Personal Finances — Manage your Money and your Financial Freedom | Filipa Canelas | Skillshare

Personal Finances — Manage your Money and your Financial Freedom

Filipa Canelas, Productivity Addict & Knowledge Seeker

Personal Finances — Manage your Money and your Financial Freedom

Filipa Canelas, Productivity Addict & Knowledge Seeker

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15 Lessons (1h 12m)
    • 1. Introduction

      6:07
    • 2. The Learning Approach

      3:27
    • 3. Discover — Set Goals

      6:10
    • 4. Discover — Develop a Plan

      3:51
    • 5. Discover - Align your actions with your goals

      2:30
    • 6. Net Worth — The Realization

      3:41
    • 7. Net Worth — The Formula to Understand

      3:11
    • 8. Net Worth — Diversify Income Streams

      12:38
    • 9. Net Worth — Reduce Expenses

      3:34
    • 10. Automate — The Process

      4:56
    • 11. Automate — Revenues Allocation

      4:51
    • 12. Automate — Select Goals

      2:20
    • 13. Automate — Set up

      2:34
    • 14. Prepare — the Expected & Unexpected

      8:29
    • 15. Wrap Up

      3:28
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About This Class

Fundamentals of Financial Freedom and Personal Finances 

I used to count every penny, think of every expense, and end the month without anything left to invest. Fortunately, with the mastery of different principles, practices, and the adoption of a new mindset, the process is complete upside down. I always invest, and I don't have to count every penny nor think about the expenses, as I know exactly if I can or can't make them. It's way less stressful and much more empowering.

If you want to learn how you can have your personal finances in control and take a step towards your financial freedom, enroll in this course! 

The course is divided into 4 modules:
1. Discover — set ambitious financial goals, develop a plan, and achieve your dreamy life. 
2. Increase your Net Worth — a simple framework to help you take charge of your personal finances and increase the amount you save each month. You will learn how to increase your revenues and decrease your expenses.
3. Automate your Finances — create a system to automate your outflows and maximize the long-term impact of your financial decisions.
4. Prepare — preparing for the future and guarantee that you are prepared to face uncertainty with some security and don't make dumb decisions that end up costing a lot of money.

Each module builds upon the last one, so I highly encourage you to watch the videos sequentially.

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Imagine a life where you spend less than 60 minutes every month managing your bills, retirement, insurance, investments, debt, and so on. Better than this: imagine a scenario where you don't need to worry daily about where your money is going and how much is left. A scenario where your finances don't make you anxious, but instead, give you freedom. Freedom to decide where and how you want to spend your own money, freedom to travel for 1 month, investing regularly, buying a luxurious piano, or a fancy coffee machine.

Most people believe this scenario is possible to achieve... when you are really rich, and make so much you don't ever have to worry about spending. I used to think the same too... Until I decided to take charge of my own personal finances and learn exactly what I needed to do to live a pretty good life and afford some of the luxuries I value, without being rich.

What you will find here is a set of principles that will help you to reach your financial goals, independently of your location, current revenues, and profession. If this what you are looking for, then enroll!

See you inside!

Meet Your Teacher

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Filipa Canelas

Productivity Addict & Knowledge Seeker

Teacher

 

Hi, I'm Filipa Canelas! I'm a blogger, online course creator, and coach.

Over 40,000 people consume my material and learn how to live a Productive Life. This comes in the form of mastering your focus, hacking the learning process, starting successful habits or achieving your goals.

Contributing to a world where successful people are no occasional miracle.
That's my purpose.

If you want to read more about me, head over to my blog: www.filipacanelas.com 

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Transcripts

1. Introduction: Imagine a scenario where you spend less than 60 minutes managing your budget, your investments, your debt, your savings accounts, and your insurance better than this. Imagine a scenario where you don't need to constantly worry about where your money is going every month. A scenario, reared your finances in your money, don't give you anxiety, but instead give you freedom, freedom to decide where to travel to, freedom to invest freedom to why a luxury car, whatever you decide or whatever it luxury means for you. Most people believe this scenario is possible to achieve when you are really rich. And only when you are rich is when you can't afford it rich things or having a luxurious lifestyle. I used to think the same way to until I decided to take charge of my finances and really understand what I needed to do to be able to afford some of the luxuries I value without being rich. First, hi, I'm Phillipa. I'm an online course creator, a blogger, and I'm fascinated by learning skills that can enhance my life in different ways. Personal finances was one of those skills that changed the game for me. And even though I've got a bachelor's degree in business and I'm finishing my master's degree in management. This kills I actually had to learn for myself and do whatever I could to chick truck to take charge of my personal finances and tried to find my financial independence. I used to count every penny left to see how much I had in the end of the month to dedicate to my investments. Fortunately, with the adoption of certain principles by learning with a lot of experts and by failing along the way, I learned exactly how to turn the process upside down. I always invest no matter what and I don't need to be counting every penny every month because I know exactly how much I have for each category. How much I'm willing to spend seriously, this is way less stressful in way more empowering. And I really want you to have the same thing. So if you want to learn how to take charge of your personal finances and take a step on your financial freedom. I really think you should continue watching this class. This course is divided in four modules. The first module, this cover, is all about your own goals and setting your ambitions and also developing a plan to achieve those in the second module, increase your net worth. You will learn a very simple framework that can change the game for you. And you will learn how to make more money to save more and also to increase your net worth because that's how it works. In the third module, you will learn how to automate your financial decisions so you don't need to constantly worry where your money is going. And this will allow you to maximize your freedom in the long run. The fourth module, prepare, is all about trying to understand what you can do today to be able to deal with future uncertainties that might arise eventually by preparing ahead, you make sure you don't make dumb decisions in the future because you didn't have the resources to deal with those uncertainties each module builds upon each other. So I highly recommend you to watch the course sequentially before jumping into the course, I believe it's crucial to lay down exactly what you can and can't expect from this class. So you know exactly what you should or should not join. First, I will risk to say that this is not a conventional class about finances. And I made it exactly to be unconventional because I took a lot of finance classes and I never learned a thing about my own finances and how I could start now preparing for the future in trying to achieve financial independence, I believe most people don't need to learn dozens of different concepts. They don't need to master excel sheets, and they surely don't need to predict the market to make good financial decisions for themselves. Because of this belief, I will not cover concepts such as IRI bore or inflation or paybacks, None. Instead, I'm going to focus on the right principles that will give you an advantage over the future. And you will know exactly what to do today, to prepare for what is coming, and most importantly, to prepare for your own financial freedom. The second thing that you should be aware is, I'm never going to say you should buy discard faith in x number of years in the Y bank, the z percent interest rate. I also don't know if you plan to retire at 30 or if you are already 50 because of that, I will never tell you what you should do. Otherwise, I wouldn't be giving wrong advice 99% of the times. Instead, I will give you something that I believed to be 100% more valuable. The framework and tools you need to make better financial decisions for yourself according to your own situation, generalizing is very dangerous, especially when it comes to your own money into your own finances. And I get very skeptical when I see people giving very specific advice when they have no idea to whom they are giving the advice too. And finally, the third you should be aware of is that discourse what go into tax brackets or 401K? Because those details are very specific to the country, you are leaving it. So for example, I'm living in Portugal, so the 401K has no meaning here. So it wouldn't make much sense to make this course specific to a specific country. Instead, what you will find here are the principles and frameworks that will allow you to make better financial decisions independently of your location, your current revenues, or your job is this is what you're looking for. Then just continue watching. And I see you went site. 2. The Learning Approach: Before mentioning any information related with the content itself, I believe it is crucial to understand what is required from your mindset to approach this class. In my opinion, the right mindset is the growth mindsets. In the words of Carl Dweck, like those with the growth mindset, you believe you can develop yourself, then you are open to accurate information about your current abilities. Even if it's unflattering. What's more, if you are oriented toward learning, you need accurate information about your Curtin abilities in order to learn effectively. It was by cultivating and growth mindset that I was able to learn. A lot of what I'm going to teach. That is, even though I've got a business degree, most of what I learned about my own personal finances was done outside the classroom. And so I have to go deep in different ways and methods and read a lot of books and take online courses to learn exactly what it needed, what I needed to do in order to take charge of my finances. All of this is an iterative process where you figure things out along the way. And that's what I did. I discarded some things, I kept others. And I think I achieved a pretty good result in a very short period of time. And of course, this is only the beginning, but this can only be done when you have the growth mindset and you are open to learn new things along the way, learning about finances, money, investments is not different from learning any other skill like maths or playing an instrument. The problem is when we try to find information related with money, It's much more difficult in, this is not taught in schools, and it's not so easy to find someone that can teach you openly what you can learn about finances. Money is still a taboo in when it comes to personal finances. People tried to make it seem they have everything, figured it out when they don't. And so they are not open to learn new information because that requires some initial discomfort, I would say. But you are here, you're dedicating your time, your energy to learning something new in so I highly recommend you to keep your growth mindset along the way, because that will be what allow you to learn exactly what is going to be taught. And so you will be able to implement these principles in your own life. So grab a notebook or open a digital file and start taking notes and taking this knowledge to the rest of your life. In this class, no time will be dedicated to covering concepts that you will never apply in your life. But instead, I'll try to focus on exactly what matters the most. Because remember, the 80-20 rule still applies here. 80% of your results come from 20% of your efforts. And so 80% of your ability to better manage your finances will come from 20% of the effort you put into it. And hopefully this course will make those 20% because you will learn a lot about the whole process in what you can do to improve your finances in the long run. I hope you enjoyed the journey as much as I do. So move on to the next module, where you will learn how to set goals and to develop a plan to achieve them. See you there. 3. Discover — Set Goals: When I was developing the curriculum for this class, I almost skipped this module. The reason being, it's very easy to forget that every goal we accomplish starts with a vision. A vision that might be present in your everyday life, or it might be hidden in the back of your mind. But the reality is that most of the goals I achieved starts with a vision, life goals, personal goals, career goals, or financial goals. For this reason, this module actually had to make part of this class because you need to dream height in order to achieve high two. So in this module, we're going to cover three main principles that are crucial in order to find your ambition, to achieve that ambition, and to feel great about yourself. The first principle is all about thinking big and setting ambitious goals to second step requires you to understand that financial freedom is a long-term gain. And so you will learn how to develop a plan. And finally, the third step. Now that you have your goals, you have your plan. You need to align your actions with the vision that you set. And this is the only way you can actually accomplish the goals you envision for yourself. So let's move on to the first principle, which is all about thinking big and setting ambitious goals. Every time I sit down to set new goals, I have two main things in mind. The first one is think big and the second is think even bigger. Your reason being that it's very easy to think small because ambitious goals don't seem easily attainable. It's carried to set a really ambitious goal because failure seems the most probable outcome. I totally understand this. And I also experienced some fear when I'm setting way too ambitious goals because it just seems I'm going to fail no matter what, it would be way much easier to just stick to smart goals, which stands for specific, measurable, attainable, realistic, and time bound. And of course, that's smart goals are very important when you are in your daily life and you want to make every day progress towards your goals. Only after setting very ambitious goals and letting yourself dream about a more exciting and interesting future for yourself that you are designed and thought through. So the whole deal of this exercise is to think big and imagined an incredible future for yourself in terms of your finances. And you can also include ordered categories if you wish. I usually say, if you know exactly how to achieve that goal, it's not an ambitious goal. You have to go beyond your current capabilities in your current expectations. If nobody's saying you are crazy, you need to think bigger. Goals must be challenging because it's the only way when you are going to grow your current capabilities and improve yourself along the process, even if you don't achieve the final goal, as Belle-V. Davis said, Don't be afraid of the space between your dreams and reality. If you can dream it, you can make it so. So the exercise consists on sitting down, grabbing and notebook and start writing all the goals you want to achieve, the very ambitious in dream big. Here are some of the questions that you can use in order to foster your ambitious thoughts. What do you want to have? Materially speaking? Where do you want to travel to? What do you want to learn? At watch H? Do you want to retire? How much do you want to have when you retire? Because that's important. Where do you want to live? How much do you want to invest? What business do you want to start with answering this questions? Make sure you are very detailed and specific. So instead of saying, I want to have a house in New York, be very specific. What part of New York how many rooms is your house going to have? Do you have an office? Do you want to have a library, a pool? Be very specific in let your mind wander. Exercise these mind opening because most of the times we are restricting our patterns of thought to our current reality. And so we don't allow ourselves to dream and to mentioned better possibilities just so you understand the importance of setting goals. A study was done by Harvard, which basically proved the correlation between setting goals and your financial situation in the future. One class was asked if they had set any goal and if they had developed a plan for its attainment, 80% of the entire class had no goals at all, so they did not set any goal. 13% of the class had set written goals, but had no concrete plan. And only 3% of the class had both written goals and concrete plants. And this could be you after taking this module ten years later. So the actually returned to the initial group to see how were they doing in 30% of the class who set written goals and had no plan. We're making twice as much as 80% of the class which had no rules at all. But for those 3% that had set the goals and had the plan, they were making ten times more than 97% of the class. I don't know if the numbers are 100% accurate, but the kicker is set goals and develop a plan for their achievement. And you will see your financial situation improving significantly, which is basically what we are doing in this module. Now that you have set a very ambitious goals, you know, it's time to set a plan to actually achieve those goals because you can't move on if you don't have a plan. So the next principle is all about developing a plan and understanding that financial freedom is a long-term game. 4. Discover — Develop a Plan: In the last video, you learned how to set ambitious goals in. Understand that every achievement starts with a vision and that's what you did. But now we need to understand that financial freedom is a long-term gain. And so we need to develop a plan in order to achieve our goals. First, I don't expect to win the lottery, just like I don't expect to make my fortune just by investing in one company. The reason being it's too risky and when we take some percentages, it's also not probable at all. So it's a far better decision to stick to monthly or yearly goals and make progress every single year towards our path to financial freedom. Instead of just waiting that someday we might have some incredible investment that will give us all the freedom we need. Accumulating wealth is a habit and dislike. Any other habit. It requires discipline. You don't expect to go to the gym a few times and live with a six spec. So you also don't expect to make a few investments and leave with the fortunes in the next few months. This happens to you. That's amazing, but to most of us, that will never happen. And because of it, we need to do things today that will move us forward towards what we want to achieve. So let's say one of your ambitious goals was to save $10 thousand this year. That's a great goal. But now we need to understand what are you going to do this month in order to make your progress towards that goal? If you don't set a plan and decide exactly which actions you're taking, your goal. My never leave the paper. Law of Attraction might work, but don't expect to save $10 thousand if you spend every penny you receive. So here's what I would do. I would grab my notebook and I would right, so the goal is to save $10 thousand this year. How much do I need to save every month in order to accomplish the college? Do I need to make each month to save that amount? And how much do I need to decrease my expenses to also invest that amount monthly, which will then lead to the 10 thousand yearly investment. In one key thing is never assume that the process will be perfect and everything will go according to the plan. Most of the times, it won't bite consistently asking questions like, How can I achieve this goal? What can I do today to make progress towards it? I want step closer to the end goal and I'm much better off if I just did not write any plant. Basically, when you develop a plan, you're challenging your brain to come up with answers. And your brain will actively seek out ways to actually make your gold come true. There is no perfect roadmap to achieving financial freedom. But at least you have a Mac. And that's Map will make you for sure closer to your goal then if you just didn't have any, any direction, if you want to write a book this year, you know, we need to write every day a couple of 100 of words. The same thing happens when you want to save money. You need to save money every month, right? So make sure you decide exactly what are going to be your next actions to make progress towards your goal. Don't just write the goal and never look at it. Be very mindful of what you want to achieve in what you're doing currently to make progress. So put your goal on your calendar, on your desk, on your wall so you never forget it and you know exactly what you were trying to achieve. In the next video, you're going to learn the third principle of this module, which is all about aligning your actions with your goals. And this is exactly what you need to accomplish your ambitious goals. 5. Discover - Align your actions with your goals: In this first module, we started by setting very ambitious goals. We moved on to developing a plan to achieving them. And now we need to make sure we actually do the things required to achieve the goals. That is, we actually fulfill what was developed in the plan we created. And this is all about aligning your actions with your goals. To explain it in a very simple way, I will use an example. If your goal is to save $10 thousand decir, You can start by saving $1 today. This seems ridiculous and surely each won't be enough to accomplish your goal, but the key aspect is to match your current actions, your future identity, that is, the identity you need to have in order to accomplish the goal. And if you are a saver, what does a saver do? It saves money. And so because you're building your identity with every action you take, you're making progress towards your goal, even if it's very, very small, for sure, this does not seem like a very important principle for generating wealth, being financially free, but it actually might be one of the reasons why you are failing your goals when your actions don't match the court ambitions you have, you experienced dissonance. And we, as humans, we don't want to experience dissonance because it brings discomfort. And so our brains will try to come up with a bunch of excuses to reduce the discomfort and reduce the dissonance. And so your brain will just justify your actions even if they are not according to your goals, which basically will just keep you even Fargo further away from what you said to which he. So if you really want to achieve your goals, make sure your actions are aligned with the ambitious goal. Only by doing it, you can experience joy and feel free and honestly feel good about yourself because you weren't doing the right thing. So from my personal experience, aligning your actions, we drew goals is crucial to achieve any financial goal, eSet, and these were the 3 first steps of this first module discovered, set ambitious goals, develop a plan for achievement and align your actions with your goals. And the next module, I'll cover different ways to increase your network. First by understanding what networth actually means, and then understanding different ways to increase your revenues and decrease your expenses. I see you there. 6. Net Worth — The Realization: In the previous module, you learned how to set goals and to develop a plan to actually achieve them into second module, increase your net worth. You will learn when simple framework that will help you to increase your network and to accomplish your goals seriously, this is a very simple framework that can change the way you see wealth forever. I would say this is one of the reasons why I was able to double my investments one year to another without actually receiving much more money. Most importantly, without sacrificing on the things I really value in prioritise, I call this framework the net worth realization. Because honestly it's nothing more than understanding the two paths you can take to increase your wealth and to be more financially free. But first, let's understand what net worth actually meet from an accounting perspective, networks means assets minus liabilities. That is, the things you have minus the debt you had to incur in order to have those things. So let's say you just bought a $50 thousand car. But if you had to encoding $13 thousand debt, you actually own $20 thousand. So that would be your net worth at the moment. So perceiving people with a very expensive car or an ink incredible mention has rich, might be completely distorted because they might have as much debt as pretty much the value of the asset today acquired. So, and this is the first about the networth realization, which is, it's not about the things you think you own, but more about the things you actually own. And of course, debt plays a big role in reducing your net worth because your debt is the assets of another person or institution. This has to be the first about the net worths realization because most people don't get it right. You know, having a card just to show off is probably doing more harm than good. If you're buying a car that is way above your means, you're basically contributing to the decrease of your net worth, especially because cars lose value very quickly. And if you're incurring a lot of that to buy a car, you can't afford, you're basically losing money. And of course, the first step of increasing your net worth or increasing your wealth is understanding would actually eat means, and hopefully you did it already. And if you think about it, your net worth or your wealth is basically decompilation of what you save every month. That is, the accumulation of your monthly financial decisions. Your net worth increases when every month, what do you spend is less than what you earn, which basically means that it does not matter if you make $20 thousand every month or just when $1000 every month, net worth might be the same if you're spending way more than you make. What this shows is that how much you make every month, he's not so determinant of how much wealth you have accumulated, because you might receive a lot. But if you also spend a lot, your wealth might be the same as someone who receives health than you do. So remember, it's not how much you make, but more about how much you keep. It surely helps to make more money. But if you're not having any leftovers, it doesn't really matter. 7. Net Worth — The Formula to Understand: Now that you understood what networth means, the danger of mistaking what's your own by debt, and how to increase your net worth either by making more money or spending less money. You are ready to basically start crafting your path to financial freedom. Instead of thinking in the long-term weight, that is, instead of thinking of your overall wealth, let's just think on a monthly basis, what can you do every month to increase your net worth? That are two ways which are not mutually exclusive to increase your monthly net worth. You either make more money or it, You spend less money, or you can do both. You can increase your revenues and actually spend less money. So as you see, both variables interact in opposite ways. Or when one changes, the other is distinct or should be the same. But what happens is most people, when they have, when variable changing in one way or the other one also changes in the same way. That is, when most people increase their revenues, their expenses increased by the same amount. This is why most people live paycheck to paycheck because when their income increases, so duly so do their expenses and so nothing changes in the long-term. It's very common to hear if only I could make more money. But the truth is most people increase their revenues over their life, The problem is so do their expenses. So remember, it's not much about how much you make more, how much you keep. So don't think that making more money is the solution to all your problems. If every time you make more money, you move to a more expensive apartment or if you buy a more expensive car. I'm not saying there's anything wrong with those choices because there is not one of your goals. That's great as long as it's your priority and you are a managing it consciously. And you are also thinking about your future and how much you want to make in the future by saving for your future self. Because if your inflows increase, but so do your outflows, your pet financial freedom is not closer. There is actually a definition for this called the lifestyle inflation. According to investopedia, this means lifestyle deflation refers to an increase in spending when an individual's income goes up. Lifestyle inflation sent to become greater every time an individual guests to race and can make it difficult to get out of debt, save for retirement, or meets other big picture financial goal. Lifestyle inflation is what causes people to get stuck in a cycle of living paycheck to paycheck, where they have just enough money to pay the bills every month. So make the commitment now to not be in this trap of lifestyle inflation. If all you take from this class is that you should spend less than you make, then my goal is already accomplished because that's pretty much what you need to start crafting your path to financial freedom. 8. Net Worth — Diversify Income Streams: Basically what you are now learning how to diversify your income streams. That is, how can you make more money every month? And I'm going to give you a couple of ideas and you can pick some, pick one, pick all. Start by yourself trying to increase your revenues and does having more potential to save more for the future and accomplish your goals, the decision is always yours, but I think it's very important to expand our mind to the possibilities of making more money and having other streams of income rather than, for example, a nine to five job. So the first one is being a freelancer. Being a freelancer is an incredible way to make money and experienced the freedom of working from any place in the world. I've done freelance services in the past and it's a great way to make money and actually joining, joining it with some of your passions. So if you love to do graphic design, you can just offer your services, do something you enjoy while making money for it. Now, I believe that our two main levels for doing freelance. The first-level of doing freelance is all about doing things that don't require much skill. So you don't actually need to invest much time developing that skill. But of course, at the same time, they are Paint less than other skillful jobs in this category, I can think of basically being a virtual assistant where you do some Excel sheets for a person or you do kinda like this maintenance tasks that need to get done, but they don't require much skill or much thought. Platforms like Fiverr.com aren't a great way to find this type of work. Of course, they are much lower paid it in other types of jobs. And so the second level of doing freelance is all about more complex services that actually require a certain level of skill. Graphic design, copywriting, programming of video editing, engineering. So if you have already one of these skills, you can start offering it in make money because these are very valuable skills that people are willing to pay for. What I highly recommend you to do is to start building a portfolio where you show off your skills so people actually can trust your work and see that you have the experience to perform the job. But if you don't have any of these skills that our in-demand, you can actually take some time to develop one that you feel like you're going to like it. Learning a new skill. He's a very rewarding process and it's very, very fun and challenging. I learned how to edit videos when I was 12 years old on YouTube. And so you can actually learn the basis of a skill that most people don't have, and then you can sell your services. So if you don't have any skill right now, you can always develop it and it's a very fun process. Again, you can use Fiverr or Upwork to sell your services, but there's also another way of doing it and most people don't even think about it. It's all about telling your friends and your family or on your Instagram account that you're offering that service. And if people actually know someone who needs the service or themselves, they need it, they will hire you or they will talk to you. So don't forget your personal connections and don't just go straight to Fiverr.com or Upwork. The second way you can use to increase your revenues is all about selling things into thing is, you can sell digital goods, are physical goods. And you can sell goods online or offline. So you have a huge variety of things to sell and basically waste to fulfill your own designers in your own armies. So lets say you love to paint, and even though you had your nine to five job, you still have time to do some paintings. You can always sell your stuff on Instagram or Etsy.com or selling to a friend, you always have that option and you can increase your revenues by basically making your skills profitable or your hobbies profitable. Or maybe you just know a lot about minimalism or you know a lot about decoration. You can sell a digital course, or you can sell an e-book or line in. You can do this by the comfort of your home and still make money and capitalize on your skills. The main advantage of selling digital goods is that you'll create it once and then you can sell it to multiple times. So of course, there's advantages, but if you'd like to do things by hand, you can also do it and you still have that option if you don't like to do any of this, that is, if you don't want to sell your physical goods nor any of your digital goods, you can always sell other people's stuff. So if you have good marketing skills, you can always grab products that are already around and they exist and you can sell them and make a commission. And in this way of selling did off three ways of doing it. The first way is kind of like the whole school. So if you have a friend that actually paints really well, you can sell the artwork of that friend and receive a commission for whatever you sell. The second way is drop shipping and would drop shipping. You can sell things you never saw before. So you can create a website in, for example, cell digital watches. And you create a very fancy website. And every time someone purchases the digital watch from your website, you ordered the watch from a supplier and the supplier ships the item directly to the house of the person who ordered it. It's great because you are the one deciding the price. And Danny, you buy it from a supplier. And finally, the third way to sell things you don't own is through affiliate links. So if you have a website about digital cameras, because you are a photographer and you really love to do reviews. You can always use affiliate links in your blog. And so every time someone clicks a link in weizza product, you'll receive a commission. Even though the commissions are very low, you don't actually have much work of putting the affiliate links in your website. It's kinda like extra money you might make without having much trouble at all. The third way you can use to make more money is getting another job. Basically, you can get a part-time on top of your full-time job if you wish. And maybe this is not the best option if you already have a lot of work in a lot of things to deal with. Some people consider this option and they liked it and they are happy about it. But of course I leave it up to you to decide if this is the best way or not to make money. Finally, the fourth way of making more money is something a bit different than the other suggested waste. It's all about increasing your value. Working either for accompany or doing freelance services is all about offering your value in return of the monetary compensation. So you're offering a service because someone is looking for what you're offering and so you're getting paid for it. That is, you're being paid because you're offering Valley to someone who values what you're offering following this rationale, the more value you offer, the more money you're able to receive for your services. So in fact, it's not much about how many hours you work, but more about how much value you are able to produce or to offer in those hours. What I really wanted to challenge you to do into open your mind is how much value can you offer more in the current hours you're working? That is, how can you increase your value? Maybe you could learn another skill that in combination with the skills you already have, would make your work much more valuable and people would be willing to pay more for what you do. Let's say you write articles for a company and you are really good at your job. What if you learned copywriting? What if now you can basically make the Articles your company is doing more persuasive and so they could even get more sales because of your skill, probably they will be willing to pay you more because you are now more valuable to them. Another example, let's say you are a video editor. What if you learn how to animate videos? Maybe you could actually sell more and be more valuable to the people you are providing your services to. These combination of skills, AS suggested, are quite obvious, right? Writing with copywriting and editing would video animation. But what if you offered completely different skills that though the I'm not actually seen as complimentary, they can actually become very valuable because of it. Perhaps many video editors do know how to make animations, but what's most video editors probably don't know is copywriting. So one, if you produce a video for the client, you create animations, you create the video, and then you can actually improve the copy of the video and make it much more persuasive. That's very valuable work and people are willing to pay for it for sure, I could be here all day giving you a bunch of ideas, have how to complement skills, but you probably know more about it in your own field of interests. So do a brainstorming session and think of all the skills you could learn that are complimentary to watch you are offering right now. That could make to receive more money in the same amount of time. There's a Portuguese entrepreneur called for the liquid cash through. And he taught a very interesting approach to increasing your value when you're offering your services. And it all comes down to four pillars. The first pillar is all about the offering. The second about getting the client, the third about your resources, and finally the fourth about productivity. Starting with the offer, basically just ask yourself questions that will make your brain think big and think of what you can learn to increase your value. What's problems can you solve? What are other people looking for? What opportunities can you create for a new client? It's when you are solving problems for your clients or creating new opportunities for them, that you actually make money because you're doing something, you're providing them value. And so the more you work on your subskills in your ability to generate value, the more money you will able to receive for the work you provide. The second step was about getting the clients. So think of all the different ways you can have more clients or better, how to increase the amount that your current clients pay. You also think, how can you grab the attention of the client, but can you make them recommend you to other friends or people they know? And how can you show confidence and ability to do the job? The third step is all about resources. So what are the resources both internally and externally, that you can provide to your clients? Terms of internal resources, you can think your skills in external resources. There's a lot you can cover, like having a camera, having a computer, having a studio, everything counts. And finally, the fourth pillar is all about productivity. How can you offer more value in less time? How can you increase your work efficiency? How can you be better basically? And if you want to increase your productivity, I highly recommend you to check. So of course, as I have on the subject, because they can really help you to boost your work. And this were the four pillars to make your offer more attractive into received more from what you provide. That is, improve your offer. Learn strategies to get the client, increase your resources and have more productivity. The key lesson from this video is this, always be looking for ways to increase your value, which will increase your revenues. And sometimes you don't need to do more work. Sometimes you just need to be creative in combined different skills you already have, or skills you might want to acquire in order to increase your value and be very, very rare in the market because you're providing something completely unique. In the next lesson, I'll teach you a few different ways to decrease your expenses and does having the potential to increase your net worth. 9. Net Worth — Reduce Expenses: Now that you are equipped with different methods to increase your revenues, it's time to think about your expenses and ways to decrease them every month. When people talk about decreasing their expenses, I believe they are much more picky than when they are talking about increasing their revenues. Seriously, would you worry a lot about getting another revenue stream that makes you $7 additionally, every month, probably not. You wouldn't care about extra $7 every month. So why do people get so picky with decreasing is $7 experts short. If you're wanting to tell situation, maybe those $7 actually mean a lot to you. But if that's not particularly your case, y being so picky with $7, I basically preferred to be more accountable to the 80-20 rule, which basically claims that 80% of your success comes from 20% of your efforts. And the same applies to your expenses. 80% of your monthly expenses come from 20% of the categories that you are spending every month that he's mostly rent, transportation, food, and perhaps education. So instead of focusing on a $5 latte you bought yesterday on Starbucks, why not actually fighting to reduce some of these big expenses like rent and transportation and groceries. If you could reduce 20% of your rent, perhaps by moving location or renting a smaller apartment, you could be saving so much more money without having to worry about the $5 latte. The same goes for transportation. Perhaps shifting from your car to public transportation is a great way to save money and also being good for the planet. As for food, I don't like to focus too much on cutting on groceries because, you know, it's kinda like an essential need. What I mean, he's perhaps bringing food to your work instead of going out every day. But remember, you don't have to cut any of these expenses specially you don't need to cut the ones that actually provide you a lot of value before you going by bus to your work would be basically a decrease of your levels of happiness, then I'm not suggesting you to do that. Basically tried to cut on the things that, you know, you actually don't mind that much. So for me, in my case, I don't mind going by bus, actually enjoyed quite a lot. But on the other hand, I would not want to cut on dinner out too, because I love to go dinner out. So I would actually like to cut on that category, but I would for sure cut on transportation. So what I'm suggesting is evaluate your own preferences and the things that actually give you joy versus the ones that you don't actually mind saving a couple of 100 bucks on it. Now, I believe you are equipped to make the financial decisions for yourself, to increase your networks, that is to increase your wealth. How basically by spending less than you make and you can also increase your revenues or decrease your expenses or both. And you'll always be good to go, specially when you have this in mind. Always make more than you spend in the next module automating your finances, you will learn what to do just one time in order to accomplish your goals every single month without any executes. That module alone, I believe can change your path to financial freedom forever. See you there. 10. Automate — The Process: In the previous module, you learned how to increase your net worth either by making more money or spending less, or even better doing both at the same time. In this module, we will jump right into something. Am fascinated by automation since I started automating some of the financial decisions high head to make every month. Things got into their proper place in a moment and I found myself not worried a single bit about having enough to invest or having enough to why something I really wanted to. I learned this method for automating finances with raw meat seti, the author of, I will teach you to be rich and surely it changed a lot about my own way of managing money. This approach, he's very transformative, specially when you compliment it with what we already did in the previous module of setting goals in developing a plan in order to connect all the dots. Let's bring back when gold badge, for example, you had set in the module one of setting goals. Let's say you really want to join a leadership program that takes place in California in costs $1000. It will happen eight months from now. So you really need to start thinking if you're going to join or not, and if you have money to do so, so you have the goal of going to this leadership program. What's lacking is the plan. What are you going to do in order to save money to go there? You also had another goal of saving $10 thousand this year. If you have not invested as single penny yet, you might look at this school and think it's actually very big and you are not sure how to start. And finally, another goal you set is to have another phone because well, you love to take photos and you kinda want that new nice camera that comes with all those fancy iPhones or smartphones. All of these three goals have different intentions. The first one of the leadership training program is about learning and improving your skills. The second one is all about saving and investing in your future. And finally, the third one is kind of a luxury because you know, you want a new phone. Now, as you might have guessed, this Goals won't leave the paper and unless you do something about it, you probably know it evolves saving money, but how well it worked for you in the past. Were you able to consistently save money for all the goals you set? Were you able to be disciplined and committed to achieve what you set your mind to achieve. How were your plans developed that allow you to reach her goal? How was your performance along the way? Were you able to be very motivated for all the you or were you just saving for the first two or three months and then you gave up? This surely happened to me more than once. I would start saving for something in the first two or three months and, you know, my progress was really good. And then after 34 months, I would completely forget the goal and I would just stop saving for what I actually want it to avoid this from happening. And I can tell you that this completely stopped happening from my life since I started using automation, alteration is all you need to accomplish your rules consistently, specially when you combine it with also what we covered in the second module, which is all about increasing your net worth, which will give you more power to save more money and have more goals accomplished. What exactly means automating your finances? Well, basically, very simply, it just means that whenever it your revenues arrive at your bank account, there's a whole system that will distribute that revenue to different buckets. That is to your rent, your car, to your groceries, or to other expenses, and most importantly, other things that you actually want to save for, like investments, saving accounts, traveling, and uPhone anything. So I divided the process for automating your finances into three steps. So the first step is all about defining what percentage you will be allocated to the different buckets. The second step is all about bringing your goals that you set in the previous module and doing some simple math to understand how much you need to save in order to accomplish them. And finally, the third step is just basically automating the whole system within your bank accounts. Especially if you have a phone with a bank app. We're going to go through these steps together and I'm using examples to help you visualize what you need to get done in your own life. So you can immediately apply this principle to your own life and see some things change very rapidly. 11. Automate — Revenues Allocation: So the first step is all about figuring out the distribution of your money. So let's start by drawing a pipe. This phi represents the amount you earn every month. This pi can either be fixed or variable. That is, if you're a monthly income is fixed, your pie is fixed. If remotely revenues are variable, then your pi of course, will also vary everyone. Either way it does not really matter because you are defining percentages in not specific amounts of money. So independently of how your pie distributes, everything can be kept the same. Now let's divide the pie into three main categories. The first section represents the unavoidable. These are rent, groceries, gas, or public transportation, electricity, health insurance, and Bill's expenses, you can't avoid. Usually this section takes about 50% of the entire pie, but I don't know for sure. This is actually what happens in your own account. So please check your last month transactions in c, exactly how much does it take from your monthly salary, all of these fixed costs that you can't really avoid. The second section of the pie is called the pleasurable. This includes things you don't really need to survive, but you want to have in your life depending on your interests. This can mean clothes and Netflix subscription, movie tickets, restaurants, you name it. Basically this is your category, the one where you will be dedicating money to watch you really love. This section can take 30% of the pie, but you can make it smaller or bigger dependently, of course, if your situation. Finally, the third category is the safe bubble. That is the amount you're going to save every month, either for investments, for a saving account, for a retirement tick count, emergency funds, and so on. This category usually takes 20% and this is also where you're going to fit your own goals. So if you're planning on saving, for example, for a new car, you can use this category to start saving for that goal. Always remember that the percentages I suggested should be adapted to your own situation. For example, I suggest 20% on the saleable bucket, but in my case, I usually do more than 30%, so it totally depends on your situation. Of course, I remember being ten years old and my parents telling me to save the money I received from Christmas. It honestly, it did not seem fun because I wanted to spend the money I received. Well, and I kinda ended up following the advice during my childhood and I would put the money aside that I received on Christmas steel. I never actually liked the idea of saving money because, you know, I could why a noodle or a new camera or whatever I actually like at that time. But a couple of years ago, I actually heard a financial guru putting this thing of saving your money into a completely different perspective that shifted things for me. He said, pay yourself first. Well, paying yourself first actually means is basically setting a percentage where you are saving for the future. That is, you are paying yourself in the future when you save money today to use later. So instead of thinking, I'm saving and I'm basically restricting myself from buying things today. Mike thought now is I'm paying myself in the future. When I'm older, I'll be able to receive into have much more freedom than I would if I would just spend it all today. And the money is always yours, right? It's your savings, it's your money. And I really liked this perspective. Steal. This doesn't mean I don't spend money buying nice things. I just am always aware that every month I'll be saving money for my future self. There's a very popular saying that says, do something today that your future self will thank you for it. And usually investing or saving is always, always, always something you'll be very grateful you did. So after this first step is complete, you should have your pie divided into three main buckets. The unavoidable, the pleasurable, and disables. Again to suggested percentages work 50% for the unavoidable, 30% for the pleasurable, and 20% for the same troubles. But of course you can switch, you can change, you can make things that will give more sense to you and make more sense to your personal situation right now. So make sure you define those percentages now. 12. Automate — Select Goals: The second step of this automation money system is all about picking your goals, which means you're going to grab the goals you set in the first module. And you're going to select three or five goals that you want to really accomplish in debt requires some kind of action from you. So let's pick the leadership program that is happening eight months from now, and it costs $1000. Now, you have two options regarding this school. You can either use the allocation of the pleasurable pi to dedicate a part of that money to this goal. Or you can actually dedicated percentage inside the safe bubbles bucket to save for this leadership program. So let's say according to your monthly revenues, you will lead to save 5% of your revenues every month for the next six months in order to have the $1000 in the end to pay for the training. So basically that's what you do. You find the percentage and then you automate the system in your bank account. So every month, 5% of your monthly revenues will go to this bucket, which corresponds to the savings for the training leadership in California. So let's try another goal. You really want a new smartphone, of course. And you smartphone is probably not inside the unavoidable because your current smartphones steel works pretty well. So basically you can include it in the pleasurable bucket. And now look at your pleasurable bucket and see if you actually want to spend all of that percentage within you phone. Or if you just want to save it in a couple of months to buy the phone. So this could mean dedicating 10% of your pleasurable percentage to saving for the new iPhone and doing it for like three or five months in order to save the money. In the end, there's no formula that will tell you that you should spend X in this school, in y, in that one. It's your own life and you should be the ones figuring out what are your priorities in how much are you willing to spend in order to achieve the goal. And of course, I would always say to spend more money in things that will make you improve like a leadership training program. 13. Automate — Set up: Finally, the third step of the process is all about setting this up in your bank app. Most banks offer a digital Act that allow you to distribute the money into different buckets. It's kinda like creating a virtual accounts, but it's inside your own accounts. So you grab a percentage of your main accounts and distributed to different buckets in case your bank does not have a nap or it does not allow this function. You can when either change your bank or to just do this by hand. And you don't need to freak out because if you're doing this by hand, it should not take you more than ten minutes every month. So if you really want to take charge of your personal finances, I really advise you to take this and put it into practice right now. And again, if you're a bank does not offer the, this option, you can do it by hand and each will be pretty quickly. Either way. The purpose of having a system like this is that you're taking a long term approach to accomplishing your goals, instead of waiting until the end of the month to see how much you have, how much you have left to save for your investments. You're making that decision beforehand. So you did decide how much should be allocating to your IT investments every month. And so no matter what happens, that percentage will be allocated to your investments. If you're never see the money, you don't get to spend it. It's dead simple. Before having this automated system implemented, I would still invest in my investments against the difference was that consistency when I did it. So before having the system, sometimes I would transfer some money that was left to my investments account. But now that's not an option every time it will go to my investments accounts no matter what. And the differences are significant Since I started using this automation, the system, because the amount I invested was much larger than in previous years and the revenues did not change much. So basically, this really pays off in the long run. And the beauty of the system is that it takes all the burden from your shoulders because you don't need to be making every month and you decision about how much you're going to spend, how much you're going to save. I really hope you take advantage of this method because it really, really changed things for you. The next module is all about preparing for the future and making sure you have the necessary resources to deal with some uncertainty that will certainly arise. I see you there. 14. Prepare — the Expected & Unexpected: In the previous module, you learned how to automate your finances and make progress towards your goals either by saving for investments, for your retirement, for a new phone or for holidays. Now that you have goals, you have a plan for achieving them. You've set a system to automate your decisions. And you also understood what it takes to increase your networth. There's still something that needs to be covered, which is preparation. This is all about preparing for future expenses. That will happen no matter what. It's not about predicting stocks and market fluctuation. A smarter about understanding what things you might need to cover on the future and how can you actually prepare for them wisely, the more prepared you are, the better financial decisions you'll be able to making the long run, if you don't have a buffer of money, what happens if you suddenly lose your job seriously in now with the pandemic, this happened to a lot of people and some of them were put into very tough financial situations because do we're not preparing for it, but they actually did something in the past to prepare for it. There would be, of course, much better off and they wouldn't be so constrained by what happened to them. We prepare for what might happen in the future, will be much more able to deal wisely with those situations, even if they are still tough on us. Of course, you will not ever be able to predict what's happening when a 100% of the times. But that's why I called it to prepare in order to predict. And so in order to help you prepare for the future, I believe that our two categories of expenses you need to focus on. You have the expected expenses, indeed, unexpected expenses, and both require different ways of dealing with them in regards to the expected expenses. This includes things like Christmas in holiday gifts, repairing home appliances, replacing your phone, education in medical expenses. Some people fit this expenses in the unexpected expenses. But honestly, if we are honest with ourselves, we know that someday we'll need some medical treatments and we need money for it. So it's not so unexpected. I believe it's far better to think ahead than then be surprised by something that should not be a surprise. And so in order to save for this expected categories, I highly recommend you to set a monthly budget where you're just basically accumulating a few extra dollars every month or a few $100 every month depending on your situation, of course. But this will help you to cover some of these expenses that might emerge in the future. And a way to guarantee that you're making progress towards accumulating some money to cover this is by using the automation system, by setting like a savings goal where you allocate a percentage of your money to actually increase the amount you have to cover these expected expenses in the future. This approach is great for these expected expenses. But what about the unexpected? Like losing your job? Should you not prepare at all? I believe you should, for a couple of reasons. The first reason is if something unexpected happens, at least you have something to deal with it, right? Even if you don't have the total amount of money to deal with it, at least you have something, at least you're not caught off guard. And the second reason is to avoid making a sequence of unwise decisions. Because when something unexpected comes, we might feel very insecure and we might do some things that we regret later, like taking everything out of our savings account and does losing the interests or selling our investments on a low to avoid this from happening in, honestly, to give you more freedom, I truly believe you should have an emergency fund. Basically, an emergency fund is just a bucket inside your accounts that he's only dedicated to unexpected enlarge financial expenses that you couldn't deal with them. Otherwise, I believe it's the foundation for feeling secure in for having a healthy financial situation. What an emergency fund isn't, is a credit card. So when you actually need the money, you can use the emergency fund and you don't need to go to credit cards, any carding, the 20% interest rate to help you pay your expenses. You already prepared for them, and that's great. So if you don't have any emergency fund yet, I highly recommend you to start building one today. And the first goal you can have to start in your emergency fund is to save enough to cover one month of your expenses. I can't give you a magic number because it totally depends on where you live, on the country, how much you make, what are your expenses, of course. So maybe that can mean $300 for some people, but for others it might mean 2 thousand. So you need to save one month of expenses for now. So that's basically your first goal if you don't have any emergency fund yet, but is it enough to have one month of expenses? Well, the Pence basically, most experts recommend having an emergency fund that can cover three to six months of your monthly expenses. This seems a lot in perhaps etas, but it is basically wise to be prepared. And If you one day actually need that money, you will have IT right away. Personally, I would prefer to not have to worry about building an emergency fund, but I like to remember myself of Murphy's Law. Anything that can go wrong, real go wrong. And this well, this helps me to publish them integrity then perhaps it's better to prepare now than to worry later in the future. It's a relief to know that you have a buffer if you ended up to be fired or are you actually want to change careers or you need to cover a huge medical expense if you currently have the $0 emergency fund, just start by saving for one month of food expenses and from their gained momentum and start saving more money. Finally, make sure you are very clear on the type of expenses that your emergency fund should cover, should include a couple of beers, party? Probably not. So set up a system where your emergency fund is only used when he's extremely necessary, indicates WHO building any emergency fund, any savings account in retirement account, or just saving for your goals is leaving below your meats. And every time I heard this sentence, living below your means, I just thought of leaving really frugally, like never eating out. Who cares about Spotify, workout at home? You know, never buy anything. That just not what it means. Living below your means. Just means you are spending less than you are making. Even if it's just for $10, you're leaving it below your means. So please make sure you leave the lawyer means because that means you're saving money for your future self. And that's a great. So to wrap up, eventually, you will face some expected and unexpected expenses you need to cover in both require you to spend money. So it's way better to start predicting them now because you know, eventually they will come in. So you avoiding making very unwise financial decisions in putting yourself into a very tough situation. So set the goal of building an emergency fund. So the three steps to building your emergency fund is, the first one is committed to saving enough to cover one month of expenses. To use the automation system to set up a percentage debt will be dedicated to building our emergency fund every month. And third, builds momentum in try to increase that old from three to six months of expenses. We this steps in mind, you will be able to protect yourself from very difficult situations that might emerge. Basically, you just a better way to live your life when you feel secure and you don't feel scared every time that something might happen. So I really hope you take this advice into account and I see you in the next video. Thank you very much. 15. Wrap Up: Thank you very much for reaching the end of this course. I believe you are truly equipped to make better financial decisions and take charge of your life right? Now. The goal of this course was never to tell you how much money to put into your investments, or where to invest, or how much to save. The, the approach was different. I just wanted to give you the mental framework or the mental model that will allow you to make better financial decisions independently if your current situation. So you can actually apply this knowledge to any situation you are, you might be living today or in the future. During this course, we covered all the necessary principles that will allow you to start and thrive in your journey to achieve financial freedom. The first module, you learned how to set goals into set a plank which need those financial goals. In the second module, you'll learn how to increase your network by spending less than you earn. And you actually, we actually covered some principles on how to make more revenue in how to decrease your expenses into third module automation, I gave you the process to automate your own finances. So every month you're goals are being accomplished without you having to do anything about them. And finally, in the fourth module, you learned how to prepare for the future by trying to understand which expenses you might face in how you can start saving for them now. And most importantly, that you should start building your emergency fund right now during this course, a made the effort to tie all the knots together because I know what it is to learn a lot of concepts and then not actually understanding how to put them into practice. I've been there and I know it's really frustrating to learn dozens of different things and concepts and then not seeing how you can apply in our own lives. I tried to connect all the pieces together. So now you have the roadmap to start building your journey for financial freedom. So if you want to start now, first, set your own goals and develop a plan for achieving them. Second, keep track of your monthly expenses and make sure you are making more than you are spending. So u will be increasing your network. Third, use money allocation system that is, automate your finances to make sure your money is going to the right buckets. In fourth, Don't forget to dedicate at least one bucket to prepare for the future. And mostly that means building an emergency fund. With these four steps in mind, you are on the right path to become financially free in the future. I actually feel happy and proud of your own decisions. Please leave a review on this class because it really helps me to improve and to know exactly what you did alike on this class or you did it. Thank you again for watching. And if you're interested, I've got many other classes, especially on the learning process that can help you to master AT other skill. So if you are now interested to learn, for example, about investing your money, you can take one class of mine about learning new skills and then use that knowledge to learn about investments. Feel free to reach out to me by using my contact form on my block. And I see you in other classes. Thank you very much.