Jaspreet Singh: What To Do If You’re Over 30 and Broke
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John Csiszar
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Carly Brashears
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Jaspreet Singh is a popular financial personality and the founder of Money Mindset. In a recent YouTube video, Singh offered both philosophical and practical steps for those who are 30 and older and broke.
Singh emphasizes that even starting from nothing, you can become a super saver and investor, but you have to focus on two steps. First, you have to understand the emotional side of money, and then you have to comprehend the practical side of money.
Here’s how Singh advises those who are over 30 and broke to proceed.
Understand the Emotional Side of Money
Singh uses a pyramid to highlight the preparation you need to take before you embark on a campaign of saving and investing. As Singh says, you have to be happy with yourself before you have money, otherwise money isn’t going to be the answer. To that end, Singh recommends that viewers first get physically fit, then mentally healthy, then spiritually fit. Only at that point can you work on being financially fit.
Physical health is self-explanatory. If your body isn’t healthy, you can’t really enjoy having wealth. Mental health involves surrounding yourself with people that make you happy and removing toxic influences from your circle. Spiritual fitness refers not to religiosity but to having a purpose in your life. As Singh puts it, what’s the reason for you getting out of bed in the morning? What makes you excited? Without something to drive you every day, even wealth won’t bring happiness.
At the top of Singh’s pyramid is financial fitness. If you hate money or the idea of becoming wealthy, says Singh, you won’t become wealthy yourself, because how can you succeed doing something you hate? If you think making money or becoming rich is bad you’re not going to want to do that, and therefore you will never successfully hold on to wealth.
Understanding the Practical Side of Money
Singh says that most people have “holes in their boat” when rowing to the island of financial security. Unless you figure out how to plug your sinking boat, you’ll never reach your goal no matter how hard you row. To that end, Singh offers eight practical steps you should take to patch your boat and sail in the right direction.
1. Stop the Financial Bleeding
As the age-old axiom says, you can’t get out of a hole if you’re still digging it. If you have high-interest credit card debt or payday loans, for example, Singh stresses that you should pay this money back first, as fast as possible. You should not even be thinking of the stock market or other investments yet, according to Singh, if you have high-interest debt.
2. Save Your First $2,000
Singh cites the oft-quoted statistic that the majority of Americans don’t have even $1,000 saved for an emergency. Without an emergency fund, it’s easy to build up debt, as all of your emergency spending ends up on a credit card. Singh suggests doubling that amount to $2,000, with plans on building it even bigger in the future.
3. Stop Spending Your Money
For most people, step No. 3 in Singh’s plan will be the hardest. To get ahead financially, Singh suggests you need to go into a spending shutdown. You’ll need the discipline to stop going out to expensive dinners with friends, going to the club on weekends, and taking vacations until you get your finances in order.
Singh understands it may be hard to take the criticism from friends who don’t understand what you’re doing, but as he explains it, you want to actually become wealthy, not look like you’re wealthy, and this is an essential step in getting there.
4. Funnel Your Income
An important step in Singh’s system is to funnel your income as it comes in so that all of your money goes to the correct place. Using a 75/15/10 system, for example, 10% of your money immediately goes to savings, 15% goes to investments, and you have to learn to live off the remaining 75% of your money.
Once you have enough savings — Singh suggests three to 12 months of income — that 10% funnels to your investments instead, meaning you’ll be investing 25% of your income. Eventually, the idea is for your investments to generate enough money to finance your lifestyle. At this point, your investments will be creating your wealth for you, and you will no longer be working to make other people rich.
5. Choose Your Investments
As for which investments you should pick, Singh recommends stocks and/or real estate. Singh suggests viewers either pick their own individual stocks or simply own the S&P 500 via a mutual fund or ETF. As the market moves in cycles, view selloffs as opportunities, chances to buy more at lower prices.
On the real estate front, Singh says it brings three benefits: it generates cash flow, it’s a hard asset that you can physically feel and touch, and it offers tax breaks.
6. Don’t Finance Anything That’s Not Putting Money in Your Pocket
Singh is adamant that you shouldn’t be borrowing to buy something unless it’s putting money in your pocket, with the possible exception of your home mortgage. In other words, don’t buy things you can’t afford. Singh believes in the rule of 5, which says that if you can’t buy 5 of a particular item, you can’t truly afford it.
7. Earn More Money
One way to increase the amount of money going into your funnels is to generate additional income. Singh suggests that starting a new business can be a good option. As to which business you should start, that’s an individual decision based on something that you have passion for, along with the ability to execute.
8. Protect Your Money
Once you have money, Singh stresses that you need to protect it. To this end, you’ll need to surround yourself with good accounts, tax advisers, lawyers and financial experts. Singh emphasizes that there’s a big difference between a good tax adviser and a bad one, so you’ll have to do your homework and make the right decision.
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