 What's happening guys it's Shane here so a lot of the time when you see videos like this on YouTube people are going to talk about pyramid schemes get rich quick schemes it's not a pyramid scheme it is a it's not even a scheme per se it's crypto currencies can you lose a lot of money on that other investment that I want from the email or some secret way to get rich quick that for a limited time you can buy and access for the rest of your life for only $1997. I think all of my regular viewers know what my opinion on this sort of thing is this stuff really makes me mad main it sounds like a get rich quick scheme most of these things are scams or underwhelming at best the truth is it's extremely difficult to get rich quick and no one's going to be able to teach you how to do it without a ton of luck involved and these fake gurus online really need to stop it stop it get some help however studies of millionaires have shown that almost all of them have certain things that they have in common and you might be surprised to know that most of the steps to get rich are actually pretty simple it's just not going to happen overnight and most importantly for this video specifically avoiding common traps is usually going to be much more important than jumping onto some big opportunity and I'll be going over some of the biggest and most dangerous traps that all of us could potentially fall for it's a trap and especially in this day and age it's very important for us to know about these and the first and by far most important one is forgetting to smash the like button right below this video a smash smash it's a smash just kidding but I really do appreciate those that do that because it helps to defeat the evil youtube algorithm so most of the ones on this list were gathered from a study that they did where people in their 60s and 70s were interviewed on whether or not they have retired yet and if not what caused them to not be able to retire the study interviewed thousands of people and on this list we're going to start with number 10 and then just go down the list to number one which is the most common reason and really I think the goal of being rich is to just be financially independent to the point where you don't have to work a job you can retire and just do whatever you want to all day long so when I was trying to make this video I looked at a lot of different studies and I think this one is the most accurate at portraying what most people are going for when they think of being rich so number 10 on the list is going to be procrastinating and that came in with about 64 of people saying that this was one of the reasons why they weren't able to retire early and waiting to invest until they're older is one of the main reasons why people don't become wealthy when you're young you have the power of compound interest on your side as well as time and this is why it's actually quite easy to become wealthy if you start investing at an early age if you look at a chart of Warren Buffett's net worth for instance he started investing when he was about 14 years old and he just never stopped it took him about 16 years to get to the point where he was a millionaire but he didn't start with any sort of advantages or really any advantages at all but in the same way that you and I and probably anybody else has probably procrastinated studying until the night before the test people also procrastinate investing until right before they need to retire and like I said before this is generally not a good strategy because compound interest is on your side especially when you have a lot of time and you're young now I've gone over this other times on my channel before but with a Roth IRA for example if you start investing at age 15 years old you invest $500 a month by the time you're at the age where you're going to retire you're going to have millions of dollars if you start at age 35 though you're only going to have around 685 thousand dollars and really this isn't just the Roth IRA or the 401k or anything like that one dollar invested at the age of 20 by the time you're around the age of retirement is going to be worth about five and a half dollars whereas if you start investing at around age 55 it's only going to be worth about a dollar and a half and procrastination is really just the subtle fear that prevents you from doing what you know you need to do but good news the fact that you're watching this video right now means that you are taking action and you're heading in the right direction now number nine on the list came in at about 64 percent of respondents and it's not making long term plans when it comes to investing you've got time on your side and it's very important for you to plan out your financial goals now one of the most obvious examples of this is something that you see all the time right now in this day and age i've made a lot of videos about it and that's people spending 80 000 on a degree that they're passionate about or something like that and it's not a degree that's going to end up getting them a job in fact it's one that's going to put them deep in student loan debt then maybe you know maybe they're in their mid 30s or their 40s they finally get their student loan debt paid off they're now at a net worth of zero dollars and what's the first thing that they do they go out and they buy an expensive car that they don't need or maybe they go get an expensive apartment they rack up some credit card debt and the cycle continues this is why you want to plan ahead and then work your way back plan when you want to retire figure out what kind of lifestyle you want to live and then work back from there and figure out what steps you need to take in order to get to that point and it does not mean that you shouldn't pursue your passions just make sure that you have a solid plan in order to get to a point where you can make a living from your passions and if getting an expensive useless degree isn't going to help you to achieve your goals then just simply don't do it number eight on the list came in at about 69% and that is overestimating social security now so many people think that they can rely on social security when they retire and it's just going to cover all of their expenses but really in a normal area it only covers maybe rent and then a little bit of your food like you're honestly going to be lucky if it just covers all of your essentials in many cases it doesn't and there's a very good chance unfortunately that many people watching this video probably aren't going to have social security at all by the time they want to retire now it's kind of controversial and i'm not going to get into it that much but a lot of people think social security is going to run out around 2035 or so or at the very least it's going to be decreased even further and it's already barely covering people's expenses so if it's decreased even further it's going to be even less so at the very least most people can agree that it's not going to be in the future what it is right now so i think the big point here is don't count on social security being something that's going to be able to carry you after retirement now number seven comes in at about 68% and that is being hit by major medical bills now this one is extremely sad but i see it all the time unfortunately um especially here in the US healthcare is ridiculously expensive and so that way by the time you get older and you probably start to have some health issues you'll have some savings for that now on top of this it's a good idea to get into a job where they offer really good medical insurance that's a huge perk of just being a normal nine to five type of person that has a job and this is honestly something that affected me on a personal level because when i was very young my dad had a huge accident at work and it basically destroyed my family's finances and kind of just like altered my entire childhood and just really affected my family a lot and obviously i'm not saying at all that if you have medical issues it's your fault in any way shape or form all i'm saying is chances everybody at some point in their life is going to have some medical issues and until we get the whole medical system figured out which might take a long time you want to basically take some precautions and have some savings and try to invest so that you'll have money to cover those and this really isn't something that you think that much about when you're young but the truth is is everyone's going to have health problems at some point in their life and so it's better to be safe than sorry number six came in at about 70% and that is making bad investments and this one is very near and dear to my heart just because one of the main reasons why i made my channel is because i was just watching youtube and i was just looking at all this horrible advice that so many different channels were giving on youtube telling people to become day traders and penny stocks and cryptocurrency just awful advice that you hear here on youtube and yeah a lot of people fall for it including myself and this could just be an entire video in and of itself but basically you know a lot of different people are falling for scams here on youtube and on the internet as a whole and then some of them aren't necessarily scams but they're just not the best possible advice that you could get you know houses for instance 70% of millennials actually regret buying a house yet you have all these channels here on youtube that say that investing in housing is the best thing that you can possibly do and both of those things are simultaneously true investing in real estate can be extremely good but it also requires a lot of skill skill that most people don't have same with investing in stocks there's a lot of channels here on youtube that will try to get you into investing in stocks and i think that's great i love investing in stocks but there are ways that you can do it that could potentially lead you to losing money or just not getting a very good return same with day trading penny stocks cryptocurrency you know the list goes on and on there there's a lot of you know get rich quick schemes here on youtube where they try to get you to pay them $2,000 to teach you how to you know get rich quick from drop shipping or something like that taking out bad student loan debt for a degree that's not going to help you get a job or start a really good lucrative career in the future payday loans also comes to mind or taking out credit cards just to cover your monthly expenses there's a million ways to screw this up when it comes to investing and most people do number five on the list is one that not a lot of people talk about and that is getting divorced and this one comes in at 74 percent and this one is a little bit kind of taboo i think to talk about but this is a huge one that just kills wealth if you're not careful for one you're going to lose at least half of your money probably more if you think about it because the lawyer is going to get what like 20 30 percent of your entire wealth and then let's say your spouse gets 50 percent of whatever is left over so now you have like maybe 30 percent of what you had in the first place left to sustain you now on top of that your possessions including your house your cars etc all of that is going to get sold at a much lower price than what it's probably worth because you know they're trying to sell it fast and they're trying to get through all of the divorce proceedings and everything and so you know something that was worth maybe 20 thousand dollars maybe they end up selling it for 15 thousand dollars so you're going to be losing a lot more value there as well if you've ever been involved in the real estate industry at all you're going to know that this is true the best real estate investors are constantly looking at different county records and everything to see who's getting divorced and then they're cold calling those houses or they're going and door knocking on the houses of people who have recently got divorced but let's say you do end up with the house now you get to pay the mortgage with only one income instead of two so your expenses are staying pretty much the same maybe they're going down a little bit however your income is now half of what it used to be and so there's a much higher chance that you're going to end up not being able to pay your mortgage and really the list goes on and on here but in general you want to be very careful about who you marry make a good choice when it comes to that sort of thing you're going to be stuck with them for the rest of your life so you want to marry someone that's either financially literate already or they're mature enough to the point where they can become financially literate in the future the divorce rate is over 50 i believe right now so you just need to be very careful about who you marry and we haven't even talked about like alimony and child support or any of the emotional toll that it takes on you so again it's just really ugly just be careful who you marry this is a huge wealth killer if you end up getting divorced number four on the list is going to come in at about 76 and that is earning less than expected so this is a huge danger that you're putting yourself into if you go into say an industry that's dying that doesn't have a lot of opportunity you'll probably end up earning less than you think you're going to make another huge mistake that people make is getting a degree and something that's not going to lead them to getting a good stable career you got to be a little more practical here i'm not saying don't go for your passions but at the end of the day you got to put food on the table you have to provide for your family and then after that you can think about okay how can i go for my passions you've got to consider the big picture and don't just think of one little thing when it comes to whatever job or career you're going for and it's very important that you plan ahead and make sure you're going for a career where you're going to be making a decent salary i always say at least 75 000 because there's lots of studies that say your happiness is topped out at around 75 000 depending on where you live and other factors 75 000 is a good one to aim for number three on the list comes in at about 77 and that's getting laid off or spending an extended period where you're unemployed and this one totally makes sense you've got money coming in every month you're doing really well you've got your rent covered you got everything covered and you even have a little bit of extra money at the end of the month but what happens if all of a sudden something happened like say virus and you get fired most people would only be able to pay for maybe an extra month maybe an extra two months before they'd have to start taking credit cards out or something along those lines some wouldn't even be able to pay for a single extra week so the biggest thing here the most important thing to take away from this point is that you need to have an emergency fund and most people say that it should be around three to six months and what that means is it's going to cover three to six months of your expenses if you you know had a house fire or you get fired from your job or you get laid off or something along those lines you will be good to go you'll have a three to six month runway to find another job or start a business or just get on with your life now some even say you should have more like six to twelve months this is what I personally recommend because you know maybe you need a little bit longer and it's just nice to have that extra cushion but hey if you can't do six to twelve months three to six months as good as well some other things to consider here is it's also nice to have multiple streams of income so maybe you have a normal job but you also have some side hustles on the side where you are making pretty decent money from that as well and if for whatever reason you got fired from your normal job you could just do your side hustles even more and make even more money and you'd probably be able to cover your expenses that way another thing is to be highly skilled at whatever job you're doing or you know be specialized in something to the point where if you do get fired by your company other companies will want to hire you immediately job hopping is also generally a good idea and it's always good to have other jobs in your back pocket just in case this is also known as monkey branching and that's basically where you don't leave your current job until you have another job secured so it's kind of like a monkey doesn't let go of one branch before they have the next branch secured if that makes any sense number two on the list is being struck by poor health that prevents you from working and this one comes in at about 79 percent and this one sort of relates back to the other one we talked about a few steps ago but health can be a huge wealth killer if you're not careful and they say the only two things you can always expect in life are going to be death and taxes you can say the same thing about bad health it's going to eventually happen one way or another unfortunately and especially here in the united states health care is ridiculously expensive and we don't have too much control over our health but we do have some control over what we can do to prepare for it and something a lot of people actually are talking about these days and i'm not saying by any means that i recommend this but it is something you're hearing a lot about is people are making their money here in the us they're getting enough money to the point where they can retire and they're actually moving to other countries where health care is much cheaper because chances are you're going to have most of your health issues later on in life and i definitely see this becoming a more and more common trend in the near future there's a lot of people that are doing it now but i see this becoming more and more common just because of how expensive health care is here in the us a family friend of mine actually did this in ecuador he was a professor of architecture at the university of kansas and he moved to ecuador after he had basically saved enough money to retire and he lives down there and he's living a really good lifestyle he kind of works part-time at a university down there number one on the list came in as by far the highest at 81 percent and that is having low financial literacy and this is what my channel is all about it's all about investing at a young age saving choosing a good college degree all of the things that are going to lead to you having better financial literacy making good career decisions avoiding bad debt using and leveraging good debt making plans for your future all of these are huge opportunities and if you capitalize on them good things are going to happen and it's really not that hard but the earlier you have financial literacy the better and i've gone over this before but you know starting to invest in a Roth IRA at an early age will mean you're going to be a millionaire by the time you retire as long as you keep doing it same with a 401k at a normal company let's say you're making $50,000 a year with a five percent match you are going to be a multimillionaire by the time you retire and this isn't even including other types of investing like my personal favorite which is index fund investing if you invest $1,000 a month for the rest of your life again you'll be a multimillionaire but that would be a topic for an entire video and i don't want this one to go on for too long but go ahead and watch my other videos right here i made them just for you hit the subscribe button smash the like button ring the notification bell comment down below any ideas you have on this video or other videos thank you so much for watching and bye for now