Thankfully, Getting Rich Is This Simple

0:00 If you want to be rich, it all comes down to six rules every

0:03 wealthy person I know follows every single month.

0:06 And even though I worked in investment banking for 9 years,

0:09 nobody handed me these.

0:10 I had to learn them the hard way because your salary,

0:14 it's just a starting point.

0:16 What actually builds wealth is what you do

0:18 with the money once it hits your account.

0:20 And most people never learn that.

0:22 The first rule is the one that rewired how I think about money entirely.

0:26 And it comes down to a single equation.

0:29 That is the wealth equation.

0:30 And once you see it, you can't unsee it.

0:33 There are only three things you can do with your money.

0:36 Earn it, keep it, grow it.

0:39 Most people spend their entire career optimizing for one.

0:42 The wealthy optimize for the other two.

0:45 Here's what I mean.

0:46 The gap between what you earn and what you spend is

0:49 the only number that determines whether you get richer or stay stuck.

0:54 Everything else, the job title, the bonus, the postcode,

0:58 that's all just a distraction from what really matters.

1:00 I worked in banking for 9 years and I

1:02 was seeing people earn silly amounts of money,

1:04 huge salaries, but virtually no gap.

1:07 The number on that pay slip was huge.

1:09 The number that actually mattered was zero.

1:11 And this is what I mean.

1:12 Someone earning say 80,000 who spends 70,000 builds

1:16 less wealth than someone earning 40,000 who spends 25,000.

1:20 The first person saves 5,000 a year.

1:22 The second saves 15,000.

1:24 Three times more on half the salary.

1:27 And you can widen that gap two ways.

1:29 Earn more or spend less.

1:31 We'll come back to which one has more leverage.

1:33 But first, the equation itself.

1:35 Wealth isn't about income, it's about the gap.

1:38 The obvious question is, do you actually know what your gap is right now?

1:42 Because most people don't.

1:43 And that's where rule two comes in, the income multiplier.

1:47 And this is one of the most overlooked rules in personal finance.

1:51 Your spending has a floor.

1:54 You can only cut so much.

1:56 But your income doesn't have a ceiling.

1:58 So why does every piece of money advice start with cutting back?

2:02 I tested this in my own career.

2:04 Over 9 years in banking.

2:05 I went from earning £35,000 to £120,000 base salary.

2:10 And I broken down every year of that progression

2:13 in another video which I'll link right here.

2:15 And the thing I'll tell anyone starting out now is

2:17 that the difference between those two numbers wasn't cutting subscriptions.

2:21 It wasn't skipping coffees.

2:23 It was negotiating.

2:25 It was switching jobs.

2:26 And it was asking for what I was worth.

2:28 The cutting side of the equation never moved my life.

2:31 But the earning side very much did.

2:34 So if you think about it, if you're spending 2,000 a month,

2:37 the absolute most you can save by cutting

2:39 is 2,000 and only if you live on nothing.

2:43 That's your flaw.

2:44 But your income, there's no version

2:46 of the maths where you've earned the maximum.

2:48 A pay rise, a side income, a new skill, a different job.

2:52 Every one of those moves the ceiling up.

2:54 And that ceiling actually doesn't exist.

2:56 This is why two people with the same

2:58 expenses can end up in completely different places.

3:01 One spent 10 years getting really good at saving every single month.

3:04 The other spent 10 years getting really good at earning every single month.

3:08 It's the same discipline.

3:09 It's the same effort, but often it's 10x the result.

3:13 And the part that nobody says out loud is that cutting back is comfortable.

3:17 It feels really responsible.

3:18 There is absolutely a time and place for that.

3:20 This is a personal finance channel and I

3:22 have specific videos on budgeting and saving.

3:24 But the earning side, it is uncomfortable.

3:27 It means asking for the raise, charging the higher rate,

3:30 building the thing on the side, having the conversation you've been avoiding.

3:33 That's why most people optimize for the smaller number.

3:36 But if you're watching this, you're going to do both from now.

3:38 So, if income is the lever, the question now becomes,

3:42 what happens when it actually starts going up?

3:44 Because here's the trap that most people fall into.

3:48 Most people earn more and then they spend more.

3:51 And a year later, that gap that we spoke about, it hasn't moved an inch.

3:55 And that's rule number three, the lifestyle creep detector.

3:58 In my first year in investment banking, I bought a white Audi A3 convertible.

4:03 It was secondhand, but still.

4:04 It was £15,000 in cash and that was 13 years ago.

4:08 So obviously worth more today.

4:10 And I paid it from the savings that I'd built up from working in retail

4:14 whilst I was at uni and also from the paycheck I was getting whilst in banking.

4:17 I told myself I deserved it.

4:19 I got the graduate offer that was very competitive and this was my reward.

4:22 I absolutely didn't need a new car.

4:24 I just wanted what I thought a graduate banker was supposed to drive.

4:28 A year in, a friend on the same scheme, same starting salary,

4:32 same year, used her version of that money as a deposit on a house.

4:36 And at the time, it felt like she was

4:38 being boring and that I was enjoying the job.

4:41 But looking back, I'd absorbed my pay rise into something

4:44 that lost value the moment I drove her home.

4:47 She put hers into something that has since doubled.

4:50 Same income for the same year,

4:52 two completely different positions from that money a decade later.

4:58 That's what's called lifestyle creep, and I've fallen into it.

5:01 And I'm not alone.

5:02 A study found that 26% of people

5:05 earning six figures still live paycheck to paycheck.

5:08 It's something that most people don't realize because it happens so slowly.

5:12 But rule number three is the lifestyle creep detector, and you need one.

5:16 A 10,000 payriseise feels like 10,000, but after tax is closer to 6,000.

5:20 If you absorb half of that into nice dinners, a better car lease,

5:23 a flat with one more bedroom, you've kept maybe 3,000.

5:27 That's 250 a month.

5:28 That pay rise was supposed to change

5:30 your life or bring you closer to financial security,

5:33 but instead you moved your gap by 250 a month.

5:36 And I don't want to pass on the message

5:37 that you should absolutely not reward yourself or treat yourself.

5:40 But I really, really recommend always making

5:43 sure that when your income comes up, make sure that that gap does widen.

5:48 You don't need to keep your cost exactly the same,

5:50 but you don't want it to increase in the same rate that your income goes up.

5:53 And it happens at every salary.

5:55 Every income bracket has its own version of normal.

5:58 The holidays people take, the cars people drive, the postcodes people live in.

6:02 The moment your salary crosses into a new bracket,

6:05 the new normal starts pulling at you.

6:07 And most people don't notice that they're being pulled until

6:10 the lifestyle is locked in and that gap is gone.

6:12 So the detector is one question.

6:15 Every time your income goes up, ask, did my gap go up with it?

6:19 Not your spending, not your lifestyle, the gap from rule number one.

6:22 Because earning more only matters if more of it stays.

6:26 And once more of it stays, the next question is what you actually do with it.

6:30 And that is rule number four.

6:32 This video is sponsored by Shopify.

6:34 I created my first business on Shopify.

6:37 And what surprised me was how quick it was to get started.

6:41 I didn't have to figure everything out from scratch.

6:43 It was all in one place.

6:44 And honestly, that's what gave me the confidence to actually get

6:48 started in the first place because Shopify takes all the guesswork out.

6:52 and your products get discovered everywhere people are already shopping.

6:55 Google, YouTube, Tik Tok, even chat GPT.

6:57 And when someone's ready to buy, Shop Pay makes checkout one click,

7:01 which means fewer abandoned carts and more completed sales.

7:05 And for everything you're not an expert in, the analytics,

7:08 the copy, the promotions,

7:10 Shopify's AI co-founder Sidekick handles it so you can focus on the fun stuff,

7:15 the creative stuff, the stuff you actually started a business to do.

7:19 So, if you've been sitting on an idea,

7:21 go to shopify.com/nisher to start your free trial today.

7:26 That's shopify.com/nisha.

7:29 Rule number four, spend on what compounds, not what decays.

7:33 Here's a rule that took me years of earning well to actually understand.

7:37 Every pound or every dollar you spend is doing one of two things.

7:42 It's either compounding or it's decaying.

7:44 Nothing stays still.

7:46 And most people spend the majority of their money

7:49 on the wrong side of that line.

7:50 Decaying is what most spending looks like.

7:53 The car loses value the second you drive it off.

7:56 The clothes go out of style.

7:57 The takeaway is gone in 20 minutes.

7:59 None of that is wrong.

8:00 You are absolutely allowed to enjoy your life.

8:02 But understand what it is.

8:04 You are exchanging money for something that will be worth less or nothing.

8:09 You might enjoy it in the time,

8:10 but that doesn't take away from the fact that that money is decaying.

8:13 Compounding is the other category,

8:15 and it's the one that nobody teaches you to look for.

8:18 A $200 course that lands you a 5,000 pay rise.

8:22 A $40 book that changes how you think about your career for the next decade,

8:26 $1,000 laptop that makes you two times more productive,

8:30 the gym membership that makes you a lot more healthier.

8:32 These don't feel like investments at the till.

8:35 They feel like spending, but the return curves up instead of down.

8:40 And here's the question that will really change how you spend.

8:42 and look at it from this lens.

8:44 In 5 years, will I still be glad that I bought this thing?

8:47 If the answer is yes, it's probably compounding.

8:50 If you can't answer the question, it's probably decaying.

8:54 That single filter applied consistently redirects thousands

8:58 a year towards things that actually move your life.

9:01 And just remember that compounding spending doesn't have to be financial.

9:05 As we've discussed, it doesn't have to be stocks, property, investments.

9:07 It can be on spending on things that pay you back in other ways.

9:10 A coach, a house cleaner, a meal planning service,

9:13 a mentor, a flight to be in the right room.

9:15 The bills that bill might look expensive in the moment,

9:19 but that return over time can make it a very cheap purchase in comparison.

9:24 Rule number five, build one asset that earns while you sleep.

9:28 Think about how a salary works.

9:30 You trade an hour and you get paid for an hour.

9:32 If you stop trading hours, the money stops.

9:35 There's a hard ceiling on how many hours you have and there's

9:38 a hard floor on how little sleep you can survive on.

9:40 That's the maths of every job, every freelance gig, every consulting day rate.

9:44 Time in, money out.

9:46 The moment you stop, that income stops.

9:48 An asset breaks that maths.

9:50 An asset is everything you build once that keeps paying you.

9:54 It's a course that you record in a month and sell for the next 5 years.

9:57 It's a book that sells on for years.

9:59 It's a YouTube channel.

10:00 It's a rental property.

10:02 It's a piece of software.

10:03 It's equity in a company.

10:04 The work for most of these is front-loaded.

10:07 The income isn't.

10:08 I want to explain how this looks like in numbers.

10:10 If you spend 100 hours building something that earns you 500 a month,

10:14 that's 6,000 a year for hours you've already worked.

10:18 Year 2 is still 6,000.

10:20 Year three is the same.

10:22 By year five, you've earned 30,000 from that initial 100 hours of work.

10:27 That's 300 an hour and it keeps going.

10:30 No salary on earth pays like that because no salary is detached from your time.

10:34 I'm always encouraging people and talking about on this channel

10:37 ways to earn money outside of your day job.

10:40 One person in my community, they were also challenged by our business

10:42 coach to get started on their YouTube channel

10:45 and just get to 250 subscribers by the time they come to the next coaching call.

10:49 And I kind of had a homework uh from you

10:52 to reach out to reach um to achieve uh 250 subscribers.

10:58 Um, I now I now have 1,000.

11:04 She came back with 1,000 subscribers and it took

11:06 her 3 months and now she's on her way to monetize.

11:09 That's 3 months of going all in and now she could potentially scale that

11:13 within your next couple of videos.

11:16 Maybe if you had an idea about, I don't know,

11:19 a a checklist um or a PDF guide or a quiz or something

11:24 like that that you think would add value to your viewers's world,

11:28 but they would be willing to part ways

11:30 with their email address and their name at the very least.

11:34 Um and then you can then get them into an email list, a simple email list.

11:38 So, um my personal favorite is kit.

11:41 By the way, if you want to know more about

11:42 this community or learn more specifically from this business coach,

11:45 Robin, I've linked his book and the membership in the description.

11:48 We currently have a promotional and you can find all the details below.

11:51 So, if you've earned more, you've protected the gap,

11:53 you've spent on what compounds and build

11:55 something that pays you when you're not there,

11:57 you've already done more than 95% of what most people will.

12:02 But there's one rule left,

12:04 and it's the one that nobody teaches because it's not a tactic.

12:08 is the thing that all five of the other rules depend on.

12:12 And rule number six is stay around money longer than feels comfortable.

12:17 As the saying goes, if you're the smartest person in the room,

12:20 you're in the wrong room.

12:21 And one of the biggest predictors of wealth,

12:23 it isn't intelligence, it's proximity.

12:26 It's who you spend your time around.

12:27 It's what's normal in the rooms that you're in.

12:29 And most people leave those rooms too

12:32 early because staying in it feels uncomfortable.

12:34 Every income bracket has its own version of normal.

12:38 In one room, a 30,000 salary is the goal.

12:41 In another, it's the floor.

12:43 In one room, owning a home is the dream.

12:45 In another, it's the starter move.

12:47 In one room, building a business is risky.

12:49 In another, not building one is risky.

12:52 But the room you spend the most time in is slowly going to become your ceiling.

12:58 Your standards will calibrate to the people around you.

13:03 And it's not that you should stop spending

13:05 time with the people you're hanging out with.

13:07 It just means you need to open up doors to other

13:10 rooms where the possibilities of what you can achieve are different.

13:14 And this is probably harder said than done because when

13:16 you walk into a room where everyone earns more than you,

13:18 builds more than you, knows more than you, your first instinct is to leave.

13:22 It feels like you don't belong, like you're behind,

13:24 like everyone can tell that you're not where you're supposed to be.

13:28 So, you go back to the room

13:29 that you're comfortable in, where you're the smartest person,

13:31 where the conversations make sense,

13:32 and your earning capacity stays exactly where it was.

13:36 Some of the most successful people I know didn't avoid that discomfort.

13:39 In fact, they pushed into the rooms where they felt out of place,

13:42 whether it was the conference,

13:44 the dinner, the job, the friend group, the industry,

13:46 long enough for that standard to become their standard.

13:50 Long enough to learn what those people knew.

13:52 Long enough that six figures stopped sounding like a lot

13:56 of money because nobody around them was talking like it was one.

13:59 This rule is so often overlooked, but it is one of the most important

14:02 on this entire list because you can know the wealth equation.

14:05 You could focus on your income.

14:06 You could dodge the lifestyle people.

14:07 You could spend on things that compound and build an asset.

14:10 But if you don't have that community around you,

14:12 if you aren't around people who also want

14:14 to be better with money, grow their wealth,

14:16 are comfortable with talking about money,

14:18 then it does make it so much harder to keep

14:20 up the momentum and the consistency to want to achieve more.

14:24 That is it.

14:24 Thank you so much for watching.

14:25 If you like this video, I've also made a video that covers most

14:28 things that you need to know about money.

14:29 It goes deeper into the how behind every rule you just learned.

14:32 I'll link it right here.