What's up you guys, it's graham here, so i want to start this video off on a bit of a serious note, because if economic growth begins to slow down, inflation persists and stocks head for a bear market, it's more important than ever right now to make sure You're putting your money to its best use, even though we all want to believe that now is a great time to buy. Everything is on sale. Everything is getting cheaper, which is true. That won't be the case if prices keep falling credit, tightens up interest rates increase and then you have nothing left to buy the dip with.

So that's something that i really think needs to be addressed in this video and why it's so important that you watch this all the way through. So with that said, here's exactly what you should be doing with your money right now how to protect it against market fluctuations and the best way that you can take advantage of the current market as soon as you subscribe and hit the like button for the youtube Algorithm, that's it as soon as you do that the video is going to start as soon as you do it any minute now. Thank you guys so much and also big, thank you to public for sponsoring today's video, but more on that later. First, i would say the most crucial thing that you could do is report your venmo transactions to the irs just kidding, but seriously i'll make a video commenting on this soon, because the first thing that you should do is reduce your spending now.

This is something that i've been saying non-stop here in the channel for the last five years, regardless of what's going on with the stock market, but especially now, this is more important than ever. The more money is saved today. The more money you're gon na have left over and the more money you'll have to invest with during times when the market's down. So if you're brand new and you wan na, know exactly what to do step by step from start to finish, here's what i recommend! First immediately go and sign up for a budgeting software like mint.com or personalcapital.com.

The second you're going to link your accounts and then review all of your spending throughout the last 60 days, which i guarantee is going to be a lot more than what you would expect seriously. The majority of us are all going to have small, unnecessary expenses that just constantly fall through the cracks so being able to look through. Your spending is going to allow you to identify those charges and put them in one of these two categories. The first part is going to be your mandatory expenses.

This could be your housing payments, your health insurance payment, your food payment and so on. The next part two is going to be your discretionary spending. This is meant to be everything you want to have, but you don't necessarily need it like. Do you need to spend 69 a month on only fans.

Do you need to spend 100 a week eating out at restaurants? My recommendation is that you go through these last 60 days and itemize everything that you spent money on, that you didn't absolutely need and then you're gon na do the unthinkable and add it up. Trust me, if you actually don't do this, i nearly guarantee you're gon na wind up saving an extra few hundred dollars a month using this one trick that credit card companies hate. But after that part three, i want you to cut back on all the discretionary non-essential spending that you know you could live without to me. It's gon na be a little bit like going on a personal finance diet, except it's a diet that should get you in better shape financially now, just like with any diet.

The key to this is consistency, so the best way to implement this is to immediately cancel all the subscriptions. You don't actively watch and then monitor your budgeting software daily to see your spending in real time. It's almost like logging. Your exercises at the gym, except instead of curling weights you're beefing up your bank, account and then part four you're, gon na, add up the difference.

Doing this is all about identifying what you don't absolutely need, cutting back on what doesn't matter and then having more money. Left over to invest with the last two months of your spending are going to reveal a lot about your unconscious spending habits and the first phase of saving more money during a turbulent time is to be able to recognize those charges and then cut back. But then, after that, we could go on to the second phase of the video, which is second start saving. Once you get back on all of this unnecessary expenses, you're going to have to do something with all that money you have left over.

So here's where it's going the first most important use of that money is building up an emergency fund. This is basically going to become your insurance policy. In the event you lose your income. You can't afford to keep up with your mandatory expenses.

Don't want to sell your investments at a loss and need something to fall back on. Ideally, your emergency fund should last you anywhere between three and six months, but if you're paranoid like me, you could go all the way up to nine months, just in case now. In terms of where to put your emergency funds, you want to put it somewhere safe that preferably pays you an interest rate at the exact same time and that's what brings us to the high-yield savings account now i have tried pretty much. Every single, high-yield savings account in existence and, i have to say, i've been thoroughly impressed with ally bank who's, currently paying a half a percent interest rate on your money.

I know it's not much, but still it's higher than wells fargo. The second, in addition to this, since savings accounts, are paying so little. I've also seen people deposit a portion of their emergency fund in stable coins that are paying anywhere from six to 14 interest. How is this possible? You might ask well typically, when you deposit your money in these platforms, they're going to take that money and then lend it out to retail and institutional investors at an even higher interest rate than they pay you.

It's no different than me saying. Give me your money, i'll pay, you a five percent interest rate and then i could go and lend that out to someone else at eight percent and profit the difference. However, you should be aware that, even though you can make a lot of money doing this, it's not exactly risk-free stable coins are not as strictly regulated or backed by fdic insurance and there's very little transparency into the inner workings of these tokens. So if something happens, there's a small chance that all your money is gone, there's also the chance, the crypto market collapses or you become too reliant on an exchange who could halt, withdrawals or transactions at any time with no notice, at which point you got ta reach.

Customer service, which good luck. The entire point of this step is just to keep your money easily accessible, liquid and stable during a time where you might need it, and even though stable coins bridge that gap perfectly they're, not as protected as a traditional bank. So when it comes to myself, i keep my emergency fund in several high-yield savings accounts spread throughout multiple banks. So that way, if something ever happens to one of them, i'm never over the fdic insured limit and i can mitigate my losses as best as possible and to better help against those losses.

Here's the next step that i would recommend to protect your money and keep as much of it intact as possible, but before we go into that, since we are talking about the best things that you could do with your money, one of the most important aspects of Building your wealth is working with a brokerage who always puts the customer first and that's why i'm really proud to stand behind today's sponsor public.com, if you're not familiar with them, they're one of my favorite investment platforms, because not only do they not route and sell your Order flow to high-frequency hedge funds, like some other investment apps, do, but they also incorporate an optional social aspect into the entire experience where you can make a profile talk with other like-minded investors or you could follow me on there, because i post some of my own Stock picks and my thoughts about what's going on with the market. They have an amazing interface, that's incredibly easy to navigate it's very simple to use and they allow fractional investing at the exact same time plus you could easily set it up so that they could automatically reinvest the dividends for you, allowing your investment to continue to grow And compound over time, without any additional work on your end, not to mention best of all is a way to show their appreciation for trying them out. Public wants to invest in you by giving you a free stock net worth all the way up to a thousand dollars when you use the code gram and sign up using the link down below in the description or you could just go to public.comgram. So, thank you guys so much.

Let me know which free stock you get and now with that said, let's get back to the video all right so after that. Third, the next thing that you should do is maintain or increase your income, if at all possible right now. I really believe that you should go above and beyond. With your work maintain the best relationship you can with your boss and co-workers and make yourself as indispensable as possible again, these are all things that you should be doing at any time, but given the uncertainty in the market right now, it never hurts to be reminded That your main source of income should be prioritized now is also the time to take on additional work to give yourself a buffer in the event prices go down and you need additional money to buy the dip when jerome powell's money printer stops working.

Now. Personally speaking, i do regret not having worked even harder and taken on more real estate clients from 2009 to 2013. Just so, i would have had more money left over to take advantage of low prices. Obviously hindsight is 2020, but going through that experience definitely gave me the perspective that money earned during times like this, when the market's down could be very, very valuable, and even though we don't know exactly when the market's going to recover, having more money available right now Is never going to hurt also, i just want to mention that if you have any high interest rate debt like a credit card or a personal loan, now is the time to pay that off.

So you don't accrue any additional interest that makes your situation worse than it needs to be. Here's my thinking paying off a 20 interest rate credit card is essentially the same thing as you getting a 20 return on your money and that's really really good, not to mention, even in the event that you pay off your card and then you need the money Afterwards, for something, you could always put that spending back on the credit card in a worst case scenario as cringe as that is for me to say, and if you don't end up ever needing it well, at least you paid off your credit card and you're saving A lot of money in the process and fourth because the stock market is pretty much acting like it's had too much my coffee and we don't know how long this panic is gon na last, once you've made sure your job is secure. Your emergency fund is in place and you maximize the amount of money that you're able to make now is the perfect time that you should begin consistently investing back into the markets. Now here's the thing if the market keeps going down over these next few weeks or months.

I know people are gon na say, but, graham you were wrong. The markets just kept going down. You should have shorted it instead and hey. You know what there's a chance of that and there's a chance that things just keep falling for a very long time, but i also know from experience that if i say this and the market thing goes up, people are gon na, say wow, graham called it.

We shouldn't panic, like he said things were so right, i'm glad i invested. So all i'm getting at is that no one knows what the market's going to do. No one knows if the market's going to go up 5 tomorrow or down 5 tomorrow or both apparently, which has been happening a lot lately. All of us could just make an educated guess, but at the end of the day, it's just a guess.

Some days you're going to lose money some days, you'll make money, but over time things will return to normal and carry on as usual, and that, of course, is going to be the point where you'll have been very happy. You had invested. So if you want to protect the value of your money long term, i highly recommend you do this with your money over the next year. The first would be a roth ira that allows you to contribute 6 000 a year and anything you earn within.

That account is completely tax-free by the age of 59 and a half. The reason i like this so much is because in a way could almost double as your emergency fund, in the sense that any money you contribute to, that account could be taken out at any time without any penalty. So if you invest six thousand dollars in the account, and then you realize that you need that money a few months later, you're able to take it back out. However, the only downside is that, once you take your money out of the account, there are very strict regulations about whether or not you could actually put the money back so potentially consider this as a great way to double as your emergency fund and get to invest.

At the exact same time, the second, you should also look into contributing to a 401k as well. This is another retirement account that lets you, invest, pre-tax money and then you're taxed on that money. Later after the age of 59 and a half for example, if you invest 500 a month into a 401k you're going to be taxed as though you're earning 500 less in your paycheck, that saves you money upfront and allows you more money left over to invest that You would otherwise have to pay to taxes now. From my perspective, the 401k makes a lot of sense if your employer offers what's called a 401k match.

This is when they match your contribution dollar for dollar up to a certain amount. Essentially, this means you're. Doubling your money immediately with no risk whatsoever, the rule of thumb when it comes to doing this is that you should always do it, no matter what in fact, don't even hesitate, just invest whatever you need to to max out the 401k match. Always and third, you could also look into investing in what's called an hsa which stands for health savings account.

This is probably one of the best known secrets out there, even though it's not really a secret, it's just nobody ever talks about it. Now there are some guidelines you have to follow and a quick google search will tell you whether or not you qualify, but in the event that you do, you could invest another thirty five hundred dollars completely tax-free using this account. By doing this, you're not going to be taxed on the money, you contribute to the account. So that's tax-free you're, also not going to get taxed on that money that you spend on health-related expenses.

So that's also tax-free. It's pretty much like you're able to get a write-off and then spend that money and then not be taxed on the money that you spend on health-related expenses that we're all gon na have at some point anyway. So again, if you qualify, there's no reason that you should not be doing this with your money, especially now when the markets are down as far as what you could be investing in to protect your money within these accounts. Here are my thoughts.

One could be a small portion of cash. This is just the money that you're going to keep on the sidelines, to be able to take up any good buying opportunity that you see, i'm not going to tell you to go all cash or wait for the bottom, because no one knows when that's going to Be but i do think that it could be a smart conservative choice to keep a little bit of money in the sidelines just in case you see something the second, you also have the typical index funds, which is where i'm investing the majority of my money. Right now, historically, an investment like this over the last 100 years has returned about seven to eight percent annually, adjusted for inflation with dividends, reinvested. I know that now seems low compared to the craziness that we've seen over these last two years, but come on long term.

The markets are not going to be increasing at 20 annually, so it's best to ride the entire market as it goes up and not try to impress your friends over at wall street bets. The third, like i mentioned before some investors, are hedging their position with cryptocurrency and i think, with a small portion of your portfolio. It could be worth looking into. In fact, fidelity found that even just a five percent allocation to bitcoin would have boosted the cumulative return of a traditional portfolio by 65 since 2014, even despite the sell-offs along the way.

Now that does not mean go and yolo everything to crypto, but it does mean that a three to five percent allocation could give you more diversification, long term. In the event, the prices begin to rebound the fourth, i know it's boring but diversify. You should never be all in on one investment, one stock, one asset class or one thing: if you do you're setting yourself up for failure in the event that something happens, i know it seems cool, because it's an all or nothing approach that can make you several Hundred thousand dollars with a single paycheck but more times than not you'll, end up losing everything and wish you would stuck with the strategies that were almost guaranteed for success in fifth, i'm gon na say it again, but make sure you have an emergency fund on the Sidelines in cash at all times, to me it's more important than anything else in terms of preserving your capital and being able to weather through a downturn like what we're seeing because here's the thing it'll be a lot worse to sell your investments at a loss because You have to than it will be to keep an emergency fund on the sidelines in cash to draw from, in the event that you have to that's. Why, i believe the best way to protect your money is to stay employed.

Take on any additional work that you can cut back on your expenses and save the difference. So that way you could ride through whatever happens and come out ahead very profitable by subscribing and hitting the like button. If you have not done that already so with that said, you guys thank you so much for watching also make sure to add me on instagram and on my second channel, the graham stefan show i post there every single day and not posting here. So if you want to see a brand new video from me every single day, make sure to add yourself to that and then, lastly, if you want a completely free stock, that's now worth all the way up to a thousand dollars use the link down below.

In the description and sign up for public using the code, graham, you may as well do that it's pretty much like free money, so let me know which stock you get. Thank you so much for watching and until next time.