this CashNews.co is sponsored by curiositystream you can watch a full-length companion CashNews.co to this one when you sign up for the nebula and curiosity stream bundle linked below hey what’s going on friends so in this CashNews.co we are talking about something that i
haven’t covered on this channel in quite some time which is personal Finance specifically in this CashNews.co we are going to talk about the single habit that more than
any other allowed me to save up around 300 000 in my various investment accounts over the last 10 or so years since i started investing money back in college now that number on screen right there is not intended to be a flex of any kind and it’s also very much not intended to be something you
should be comparing your own financial situation against the only reason i am putting that number on screen right now is to give a specific and concrete example of just how powerful the concept and the habit that we’re going to talk about today is and that habit is called financial automation
or automating your Finances this is something i talked about in my recent CashNews.co on seven books everyone in their 20s should read and i had a few people asking me to
explain it in a bit more detail so that is what i’m doing in this CashNews.co so essentially automating your Finances means first identifying the habits and the actions
that you need to take to meet your financial goals be it buying a house or getting out of student Debt or saving for retirement and then taking those actions and handing a lot of them off to a robot or to be more accurate to a computer or a piece of software or website that takes
care of these actions for you so in this CashNews.co i’m going to teach you exactly why financial automation is so powerful why i practice it in almost every area of my life where i can do it and we’re going to go through specifically how i automate my own href="https://cashnews.co/finance" style="font-weight: bold; color: #1a73e8; text-decoration: none;">Finance
automations well there are a couple of key benefits here number one you get access to a safety net and to huge peace of mind because when you automate your Finances you will
never miss a Credit card payment you will never miss a bill payment if there’s something you are supposed to pay it is going to get paid even if you’re on vacation or you forgot to do it or i don’t know for some reason you’re a sentient bear watching this
CashNews.co and you’re going to go hibernate for the winter and sleep for three months doesn’t matter your stuff is getting paid additionally when you automate your Savings and your Investments your consistency goes way way up and as a result
you’re almost certainly going to invest and save a lot more over the course of your life in fact that is the reason i’ve been able to save more than 300 000 over the past 10 years back when i was a sophomore in college i opened my very first investment account over at vanguard and
because i had read about financial automation in that book that i recommended in a very recent CashNews.co of mine your money the missing manual by jd roth i set up an automatic deposit from my bank account to that investment account every single month now at the time it was very small i think i
started out with 50 bucks a month going in there just a little bit of money for my part-time job being invested but over time i increased those amounts and as i got into my career they became significantly larger and the most important thing is that they were happening every single month and this
consistency can be incredibly powerful and i want to give you just a small example of that say i would have started investing when i was a baby back in 1991 super smart baby thomas and i was putting 500 a month into essentially the entire Stock Market an index fund that tracks the
entire Stock Market that’s 500 a month which adds up to 6 000 a year or 180 000 over the course of the last 30 years from 1991 to 2021 but if they had done that consistently and they never took any money out of the market in the meantime their money today would be worth 1.6
million dollars imagine saving 180 000 and turning into 1.6 million it sounds crazy but it’s actually something that can be done quite reasonably by leveraging compound interest and by being consistent in your Savings and think about the person who is doing this manually if
they’re going in every single month and making the decision to invest in the market or to move money from their checking to their Savings account that’s 12 times a year they have to go in and manually do that which means that they are potentially setting themselves up
for failure every single time they might forget they might be on vacation or they might justify to themselves that they need to spend the money on something else this time and hey i’m just going to get back onto it next time i totally swear man that’s one month they missed the robot
certainly wouldn’t miss so for these reasons i think learning to automate your Finances is one of the most important personal href="https://cashnews.co/finance" style="font-weight: bold; color: #1a73e8; text-decoration: none;">Finance
we’re talking about investing and that is establishing what is called a cash buffer and to explain that i actually want to show you something i’ve been developing in my spare time called the personal text-decoration: none;">Finance tech tree so i grew up playing games like civilization where they had these tech trees you had to learn things like metallurgy before you could learn ballistics things like that and i’ve always thought about my personal href="https://cashnews.co/finance" style="font-weight: bold; color: #1a73e8; text-decoration: none;">Finance
the next thing so i’ve been thinking to myself could i create a sort of actual map for these different financial milestones and i’ve been working on this in a tool called whimsical that i’m going to show you here so basically i have these little mapped out paths here for things
like Savings regular Income installment Loans and basic Budgeting but the specific part that i want to zoom in on right now is the one month cash buffer this is what i think you should establish before you start automating your
Finances and we can see here that this leads to first a three month cash buffer and then to the start of your investing journey but the real reason you want to make sure you
have a one month cash buffer is if you are automating your Investments you are automating bill payments you’re automating deposits from your bank account into maybe an investment account or a Savings account and you don’t want those automations to draw
your bank account down below zero so essentially a one month cash buffer is a buffer of cash for one month’s expenses beyond what you’re going to spend this month and when you’ve established that in your bank account you can be sure that your current expenses your bills your
Investments your Savings your Debt payments are never going to draw your bank account down to a negative balance once you’ve hit that milestone i think it’s a very good idea to start looking at how you can automate different parts of
your financial life so let’s now talk about how i automate the bill payments in my life basically anything that is a regular monthly payment i have on auto pay if i can do it so that includes my mortgage that included my rent when i was paying rent for an apartment that includes my utilities
payments so internet gas electric uh water and that includes every Credit card that i have and to go on a bit of a tangent about Credit cards for a second i do not use Credit cards as Credit cards so your Credit
card gives you access to Credit which you might even be able to tap even if you don’t have that much money on hand i do not view Credit cards that way for me a Credit card is simply a pass-through vehicle for money that i already have and i
was already going to spend i simply use Credit cards to get access to airline points and different perks and to build my Credit score over time and i always always always always pay off my Credit cards balance in full every single month i have
never once paid a cent of interest to the Credit card companies and i think that is a goal that all of us should aspire to the Credit industry calls people like us deadbeats because we don’t make the Credit card companies a whole lot of money
and i think everyone should aspire to be a deadbeat that being said maybe you have some Credit card Debt right now that you can’t pay off in full but what you should at least do is what i do go into your Credit card and enable auto pay at the
very least for the minimum payment and the huge reason for this is that your Credit score is determined by several different factors but one of the biggest is your percentage of on-time payments and even one missed payment can be a huge ding to your Credit score so
i always auto pay my Credit cards because it is a safety net even if i get knocked out for two months for some reason or i get lost in the jungle for some reason my Credit card is going to get paid because the auto payment is set up the other area where i use
financial automation in my life is with my Savings and my Investments so i have some automatic rules with my bank account to have money transferred from my checking to my Savings every single month and then i have some different
Investments that are automatically funded and deposited every single month as well the main one is my 401k through my company that money goes into the 401k account before i even pay myself my payroll and if you work for a company that offers a 401k it’s a very good idea to do
this especially if they offer matching because that’s essentially free money and then i also have a few different taxable investing accounts basically non-retirement accounts that i automatically invest into as well now there are some good habits to practice in addition to financial
automation that are going to make sure you don’t run into problems in the future and i think the first one is to put bill due dates on your calendar you at least want to know when your bills are going to be charged even if they are automatically being taken out of your account you basically
want to stay on top of your Finances and the second big habit actually kind of goes into the exact same idea here it’s to do what’s called a monthly review of
your Finances essentially the robots are taking the actions for me but every single month i’m coming in and i’m staying on top of all of my accounts i’m
making sure i know where all my accounts are how much money i have and overall i’m making sure that i have a clear picture of my personal financial health i think only a fool sets up machines and then doesn’t check up on them every once in a while so by checking up am i making sure i
know everything that’s going on i prevent myself from getting blindsided in fact i take this one step further i don’t just check over my balances i actually have a custom built spreadsheet that i made to do some Financial Planning to actually look over my average
Income my average expenses my average Savings and investing goals and i even have formulas that will show me how much roughly i’m going to pay in Taxes what my take-home pay is going to be and my percentage is split between how much money
i’m spending on my car my housing how much i’m saving and how much i’m investing i even turn this into a completely free template that anybody else can download and use but what i haven’t done up until this point is actually make a CashNews.co showing exactly how i use it
and how it works so i have finally done that i’ve made a complete and full length companion CashNews.co to this CashNews.co going into how i use this template and how i plan out my financial decisions and i’ve uploaded it to nebula in case you haven’t heard nebula is a streaming
service built by both myself and a ton of other fantastic educational creators and on nebula i upload my CashNews.cos that you see here on youtube both early and completely free of ads like this one it’s also a place where we can experiment with content that might not work very well on
youtube such as oh i don’t know a long and in-depth CashNews.co on my Budgeting strategy and there’s a ton of other great exclusive content on nebula as well from a ton of creators that i personally love my friend ali abdal for example has a series called workflow where
he goes in depth into the tools and workflows that he actually uses in his business and in his work and real life lore one of my absolute favorite channels that i have been absolutely binging lately has a series called modern conflicts on nebula it is just as long and high quality as his normal
CashNews.cos but it covers some more controversial topics like the history of the north korean south korean war things like that that would almost certainly get demonetized on youtube so he puts that on nebula and i have been absolutely loving that series but the best part about nebula is that it
comes bundled with curiosity stream which has thousands of high quality documentaries that you can stream from almost anywhere and right now when you sign up for the curiosity stream in nebula bundle over at curiositystream.com thomas you can actually get 42 off of the yearly annual price you can
literally get nebula and curiosity stream for a full year for less than 12 it is seriously the best deal you are going to find in streaming and once you do have access to curiosity stream one documentary that i’ve been enjoying recently that i’d like to recommend to you is called the
ascent of money which tracks the development of money and goes into the history of it it’s a really interesting series so i think you’re really going to enjoy it and beyond that there are thousands of other documentaries covering economics science technology nature and tons of other
topics that can expand your knowledge of the world so to get access to all those great documentaries on curiosity stream as well as nebula with all my early and ad-free CashNews.cos and all those exclusive CashNews.cos on nebula you can go over to curiositystream.com thomas or click the link on
screen right there to sign up thanks as always for watching hopefully you found this CashNews.co helpful hopefully you learned something new and if you did hitting that like button for the algorithm would be much appreciated thanks again for watching and i will see you in the next one
CashNews, your go-to portal for financial news and insights.
🧐 Watch a full-length (47 minutes) companion video to this on on Nebula, where I go through my entire budgeting/financial planning process and custom spreadsheet template: https://curiositystream.com/thomas
📱Here's my budgeting spreadsheet template: https://thomasjfrank.com/free-budgeting-spreadsheet-template/
🖊 Quote of the week: “It is not hard to make money in the market. What is hard to avoid is the alluring temptation to throw your money away on short, get-rich-quick speculative binges. It is an obvious lesson, but one frequently ignored.” – Burton G. Malkiel, "A Random Walk Down Wall Street" 👈yet another great reason to automate your finances.
as a sentient bear i never miss my fish subscription payment because of this metal box that does things. 🐻🐻
Studies show if using a credit card people usully spend more than if not.
Hey, this is my first time seeing your channel, do you still have the Excel template? I checked the description but could not find it
Wow, I have never seen anyone create a tech tree for personal finances before. Would you be willing to share this with us mere mortals? And yes, I use my credit card the same way, to get the perks and pay off in full each month.
But you don't explain how to automate them! You just explained the plan XD
Convergent intelligence strikes again. This is the exact same paradigm that I use to manage my own finances and have learned all the same lessons the hard way. There are a lot of nuances to it… things like, how to account for monthly expenses/bills that aren’t fixed amounts (gas, heat/electric, etc), how big a buffer you actually need and want, and how to structure/utilize multiple accounts, direct deposit and automatic transfers.
The frustrating thing up until just this moment has been that I couldn’t find anyone else who was doing/thinking/teaching this. Financial advisors always harp on the same old tired tropes like “save XX% of your paycheck”, or “you need at least XXX of your income in an emergency fund”. This advice, while not baseless and still somewhat useful, always seemed to me to be like trying to teach someone to drive by saying things like “wear your seatbelt” and “don’t speed”. Great… but I’m about to enter a roundabout…
Here’s the key issue I still struggle with on this type of system… I don’t live my life on a monthly/yearly cycle for most things; I live on a daily/weekly cycle. Sure, I might have an annual salary and monthly bills. But that’s maybe half of the picture at most. The rest is daily/weekly. Months vary in days and number of weeks, so it’s not at useful for me to try and create a monthly grocery budget. Sure, it might average out over time, but it’s a lot more difficult to try and account for that. Also, some weeks you need to spend more money on groceries than other weeks… especially once you apply your “cash buffer” concept to other areas of life. For example, we buy and stock many household items in bulk and save money per unit that way. It also helps avoid the store being out of something that is a staple. But that also means when items need to be restocked, we spend a lot more than on weeks we don’t need to restock anything at all. Curious if anyone has any solutions/ideas/resources for me that might help with that.
why do you wanna tell us
1. Tutoring
2. Counseling
3. It
4. Field Research
5. Media Skills
I was cheesin when I saw the Mark Holcomb PRS that is in my room also being on your wall. Love the content, love the guitars, love the music taste. Keep it up bro!
Dude if you ever get lost in a jungle u don't want to worry about your credit card.
Is it possible to get access to the personal finance tech tree, Thomas?
Im not really sure I get this video, Isnt it much harder to have anything not on auto pay, like credit card, rent, subscriptions? I thouht I would learn something about software or tools to manage it better.
8:40 the robots got me as a gamer. Where is the personal finance tech tree? Can I download it or is it posted?
I want to find a way to automatically pay my property taxes
9/10 of this video was advertisement for the final part: Nebula / MOOCs just for cash. 💲 This is why people who are talking about „getting rich“ will be rich, not the user/costumer.
No info that i already know.
At 2:25 what type of account did you set up at Vangard?
But how do you name all those automated transfers? For example my bank doesn’t have the option to name those automated transfers in a specific pattern. For example I would like to name the transfer as “savings for month xxx” and xxx should be the name of the month in which the automated transfer happens. Do you have some solution for that?
Wanna a good financial advise? never marry, never get kids this solves 90% of you problems
awesome tips, Frank! thanks for sharing
Half a million views, 14K likes and only 228 dislikes. He just said "automate your finances" without telling how to do it and then spent about 30% of the video telling use about a sponsor and how you should buy a book.
This is pitiful.
What app does he use to map out his thoughts like that anyone know?
Any way to get to the nebula video? Appears to have expired. Thx
First part he missed… make sure you have a consistent amount of minimum income that can be automated.
This is the video i needed to see to know i am on the right track.
How do I access the free budgeting excel sheet?
I don't think it's a good idea to automate all of your finances. For instance if I lose my job and no longer have an income coming in, I want to decide which of my bills get paid and what order. I don't want my automation kicking in and paying Netflix when that money needs to go to electricity.
Thank you for the video, this will ensure i will not be disturbed and I'll have a stress free hibernation :))