom

If you don’t learn how to manage your money ASAP, you will forever be cursed to live a broke boring life filled with no adventure and no growth.

Ultimately making your life one big fat failure and a waste of time.

Seriously.

The reason why 95% of people in life fail, is because they are stupid with their money.

They spend more than they earn. They buy things they don’t need to impress people they don’t like. And they spend most of their 20’s focusing on partying and getting “lit” instead of building money making machines that pump out dollar bills while they sleep.

This is the harsh truth.

But for all you serious freedom fighters reading this right now you know enough is enough.

So today, we are going to go over how to manage your money.

These are the lessons I learned after studying multi millionaires like T Harv Eker and Tony Robbins on how they manage their wealth for long term wealth instead of short term gains.

Spend 55% of your income on the necessities: rent, food, gas, bills, etc.

The first thing you want to do is make sure what ever paycheck you have coming in, that around 55% of that goes into your necessities fund.

You know, the place you live, the food you eat, the gas that you use to sit through rush hour and drive to work?

All of these are included in the necessity fund.

These are the BARE MINIMUM amount of things that you need to actually survive.

You don’t need those new pair of Nike’s, you don’t need to eat at Chipotle every single day, you don’t need to spend $5 on brokebucks (Starbucks).

All that crap is unimportant when it comes to survival.

So cut it out.

And if you find out that the 55% of your paycheck STILL can’t cover these bare minimum expenses.

Then guess what my friend?

You are spending more than you should.

So what can you do to fix it?

Well for one, maybe you don’t have to live in that fancy apartment of yours. Try downsizing to a cheaper form of shelter while you’re getting your money management skills in place.

Cut out the extra stuff like Netflix or Cable.

Both of which just make you more broke.

And if all else fails..

Find a way to make money online.

What helped me was that I immediately focused on trying to build a business in my spare time, until that money I was making in my spare time was more than what I was making working full time.

And you know what else I did to cut down my costs?

I took it to the next level.

I moved to Thailand.

Why did I do that?

Well because why not?

When you find a way to make money online, you become what is known as “location independent.”

location independent
Hanging out with the first friend that I made when I moved to Asia

Not like most of the people that are stuck bashing their heads on their keyboards at their jobs, wondering why they have to spend 8 hours a day doing mundane and boring tasks.

No..

You become one of those elite entrepreneurs that you read about in the 4 Hour Work Week or The Lazy Man’s Guide to Living the Good Life.

As you focus more on finding ways to decrease your expenses while still enjoying your life.

Another reason why I moved to Thailand is because at the time of writing this, I am only 23 years old. I don’t really need much.

A laptop, an internet, and some snacks and I can survive in any city or any country anywhere in the world.

And you can easily do the same.

Here are some immediate action steps you can do to get you closer to your goal:

  1. Decrease the cost of your lifestyle (beginner)
  2. Find a way to make money online (intermediate)
  3. Live in a country where the dollar or euro is much stronger (advanced and for the serious freedom fighters out there)

Spend 10% in Long-Term Savings for Spending

Now when you start having more money in your bank account, don’t blow it off on bottle service or a Gucci belt.

Take 10% of the income you are earning, and put it into your savings account.

Did you know the average american has no more than $1000 in their bank account?

What happens if they lose their job?

Oh well hello mom and pops looks like i’m moving back in.

Once you get to the point where you are able to cover your necessities from only 55% of your income, you need to find a way to make sure 10% of that income goes straight into your savings.

How you can do that is to go to your bank and automatically set it up.

Every single month without me doing anything, 10% of my salary goes straight into my savings.

And what do I use these savings for?

That’s my doomsday, illuminati, worse case scenario money that I won’t touch unless I absolutely have to.

Tony Robbins recommend that you have at least 6 to 9 months worth of expenses saved up just in case the economy goes down or you lose your job.

Then you would have 6 to 9 months to figure your life out instead of freaking out by the lack of preparedness.

And if you can’t find a way to save 10% of your income then you are either earning too little or spending too much.

As advised before, try finding a way to either make more money or spend less.

Spend 10% on Play

Now here is the fun part. Most people think that saving money and saving for their retirements is hard because they have to save their entire life before they can have some fun at the ripe old age of 65.

I say screw that.

What is the point of waiting all that time to have some fun when you no longer have the energy to enjoy yourself when that time comes?

Instead of achieving to be happy in your 60’s, try happily achieving towards your goals to financial freedom in your 20’s or 30’s instead.

That means setting up 10% of your income on things that you love doing.

Mike Vestil swimming with the whale sharks in Oslob Cebu Philippines
One of the first adventures on my list: swimming with a whale shark

Life was meant to be filled with crazy action packed adventures with the people you care about. So make sure you fill your life was as many amazing experiences as possible.

Here is what I did with 10% of my income:

If you knew you couldn’t fail. What is the life that you would want to live? What adventures would you go on? Are there certain memories that you want to create?

Make a list.

And whenever 10% of your income can cover one of the things on that list. Don’t be afraid to start blowing that money!

That is what this fund is for.

So you don’t go crazy pinching pennies in your 20’s to live a good life in your 60’s.

Why pick between money or adventure, when you can have both.

And make sure you really go out of your way to write these down. Because if you don’t, you will end up one day 85 years old and on your deathbed regretting all the things you DIDN’T do instead of the things that you actually did.

You only have one life. Don’t waste it.

Spend 10% on Education

Don’t worry, I don’t mean going back to college. Instead, invest part of the money you make into self education.

“Formal education will make you a living, self education will make you a fortune” – Jim Rohn

In order for you to earn more, you need to become more.

And the only way to become more is by studying and modeling the successes of people that are where you want to be in life.

As much as you spend on your play fund, you need to spend just as much on your education fund.

Every single day I read at least 10 pages of a good book. Every single month, I get two audiobooks from Audible that I can listen to when I am walking to the gym.

And whenever this fund gets big enough, you bet your sweet ass that I will be spending that money on the newest course or a live seminar.

In fact, if someone asked me how I was able to go from zero to $1.5 million in 12 months, I tell them straight up that I was not afraid to invest in learning from people that already went through all the failures so that I didn’t have to make the same mistakes.

I value my education fund so much that sometimes I would take some money from the other funds and invest it into my brain. And in the beginning, I even put it on my credit card (not recommended for people that aren’t action takers lol)

I remember the first course I bought, I spent $1400. You think I had the money? Nope.

I remember when Tony Robbins came to my home city, literally 15 minutes down the street from my house, and was doing his Unleash the Power Within Seminar.

I ended up spending several grand just so that my family could help benefit from the mindset shift as well.

Didn’t have that money either.

But eventually, the skills that I learned in the courses that I bought and the live seminars that I attended were able to make me a return in my investment.

The good news for you, is all the stuff I have ever learned, I put it out on here and on my YouTube channel for FREE.

But since it’s free, most of you won’t see the value in the lessons i’m sharing and won’t take action because you were never emotionally invested with your wallet like I was.

I wouldn’t recommend blowing all your savings on courses or events though if you are not 110% committed to taking all out massive action like I was.

What you can easily start out with is an audible account with Amazon.com. The first audio book is free and having a subscription after keeps you committed to constant never ending growth and improvement.

Here are some audio books I recommend:

Here are the books that I would recommend:

And if you really want to take it serious, here is the course I created.

internet lifestyle academy
For those that need that extra push..

I cannot stress just how important investing in your education is.

Before you can successfully OWN a business, you need to first have the ability to OWN your own thoughts and your ideas.

But if you are like most, you have been brainwashed for 18+ years thinking that a job and a college education is the only way to be successful and bring honor to your family (I come from an asian background so yes haha definitely needed to make sure I was always “honorable” lol).

And it all starts by FORGETTING EVERYTHING YOU HAVE EVER LEARNED up till this point and to begin from scratch building a mindset that can make you a profit instead of earn you a wage.

Likewise if you ever have a Tony Robbins, Unleash the Power Within, seminar near your city, I would recommend to get your butt there by whatever means necessary.

That was the event that changed the game for me.

I go more in detail about the entire experience in my book which you can get here.

Spend 10% on a “Freedom Account”

Around 10% of the money that you have coming in should go into a freedom account.

A freedom account is a fund where the money inside it passively grows thanks to the power of investing.

The awesome thing about freedom funds is that you don’t even need to be a knowledgable investor. You can simply have it set up to automatically take a portion of your income and invest it in index funds every single month.

For those that don’t know, index funds in plain english is you putting money in a fund that invests in the top 500 companies that are publicly traded in the U.S. economy.

So investing in an index fund is investing in the idea that the U.S. should continue to keep on growing.

RECOMMENDED READING: Money Master the Game by Tony Robbins

“By periodically investing in an index fund, for example, the know-nothing investor can actually outperform most investment professionals.” – Warren Buffett

Every single month, take 10% of your earnings and invest it in index funds. You will thank me when your older from this one little tip.

Historically speaking, index funds have been growing consistently from anywhere from 7% to even over 10%.

What that means is if you have $100,000 in an index fund.

If you don’t touch it for a year..

The money you put in would end up growing to $107,000 without moving a muscle.

The amazing thing is with betterment.com (I am not affiliated with them what so ever) they do it all for you.

The goal with this is for it to be huge by the time that you retire so that you don’t have to worry about a 401K or a pension to survive.

And how you ensure its constant growth is by:

  1. Increasing what you earn
  2. Living below your means
  3. Consistently putting 10% of your earnings into it

Spend 5% on Giving

Now as you grow in your income, in your mindset, and in all aspects of your life, it is VITAL that you make sure 5% of your earnings goes to people that are less fortunate than you.

Why is that?

As amazing an entrepreneurship is, sometimes its hard to find happiness in your successes because you are always too busy focusing on the grind.

What I mean by that is all business becomes is:

  1. You setting a financial goal (ex. $10K in one month)
  2. You hitting that financial goal
  3. Afterwards, you feel happiness for like 5 seconds
  4. Then you set a higher financial goal
  5. And then you repeat the process until you die

The entire time, you are gaining success but you never feel that feeling of fulfillment. And a life without fulfillment is the ULTIMATE FAILURE.

At the end of the day, how you can measure your life is not by the money that you keep, but by the impact that you have left behind.

I didn’t understand this until one day I ended up volunteering in a small village in Peru.

My cousin convinced me to go because we would get to see Machu Picchu. So without even thinking I booked my ticket and went.

Now what my cousin didn’t tell me was Machu Picchu was only going to be for one day.

I ended up spending the rest of the other days in Peru helping rebuild an old school.

I was pissed.

Are you serious? I just dropped $2K just so that I can go and fix a school?

For the next couple of days, there I was, in the beating south american heat as the sun was burning a hole in the back of my neck.

I could have been checking Facebook ads stats or doing competitive research.

But instead..

I had to manually over turn an entire field with nothing but a pick axe so that the school could build a garden.

For the next 4 days, I inefficiently hacked at the ground until all the soil was overturned.

The work was agonizing. My entire body was sore, my hands were severely callused, and my neck was burnt from the direct contact from the sun.

After the last day of the long brutal work, I wiped the sweat off my brow and took a big swig of water.
Then out of nowhere music starts playing and I was overtaken by a sea of children. There was so many of them I lost count.

But as I looked around, I noticed that some of these kids had down syndrome, others had hearing problems, and some couldn’t even see…

It turned out that the school we were helping to rebuild was for kids with special needs.

Mike Vestil Giving Back in Peru
These kids taught me more about happiness than any mentor ever possibly could

That entire day we all put away our tools and just played with the kids.

We sang, we played, and we had epic dance battles. As I looked into all these kids eyes, I noticed that they were all happy.

And that is when it hit me.

I was living a privileged life, I travel the world, I party in Vegas whenever I want to, and I have a business to fuel my dream lifestyle for me.

But looking at these kids eyes, I knew that they were happier than I was.

I was so busy stressing on expanding my business and growing that I failed to appreciate how far I have already gotten.
I was beating myself up because I was only giving myself the ability to be happy once I achieved a specific monetary goal.

But you know what I realized?

You will NEVER be happy if you focus on just earning money.

A lot of students always tell me “Mike, I will only be happy when I make $100 a day”.

No, you won’t.

You will NEVER be happy if you are waiting to achieve happiness as a goal.

When you spend 5% of your income and use it to give back to people that are less fortunate than you, people that have no money, have no ability to see or to hear, are homeless, or kids with disabilities…

You realize that a lot of these people have nothing, yet they still are happy.

And if they were able to be happy, why can’t you?

You may not be as successful as you want to be yet.

But are you a lot further a long than when you first started?

Taking the time to reach out to people that have less than you gives you a new perspective in life and allows you to take into account what is really important.

And if you can continue to that, not only will you be able to learn how to manage your money for financial freedom while still having fun, you will be able to live a life thats filled with fulfillment.

Until next time,

Your fellow freedom fighter

Mike Vestil

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