The Top 7 Money Making Hacks For 2025 That Are PROVEN To Work!

Steven Bartlett | The Diary Of A CEO (DOAC)| Topics: finance, investing, financial freedom, wealth creation, personal finance

Video’s main points

The video discusses essential strategies for achieving financial freedom, emphasizing the importance of starting to invest regardless of income level. It highlights the value of investing in a diversified index fund and suggests creating a habit of automatic savings. The discussion also covers the significance of financial education and the pitfalls of chasing wealth without proper knowledge, including getting sucked into get-rich-quick schemes.

Understanding Financial Freedom and Security

Achieving financial freedom and security is a goal for many individuals, especially at the start of a new year. The desire to build a secure financial future often sparks the decision to make New Year’s resolutions related to money, finance, and investing.

Key Principles of Investing

• Investing as a Universal Option: Contrary to popular belief, anyone can start investing, not just the wealthy. Recognizing this can shift the mindset towards wealth accumulation.
• The Importance of Diversification: An effective path to financial security is through diversified funds, like index funds or target-date funds, which automatically balance risk over time.
• Automatic Savings: Establishing a habit of automatic transfers into your investment accounts each month fosters steady growth of wealth.

Simple Steps to Start Investing

For beginners, the **simplest starting point** is to set up a target date fund. This single investment keeps your portfolio diversified as it automatically shifts your asset allocation based on your target retirement date. For instance, if you plan to retire in 2050, you would choose a fund like the Vanguard 2065 fund, where you can simply put in money each month without worrying about selecting individual stocks.

Investment Maintenance and Tracking

Investing should be treated like a long-term project, similar to cooking. Once you’ve made your investment (like putting a turkey in the oven), allow it to grow over time. Checking your investments should occur only a few times a year, as frequent monitoring often leads to unnecessary anxiety and potential rash decisions.

Creating a Sustainable Investment Habit

The process of building wealth via investments requires discipline and the establishment of a consistent savings habit. Aim to invest 5-10% of your take-home pay, gradually increasing the amount as your financial situation improves. Setting up an automatic transfer from your checking account to your investment account allows you to invest seamlessly.

The Long-Term Strategy: Compounding Returns

One of the most powerful concepts in investing is the power of compounding. Small, consistent investments can lead to significant wealth over time. For example, investing just $5,000 a year with an average annual return of 7% over 30 years could result in a substantial nest egg due to the compounding effect.

Changing Your Financial Mindset

The biggest obstacle many face on their path to wealth is ignorance and the lack of proper financial education. Understanding where you stand financially and making informed decisions about your money will serve to enhance your overall financial health.

Recognizing the Benefits of Index Funds

Investing in index funds can provide reliable returns with less risk than trying to pick individual stocks. The average market return over the long term typically hovers around 8%, making index funds an excellent choice for newcomers.

Avoiding Common Financial Pitfalls

The urgency to accumulate wealth often leads individuals to gamify their investments or follow trends rather than sticking to solid investment strategies. Avoiding the temptation for get-rich-quick schemes and focusing on steady, disciplined investing is key to long-term success.

The Importance of Financial Education

Investing in your financial education should be a priority. Continued learning about financial principles, investment vehicles, and market conditions will empower you to make better decisions for your financial future.

Conclusion: Your Route to Financial Independence

Taking the first steps towards investing does not require vast sums of money or special qualifications. By focusing on consistent investments, understanding compounding, maintaining a long-term perspective, and prioritizing financial education, anyone can achieve their money goals and work towards financial independence by 2025.