My honest advice to someone who wants financial freedom | Mark Tilbury

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1:01All the features of Big Wireless Service for half the cost. Tap the banner to switch today. Terms apply, standard rate applies at month 13. See visible.com for plan features and network management details. This is my honest advice for anyone who wants financial freedom. And it comes from years of personal experience. You see, back in school, my teacher saw me as a lost cause which pushed me to drop out at 16 and start an apprenticeship as a carpenter which involved making wooden trash cans for only $2 an hour. This was just enough to cover my expenses. Every day felt the same and blended into one. I was stuck on a hams the wheel, never getting ahead. I knew if I didn't find a way to escape, then I'd end up just like my solace co-workers. I wanted to be free to do the things I loved without being a slave to my boss. So I came up with a plan, managed to achieve millionaire status and financial freedom within my 20s. A lot of people ask me, is it still possible to become financially free today?

2:03And the answer is yes, absolutely. If you've got the right plan. So by the end of this video, my goal is for you to have a clear roadmap to get financially free as quickly as possible. Let's get into it. Step one is to find your freedom figure. Your freedom figure is the amount you need to live your life without having to worry about money ever again. Once it's invested correctly, it would generate enough passive income to fully support your lifestyle without ever running out. I'll talk more about investing later on, but first, we need to nail down what that figure is for you. As this isn't a one size fits all kind of thing because financial freedom means different things to different people. So the first thing you need to do is set your financial freedom baseline. Maybe you want a life where you go on vacation more often, drive a sports car, live in a mansion, or buy a private jet, just bear in mind the fancy of the lifestyle you're aiming for, the tougher it'll be to get there. Personally, I've always valued the freedom that comes from not having to trace money

3:04over living a lavish lifestyle. So I made a rule early on to only increase the quality of my lifestyle slightly each and every year. Let's go through the different areas of your life and estimate what each one might cost to live comfortably. I'll be basing this on studies that show what people in their 20s typically aspire to. Now, grab a piece of paper and feel free to adjust the numbers to match your own goals. So first up, your house. For most people in their 20s, city life or a place on the outskirts is ideal. If you get a spot in Miami, you could be paying around about $30,000 per year for a one bedroom flat. And if you're in the UK, then London's rent prices are pretty similar. Next up is your car. Now, the Porsche 911 always seems to appear on dream car list. So let's use that as an example. Luxury cars like this come with higher costs after considering fuel, maintenance and insurance. On top of the car payment, you'd be looking at a total of around $24,125.

4:08Now for vacations. According to the New York Post, Gen Z's are far more interested in traveling than my generation ever was. Back in my day, one vacation felt extravagant, but now the sweet spot seems to be around three trips for a year. For three mid-range trips, you're looking at about $5,000. And of course, if you're bringing someone along, you can expect to double that. Next, we have to consider the boring bills. If we stick with one bedroom apartment in a city, then with electricity, heating, water and internet, I'd estimate that this would cost about $3,000. Per year. Next is food. Now, I'd assume you'd want a mix of home cooking, and eating out. I reckon you could do this for about $5,000 per year. Now for health insurance. This isn't really needed in the UK, but if you're in the USA, then you can expect to pay $2,500 per year for a mid-level plan.

5:09Finally, there's leisure. This covers your gym membership, nights out and any other spur of the moment spending. A reasonable yearly budget for this would be around $4,000. Once you've written down your costs for each category, add them up to see how much you'll need to live your dream life each year. In our example, that adds up to $30,000, $24,000. Right, that's $75,000, $325 a year. As that for a bit of quick maths. Now, to find your freedom figure, take that yearly number and multiply it by 25. We use 25 because of a rule called, wait for it, the rule of 25. Who'd have guessed that? This rule is a way to figure out how much you'll need invested, so that you can take money out each year without ever running out. In our example, $75,325 multiplied by 25 gives us 1,883,123,

6:14think of it like having a golden goose that lays just enough eggs each year for you to live on. As long as you only take the eggs and don't eat the goose, it keeps producing more eggs every year. That way, you can keep living off the eggs without ever using up your main money stash. This is assuming you're able to get more than a 4% return on your money. And while past results aren't a guarantee of future returns, the average annual return of the S&P 500 over the last 10 years has been around 12 to 14%. Although this is slightly higher than the longer term average, no one has ever lost any money if they have bought and held an S&P 500 index fund for more than 20 years based on historical averages. So how do you invest in the S&P 500? Well, just download and invest in app like Trading 212. Once you're in, search for an S&P 500 ETF which lets you invest in the top 500 US companies all at once. Trading 212 lets you invest in something called fractional shares.

8:10This is great as it means the stock market isn't just for the rich investors anymore and the average person can get involved. If you're just starting out, it's a good idea to use a strategy called dollar cost averaging. This means you're investing the same amount on a consistent basis whether the market is up or down. The idea is that over time, this will help you average out your costs so that you don't buy all in when the market is most expensive. Rather than doing this manually, you can actually set up the app to invest automatically for you on a regular basis using the PI's feature. Since I was planning to talk about Trading 212 anyway, I reached out to them to see if they'd be interested in sponsoring this portion of the video. They agreed and are offering a free fractional share

9:12worth up to 100 pounds to anyone that uses the code Tilbury when they create an account. Plus, you can get more free shares by inviting your friends. Both of you will get a free share as long as they fund their account. I'll leave a link in the description if you're interested. Step two is to hack your life. I get that reaching your freedom figure in an investment account might seem like an impossible task. It definitely felt that way for me when I first started, but there are a few strategies that can help you get there faster. I highly suggest taking a closer look at all the areas where money might be slipping through your fingers. Chances are, you're spending far more than you realize on things that don't really matter to you. Don't worry, I'm not gonna lecture you about skipping Starbucks or making packed lunches every day. I'm sure you've heard enough of that advice from my shorts. Instead, I want to show you clever ways to keep living the life you love while saving money through some smart hacks. Let's kick things off with car hacking because I think a lot of people need to hear this. Social media might have you thinking

10:13that everyone is driving around in brain trovers and lambo's, but let me tell you, that's usually not the case. Most of these people have their cars on finance or loans, paying hundreds of dollars every month just to keep up appearances. According to LendingTree, the average monthly car payment for a new vehicle in 2024 hit a whopping $734. That's almost $9,000 a year down the drain. The worst part, most people can't even afford these payments, which is why there are around a hundred million Americans with outstanding car loans right now. So, let me give you some advice. Don't get sucked into this trap just because your mates are taking out car loans doesn't mean you have to. Instead, think about car hacking. This means by a quality used car that's already hit the bottom of its depreciation curve. You can drive it for a few years and then sell it for close to what you paid. No massive monthly payments and no debt hanging over your head.

11:13Next up, let's talk about something I like to call brand hacking. This is all about picking generic or store brand products over the big name brands to save a bit of cash without losing out on quality. A study from moneysavingexpert.com actually found that people can save up to 87% by going with generic versions instead of the branded items. But let's get practical so you can see what I mean. Here's a box of cocoa pops, absolutely classic. Everyone loves them and I always keep a box under my desk but they cost around $4.25 for a box. And here's a box of Choco Rice, the unbranded version which costs around $1.66 a box. By choosing the unbranded cereal, you're saving $2.56 each time. And honestly, hot bet most people couldn't even taste the difference. Plus you get 500 grams over the 290 grams in the branded box. So it's gonna last nearly twice as long. I know what you're thinking, $2.56

12:15isn't gonna make me a millionaire anytime soon. Well, actually, if you save $2.56 every day, that's $934.40 a year. Do that for five years and you've saved $4,672. And that's just from one small swap. Think about how much you could save by making similar swaps in other parts of your life. It's all about those small adjustments adding up over time and making your money go further. Now for the big one, House Hack In. As we know from step one, House In is usually your biggest expense, but what if you could reduce or even completely eliminate that cost? You'll probably expect him to say, live with your parents or go for a smaller apartment. And while those are good options, they don't suit everyone. So here's a smarter strategy you can use. Instead of getting a typical apartment, think about getting a duplex or a property with an extra room or two. Sure, it might mean a slightly higher deposit up front, but it's worth it.

13:16You live in one unit and rent the other one out. Using this rental income to cover most, if not all of your mortgage. That way, you're effectively living for free while building equity in your home. You can also do this if you're renting. Recently, I went to a nice Airbnb near London Bridge. It was a fantastic spot. And I got talking with the Airbnb host and found out that he actually rented the place for a fourth K a month. When he rented it out on Airbnb, he would just go and stay at his girlfriends. I did some quick maps and worked out that he only had to rent out the apartment for 10 days to cover all of his rent. Pretty smart, if you ask me. But of course, he did have to get a nice enough apartment with a good view for it to rent out well on Airbnb. But if you're prepared to take on a slightly more expensive place, then it will be easier to get bookings on Airbnb. Just make sure to clear it with the landlord before doing this, as it could cause a lot of issues if you're not upfront about it. Now for tax hacking. I noticed one might sound a bit dodgy,

14:17but trust me, there are lots of ways you can legally keep more of your money. One great tax hack is to take advantage of deductions. If you have a small business or side hustle, you could re-propell fitness water with Gatorade electrolytes, zero sugar, and vitamins. Propell hydrates better than water to help you get the most out of your workout and get back to your best self. What propels you? Propell with Gatorade electrolytes. When you need to build up your team to handle the growing chaos at work, use Indeed Sponsored Jobs. It gives your job post the boost it needs to be seen and helps reach people with the right skills, certifications, and more. Spend less time searching and more time actually interviewing candidates who check all your boxes. Listeners of this show will get a $75 sponsor job credit at ND.com slash podcast. That's ND.com slash podcast, terms and conditions apply. Need a hiring hero? This is a job for Indeed Sponsored Jobs. Visible puts unlimited 5G data and hotspot in the palm of your hand,

15:18powered by Verizon's 5G network with no contract holding you back. And for a limited time, you can get visible for just $19 a month for 12 months when you use promo code save6. All the features of Big Wireless Service for half the cost. Tap the banner to switch today. Terms apply, standard rate applies at month 13. See visible.com for plan features and network management details. Use your taxes by claiming expenses like a home office, internet, or travel, as long as they use for business. Another is using tax-free savings accounts. In the UK, you can save up to 20,000 pounds per year in an ISO, where all your interest and gains are tax-free. In the USA, you have a similar option like the Roth IRA. Tax hacking is all about understanding the rules wherever you are, and using them to keep more of what you earn. The aim is to pay what you owe, but not a penny more. Now let's talk about deal hacking. This is all about negotiation. Let's say you're looking to buy a car,

16:18never accept the sticker price. That's what the dealership wants. Remember, the first price is rarely the best. Do your research first, so you know the car's market value. Get quotes from a few dealers, so you can say the dealer down the road has offered me a much better deal, and actually be able to back this up as it puts you in a much stronger position. The easiest way to find out the true value of a car is to pretend you're selling the one you're looking at to a car buying service like carmax or kavanaugh. Check out what they'd offer you for it online. You want to pay as close to this price as possible to ensure you're not overpaying for the car. Also, buying at the right time matters too. If you go at the end of the month when salespeople are trying to hit sales targets, you'll often find a better deal. These strategies have saved me thousands of cars over the years, and they work for lots of other things too, so don't be afraid to ask for a better price. Everything's negotiable if you know how to play the game. Step three is to get a credit card. The biggest lie young people are told

17:18is that credit cards are evil and that you shouldn't have one. A lot of people think credit cards are just a quick way to get into debt, but the truth is they're actually one of the best tools you can have for building a solid credit score if you use them wisely. Your credit score is like your financial reputation, showing lenders how reliable you are with money, and with a high score, you'll have much better options when it comes to borrowing, which can save you a ton of money in the long run. I mean, let's say you're 28 and you're ready to buy your first home. If you've been using a credit card responsibly and building that score up, you could qualify for a mortgage with a lower interest rate. That means that more of your hard-owned money stays in your pocket instead of going to the bank, but if you've ignored your credit score, you could end up with sky high interest rates or even be turned down altogether. So don't fear credit cards. Use them to build your credit score, but keep your balance low and pay it off every month. Step four is to create an additional income stream. If you're serious about financial freedom,

18:20building an extra income stream is key. Think of your income like a stall with one leg. If you're relying on just your job, that's a single leg holding you up your entire life. If that leg breaks, let's say you lose your job, then you're left with nothing to keep you steady. This happens way more now than it ever used to. The truth is, secure jobs aren't as common as they once were. Most people will have around 12 different jobs over their lifetime, but if you add a few more legs like a side hustle or investments, that stall becomes rock solid. Now, if one leg fails, you're still supported by the others. Building multiple income streams is like adding extra legs to your financial stability. The great way to start is by choosing a side hustle that builds on skills you already have. That way, you don't have to learn something brand new from scratch. There are plenty of options, affiliate marketing, freelance in e-commerce, or even classic gigs like window and car cleaning. The main thing is the value you bring, the more valuable your work, the more you learn.

19:21Now, I know the usual excuses. I'm too busy. I don't have enough money to start. I don't know how, but let's be honest, these are a load of rubbish. Let me be real with you. There are 168 hours in a week. A nine to five job takes up 40 hours. And if you sleep eight hours a night, that's 56 hours. Plus about 10 and a half hours for meals and 10 hours of commuting, that still leaves you with over 50 hours of free time every week. So if you tell me you're too busy, then you just don't want financial freedom enough. Step five is to use money for its true function. There's one thing that rich people do completely differently to middle class and poor people. Poor people think that money exists to pay bills and fund their lifestyle. Middle class people think money's for building credit so they can get bigger loans to buy bigger houses and nicer cars. Rich people know the true function of money is expansion, which means using your money to make more money. So once you've got some side hustles

20:23or extra income streams going, it's time to think bigger. And I don't mean a bigger lifestyle. That's the trap that catches a lot of people out. As soon as they start making more money, they start spending more. Instead, think about how you can use money as a tool. This is when you start looking into passive income streams where your money can grow while you sleep. This is why the rich get richer. They're not just working for their money, they're making it work for them. Now, no income stream is truly passive, but by investing wisely, you can reach a point where your money does the heavy lifting. Back in the day, I was working long hours, flipping cars in the evenings, working in the shop on Saturdays and tutoring on Sundays. I hit the point where I physically couldn't fit in any more hours. That's when I realized I needed to put my money into things that could grow on their own. The stock market is one of the easiest places to start. And as we mentioned, we're trading two and two. You can get going with as little as one pound and even try out strategies in practice mode

21:23without risking real money. Personally, I invest most of my money in an S&P 500 index fund, which has delivered some great returns over time. Now let's talk about crypto. This one's a bit different. It's got a low barrier to entry and big growth potential, but it is riskier than stocks. I keep about 5% of my money in well-known coins like Bitcoin and Ethereum. I think it's worth having, just in case things pump, I did after the US election. However, I am prepared to lose it all as it's a high risk investment. Of course, real estate is the ultimate wealth builder, but it does need a bit more cash upfront. If you can save a deposit, you can take advantage of the house hacking method I mentioned, or you could build out a portfolio of rental properties. If you wanna know exactly how to set up an investment account step by step, then I'm gonna leave that video right up there. But don't click on it, Josh, yet. Make sure to subscribe if you wanna grow your wealth. Okay, I'll see you over there. Have you heard that McDonald's spicy chicken McNuggets made with spicy tempura

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