Here are five of the biggest wealth killers that are preventing you from achieving financial freedom. Starting with a car, which is one of the sneakiest wealth killers because there are a lot of hidden expenses. In 2024, the average price for a new car was a little over

$47,000. Now, this initial cost is pretty obvious, and you'll be reminded of it every single month that you pay your bill, which—fun fact—in 2023 hit a record high of $739 a month. But two expenses that many people don't notice are that a new car

loses about 20% of its value in its first year and up to 60% by its fifth year. Which means if you buy a new car of around $47,000, there's a good chance that its actual value will be worth less than

$23,000 after five years. And if you're thinking, 'Hey, at least I can sell or trade in my car to recoup some money,' but studies are showing that many Americans are falling victim to the negative equity loop, which is basically when you owe more money on your car loan

than the car is actually worth. So, for instance, if you're eyeing a new car that's worth $30,000 and your current car is worth $10,000 because of depreciation, but you still owe $12,000 on it because of the loan, then your trade-in value is

actually going to be negative $2,000. The car dealer is going to roll this negative equity into the new loan, so they'll give you a loan for $32,000 for the new car, meaning you're going to owe the cost of the new car and

Associated fees, plus whatever you owed on the previous car. This is pretty much how people who trade in cars every two years get in trouble; they continue to roll more and more negative equity until they're borrowing $60,000 for a $40,000 vehicle, and then the monthly

payments end up crushing their monthly cash flow. Now, depending on where you live in the US, you need a car; there are a lot of places where public transportation is terrible. So the last thing I'm going to tell you to do is not get a car, but the 2410 rule is what

you should follow to make sure you don't kill your wealth while doing so. So whether you have a car, you're thinking of buying a car, or you know someone else who's in that position, make sure you follow the 2410 rule to determine how

much car you can actually afford without destroying your wealth. First, the 20 is your down payment: you should be able to put at least 20% of the car's price down from the very beginning. Some lenders will allow you to put less down, but to that

you should say, "Absolutely not!" because the lenders, they're just going to charge you a higher monthly payment to make up for the lower down payment. This is a really bad idea in the long run; generally, the more you can put down from the start, the better. Next, the four is

the 4-year limit. Try not to agree to financing terms longer than 4 years because the longer you let the loan run on, the more you'll end up paying in interest. For instance, even with the same loan amount and interest rate, going from a 4-year loan to a 7-year loan increases

The total payment you'll have to pay is more than $5,000. Sure, the monthly payments are a bit smaller, but you'll end up paying a lot more money. Next, aim to spend 10% or less of your gross monthly income on car expenses like loan payments,

insurance, and maintenance. And if you can't follow the 10% rule, then there's a good chance that car might not be for you. Next is divorce. It's common knowledge that about half of all marriages end in divorce, and to put that into perspective, that's one divorce

approximately every 36 seconds. Now, obviously, the emotional impact is huge, but since we're a finance channel, we're just going to be focusing on the financial toll because divorces can make you broke. Studies show that you're actually more likely to be poor

if you're divorced. The poverty rate for married folks over 62 who never divorced is only about 3.4%, whereas 16% of single people divorced before age 50 are considered poor, and 19% of single people divorced

after 50 are considered poor. And there are some surprising reasons for this. First, the average cost of a divorce in the US is around $1,458 per couple in legal fees alone, and that's only the beginning. If children are involved, the cost can

increase by 36% to $26,990 per couple. Meaning, while divorce is one of the top wealth killers for the average American, it's also one of the top wealth creators for lawyers. But in states like California and New York, legal fees, on average, per person,

can run up to $119,000 or $38,000 per couple. Second, there is also child support. According to the US Census, 361,000 taxpayers claimed that they paid a total of $9.6 billion in alimony in 2015, which comes down to an average of

26,592 per person. At the same time, nearly 50% of custodial parents don't receive full child support payments, and about 33% don't receive any child support at all. Which means finances are strained after a divorce for both individuals. It's a lot of money. And third, there's

retirement. When you get a divorce, one of the many things that get divided up is your retirement account. And the process of dividing these accounts, like your 401k, your IRAs, and your pensions, is a lot of work. The process usually requires something called a Qualified Domestic

Relations Order, or QDRO. And getting this piece of paper can cost anywhere between $500 and $3,000 to draft and implement. And if you're like, 'Screw it, I'm just going to withdraw the money and split it,' you're going to face some hefty

penalties—at least 20% in penalties for early withdrawal—and then there's taxes and other fees that you have to take into account. Next, high-interest debt. 77% of American adults are in debt, and this is just something we've accepted as the

norm. One of the worst things about debt is that it strangles your monthly income. And I'm not just talking about the usual suspects like credit cards; I'm talking about all kinds of debt with interest rates over 7%. There's car loans and

Student loans and more. I ain't discriminating here. Most of the time, you'll hear that debt is either good debt or bad debt, depending on what you're using the money for.  Taking out a student loan is generally seen as more acceptable than using a credit card

debt to buy pineapple pizza. While that's partly true and depends on what kind of pineapple pizza you order, it's actually more important for you to understand the economic concept of opportunity cost. Let's say you have $10,000 cash on hand,

and you have two options to use it: either you completely pay off your $10,000 credit card debt, which has a 20% interest rate, or you invest $10,000 in the stock market, which let's just say has a 7% average annual return. If you

choose option two, which a lot of people tell you to do—just invest your money for the long term—then in one year your credit card debt will grow to $12,000 since you didn't pay it off. But on the other hand, your investment portfolio would total

$10,700, assuming again the average return of 7%. The problem is, with option two, you're effectively earning $700 from the stock market, but you're losing $2,000 to credit card interest, which puts you $1,300 behind compared to if you chose

option one. This doesn't absolutely mean investing the money was the wrong move; it just means that the opportunity cost was greater, and you would have been better off if you chose the other option. Basically, if the typical returns from investing in the stock market are around

7%, that means holding onto debt that grows at a faster, higher interest rate will effectively cancel out any potential returns from investing. So your financial AI is better off if you prioritize paying off debt that has a higher than 7% interest rate.

Secondly, when it comes to credit cards, I know online shopping gets a bad rap, but honestly, sometimes you just have to buy something.  Which is why one thing I religiously do now whenever I buy stuff online is I always double-check that I'm

getting the best deal with this extension called Rakuten. It's 100% free to use and it automatically gives you the best cashback, the best coupons, and the best promo codes for free for over 3,500 stores like Apple, Nike, and Adidas. Like some time ago, I bought the Apple

AirTag for $111 directly from Apple, and it was really easy. I just logged on to Rakuten, went to the Apple Store, added the AirTags and keychain to my cart. Total was $41.95. Rakuten had a $30 sign-up bonus

for new users, a 2% cashback, and I used my Apple Card to buy it for another 2% cashback. So in the end, I only paid $111 for a brand new pair of AirTags and a keychain. I've actually talked about

Rakuten in my past videos a lot, so I decided to finally reach out to see if they wanted to sponsor a video and give you guys some freebies, and they said yes. So if you're a new user and you sign up with the link below, you can get a $30

Sign-up bonus for free! I'm not sure how long that sign-up bonus is going to last, so check it out sooner rather than later. Pro tip: If you plan to buy anything on Black Friday or Cyber Monday, just click the link below, sign up, and get the

free $30 sign-up bonus now, and then just use it for that. The next wealth killer is buying a house, and this might come as a surprise because everyone says a house is a good investment. But the problem is many people are buying houses they can't afford. 21% of homeowners are

considered "house poor," meaning sure, they might own a home, but most of their income is going towards their home expenses, such as their mortgage, utilities, repairs, and leaving little to no money left over. So yeah, you might have a house, but you're living off canned beans and ramen every single

night. The issue is very few people carefully run the numbers. Instead, most people make the biggest purchase of their lives based on what they think they should do, based on how they feel, based on what they have been told by some random person. Unfortunately, these expectations and

myths surrounding renting a home versus homeownership are so heavily baked into our culture that almost everyone believes that owning a home is always infinitely better than renting, which is why so many people buy a house when they're not even ready for it. But

luckily, there is a rule to prevent this from happening: the 28/36 rule, which states that no more than 28% of your gross monthly income should go towards housing expenses. This 28% doesn't just mean your monthly payment; it's also the

anticipated repairs, the gas furnace heat, and your home insurance that you're required to have. Ideally, you would be a little lower than 28%, so you'd have some margin in case anything goes wrong. Now, there are a few exceptions to this rule, like if you live in a super high cost of

living area like New York City, LA, or San Francisco. Again, some people stretch that number even a little higher, but again, the higher you go, the more risk you're going to take on. Next, no more than 36% should go towards all your debt payments

combined. That means factoring things like your credit card debt, your student loans, your car loans—everything. The more debt you have, the more strain and risk that you put on your finances. And you should have at least 20% as a down payment, and there are two reasons for this:

one, if you put less than 20% down, you're going to have to pay PMI, or private mortgage insurance, on top of your monthly expenses. Second, it shows that you have built the habit of saving, which is really important because you're going to need to save a

lot because of a lot of unexpected expenses when it comes to home ownership. And if you can't get into the habit of saving up now, that might put your entire house at risk if something does pop up in the future. And look, if these numbers don't make any sense based on

where you live and you don't want to move, then renting might be the more financially responsible option. Next, procrastination. Now, this might not seem obvious because you're not getting a monthly bill for it, but it's one of the main reasons that hold people back from

Achieving financial freedom, whether it's putting off investing, not saving for retirement, or avoiding paying off your debts, procrastination can cost you significantly more than you realize. The reason for this can be described as what Warren Buffett called the eighth wonder

of the world, and it's surprisingly simple to understand. This concept will literally change how you perceive money and wealth. Many people think that if we just save $100 in the first month and then another $100 in month two and so on—that we're just adding $100 every month

to our net worth. Naturally, this would mean that after a year, or 12 months, we'd have $1,200, and after 10 years we'd be at $12,000. But that's not how this works. Our money can grow exponentially rather

than linearly because of compound interest. So, in simple terms, compound interest works like rolling a snowball down a hill; as it rolls, it continuously picks up more snow, gathering more momentum, and it gets bigger and bigger. So if you invest $100 every month into

something like the S&P 500, and we assume a 10% rate of return, then after 12 months you'd have $1,367; after 10 years you'd have $12,755. Now I bet you tree fiddy that this next part is going to surprise you.

Okay, so what many people don't realize is that time is more important than the amount you invest. For instance, if you have two people—Person A and Person B—and they're both 25 years old; if Person A starts investing $5,000 every year at

Age 25 and they stop contributing at age 35, he would have contributed a total of $50,000 over 10 years. On the other hand, person B waits until he's 35 years old to start investing. At 35, he's going to

start investing the same amount, $5,000 every year, but this time he's going to continuously invest until he's 65. Meaning person B is going to contribute a total of $150,000 over 30 years. If we assume an average annual return of 7%, here's how

their investments grow. By the time they're both 65, person A would have a little over $62,000 after contributing money for just 10 years. Person B would have almost $541,000 after contributing for 30 years. Yeah, pretty shocking! So, despite person B

contributing and investing three times more money for a longer period of time, person B still has around $61,000 less than person A because he missed out on those crucial early years of compound interest. Meaning it doesn't really matter if you can only invest

$2,000, $1,000, or $100 a year. You don't need to be rich to start investing; you just need to start. But look, I get it; it can be really confusing in personal finance to know the right next step for you. So, if you aren't sure and you don't

want to procrastinate anymore, I created a free five-question quiz that, based on your answers, will customize a personalized money plan for you. If you're interested, you can take the free quiz with the link below. Next, taxes. While you don't think of it much, taxes

are going to be one of the largest expenses you experience in your lifetime, and while it's inevitable, there are smart ways to legally lower your tax bill in 2021. The average American paid around 15% of their income in federal taxes, and this doesn't include state and

local taxes. And while 15% doesn't seem like a big number, it's actually pretty substantial if you're trying to build wealth. I realize there's a very common misconception that the more money you make, you think you're going to pay more in taxes. Like three years ago,

my friend told me that he was literally going to turn down a pay raise because he said, and I quote, "It's going to put me in a higher tax bracket and I'll have to pay more in taxes." But this is the biggest misunderstanding people make

about taxes. Like, in the US we use this thing called the progressive tax system with marginal tax brackets. I mean, it's really fancy, but basically, the more income you earn, the higher the tax rate you pay. But the higher tax rate doesn't apply to your entire income; for instance,

let's just say the tax brackets are: you pay 5% taxes up to $50,000, 10% up to $100,000, and 15% above that. So if you make $200,000, the first $50,000 of that

is taxed at 5%, the next $50,000 is taxed at 10%, and the final $100,000 is taxed at 15%. So earning more money and moving up a tax bracket doesn't lead you to actually making less money. The easiest

One way to reduce your taxable income is with qualified plans. The most common plan is the 401k plan offered by most employers, and some other plans and accounts you can check out are health savings accounts, or HSAs, traditional IRAs, and the 457(b) plan. There are more

advanced strategies you can do, such as tax-loss harvesting, itemizing property deductions, and more. If you're interested in that, let me know, and I'll make a video on that in the future. And that brings me to something that you've got to start believing: there are many ways to achieve

financial freedom, but in order to get there, you obviously have to adopt smart money habits. And there are, without a doubt, some habits that are more effective than others. So if you really want to build your wealth, click here to discover my 12 tiny habits that I do

The 5.5 Wealth Killers That No One Talks About...

Hi, I'm Vincent! I'm on a mission to help you live a wealthier and healthier life.


The 5.5 Wealth Killers That No One Talks About...

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