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Broke at 50 - What to do? (3 Steps To Retire)



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I got a pretty interesting email last

week from a viewer and the title of the

email read broke at 50 what should I do

I never responded to the email so I made

this video instead hey my lovely frugal

people welcome back to another video

hope you had a great week and today I

want to read to you this email that I

got from a viewer so it reads hey Andre

my name is John not his real name that

was a real name guys money was never a

driving force in my life I've moved

around and changed jobs as I got bored

like a lot of people retirement and

savings seemed like it was something

that would happen eventually and I

didn't care about having things as long

as I could pay rent eat and have some

cash on me I was fine when I was 35 I

ended up having a kid not planned and my

moving around stopped I found a job that

I've been with since and now I'm 50

broke and terrified my annual income is

50k a year living in Sacramento

California and 50k does not go far at

all

I have $500 in savings approximately

23,000 in a 401 K which I didn't pay

into as much as I should have and now

I'm living paycheck to paycheck how in

the world can I ever afford to pay rent

when I'm 65 or 70 years of age stalks

are new to me I'm trying to find as much

info on dividend investments as I can I

got a little overzealous and bought a

few stocks already do you think it's too

late for me to spend any extra money I

can find to invest would you recommend

going a different route so the good news

is that you're only 50 years old and I'm

not just saying that to make you feel

better because this next part won't and

that is that you have 15 working years

still ahead of you and there's a lot we

can do in the next 15 years to really

juice up those retirement savings and

get you where you need to be so first

thank you so much for reaching out and

asking me this question and secondly I

don't know the entirety of your

situation and at the other day

just a youtuber you may not want to

listen to me I don't know whether or not

you're married whether or not you

support your kids or your expenses are

or any other costly hobbies you may have

like paying for loot boxes on Star Wars

Battlefront 2 so with that preface out

of the way I'll give you my thoughts and

my advice to the best of my abilities as

far as what I would do if I were in this

same situation so let's get started

right away so starting with step number

one is I feel like what most guides are

missing and that is the money part so

step number one we need money come a

genius I'm done here that's a wrap

smash the like button subscribe and just

kidding

so we can do this one of two ways the

easy way or the hard way

now the hard way is probably the most

obvious which is just make more money

right boost your salary but that is

dangerous because you're risking what

little you have in a very potentially

competitive job market where there's a

lot of young whippersnappers like myself

who are willing to take a pay cut so

doing that is a little risky unless

you're absolutely confident in your

abilities so be careful when treading

that ground the easy way on the other

hand is something that I did when I quit

my job so basically I boosted my savings

by getting rid of all unnecessary

expenses and taking on some side hustles

so specifically here's what we do so

take a look at some of the smallest

things that you pay for right now but

you don't even think about I'm talking

about non essentials like your cable and

TV services the Netflix is that Hulu's

my patreon page so this is exactly what

I did when I left my job I had zero

income and I still had bills to pay and

I started to call around and

aggressively ask for competitive rates

on everything I paid for my car

insurance my health insurance my phone

bill my internet bill everything and I

know maybe you're thinking to yourself

laundry this is a waste of time but

you'll be so surprised just how much

money twenty dollars here and thirty

dollars there will add up so fast and I

saved a lot of money doing this but

Andre I don't have any of those

subscriptions I already live on ramen

noodles bro and so in addition to

calling around and asking for

competitive rates you can also start to

take up side hustles on the weekends

here's what I would do for these I

highly recommend taking on something

like Airbnb I did Airbnb as a super host

and I was earning roughly

nine hundred to a thousand dollars a

month which was almost enough to cover

my entire rent expense I know living in

Las Vegas has its perks and is worth

moving out here just for that reason

alone also no state income tax what up

but be careful if you don't own your

house because subletting is not allowed

but there's legal loopholes for that too

another one is uber or making deliveries

for post mates uber eats or Amazon and

the last pro tip for making some serious

extra cash on the side is being a

caregiver believe it or not my dad

actually did this it was a very

lucrative side hustle for him and

basically what it does is I believe it

uses an app and it connects you with

senior citizens who need help doing

their normal day-to-day activities and

there's very little upfront costs to

getting involved and you get licensed

relatively quickly and when that happens

you'll get paired up with somebody and

you'll get paid so it's kind of a cool

way to do some good for the world

something that's actually worth your

time and maybe you'll get to make some

old grumpy friends who farts sometimes

but seriously look into it it's actually

really good and step number two while

you're looking for those side hustles

and saving some money I want you to

smash that like button because that is

literally my health insurance and

speaking of I want you to immediately

look into and open up any employer

sponsored retirement programs true story

my parents who are in their early 50s

didn't open their 401ks until they were

about mid 40s and that's only because I

opened it for them in my early 20s which

i think is hilarious

and sad I do love my parents but the

point I'm trying to make is that I'm

intimately familiar with this situation

so if you haven't already opened up any

qualified employer sponsored programs

your 401 K s your Roth IRAs and get

started

put your money there immediately before

putting your money anywhere else and

that's because the rate of return on

that money is better than any other

investment you can find it is 100% rate

of return on your money so forget

investing in individual stocks forget

dividends put your money here first find

out what the limit is and max

out like a boss and also for health

insurance look into any HSA programs

that your employer might provide HSAs

are amazing think of them like your IRA

except they're also 100% tax deductible

lowering your tax burden and money that

goes into an HSA goes in tax-free

it grows tax-free and withdrawn tax-free

on qualified medical expenses and if you

somehow find yourself with having more

money in that fund than you can spend by

the age of 65 you can actually start to

withdraw from it like a traditional

traditional what is traditional

traditional IRA now as far as what to

invest in this can get really

complicated but it doesn't have to be

when I was doing this for my parents I

looked at the list that their company

provided and I was just blown away by

the complexity I saw everything from

small cap companies middle cap large cap

shower cap mushroom cap they have it all

so it doesn't have to be this

complicated when selecting a fund here

are some things to keep in mind the best

one that I would do for myself is

something like Vanguard retirement index

fund for a target date of 2035 that's

gonna give you a really great

diversification you'll be diversified

like a boss and the portfolio will

rebalance itself accordingly as you get

closer to retirement date and the fees

are extremely low so if your company

doesn't provide that specific one from

Vanguard which by the way I love

Vanguard I used it for my index fund

investing and I think they're amazing so

look for them but again if your company

doesn't have it with them just those are

some of the criteria to keep in mind

when selecting specifically what to

invest in so step number three emergency

funds now you don't seem to have any

debt and you have $500 in your savings

account which as my parents would say is

very good so now that hopefully you are

making more money you are saving more

money and you are investing more money

into the right places let's protect what

you have let's protect your nest egg

from the number one enemy of this entire

plan yourself believe it or not people

who don't have an emergency fund are

substantially more likely to take out

loan against their 401ks and I'm sure

you guys are aware right now there's a

lot of fear and panic about an oncoming

recession so what I don't want happening

to you is the thing that happened to a

lot of people during the last recession

back in o8 when the unemployment rates

spiked and as many as 46 percent of

people who lost their jobs took out and

liquidated their entire 401k savings to

pay for emergencies I don't want that

happening to you

so let's boost your emergency savings to

$1,000 this is your emergency fund only

and it needs to be at least $1,000 to

cover that temptation when inevitably

during the next 15 years something will

happen

so here's what I don't want you to do I

want you to not gamble with your money

trying to find the next hot investment

or the next hot growth stock and I

promise you're gonna hear a lot of this

from newsletters and emails and the

media screaming this is the next company

that's gonna take you to a retirement

sooner I promise none of them will no

one has any idea what they're talking

about don't take their advice don't even

take my advice just remember you don't

have time on your side to make up for

losses in an unpredictable market so

keep that in mind and regardless of what

the market does don't fear don't panic

just keep contributing to those

retirement programs that we just talked

about earlier and if you're thinking of

paying college for your kids then don't

do that just prioritize your finances

first and my parents didn't pay for my

college and I still love them it's not

like I resent them for anything I don't

hate them it's fine it's fine I'm fine

if anything it made me more into an

independent thinker and I understand

their situation they actually taught me

how to properly and where to invest my

time and my money and besides colleges

are gonna be around to take tens of

thousands of dollars from people for a

very long time they're not going

anywhere

and stop eating out just entirely and

the trick to tricking myself that I use

is I will have a pizza just chilling in

my fridge at all time I just tricked

myself I was dumb I don't know why I did

that but see you see I have a pizza in

my fridge waiting to go at all times

just in case I get that urge to go out

into a restaurant and eat some junk food

a pizza is my secret

and also just don't ever spend money on

eating out and just learn how to cook

and/or eat playing cards it works so

after you finished these first three

steps I want you to go ahead and create

a savings of three to six months of

essential expenses like your food and

your rent and that way in case you get

fired or something bad happens you could

just find another job and also consider

moving to a lower cost of living area

and still keep your same job maybe in

another state or maybe literally in

proximity to your job that way you can

get rid of your car and just bike to

work I know it sounds silly but trust me

it's possible my dad is 53 years old and

still does push-ups and handstands

anything is possible so thank you guys

so much for watching this video

smash that like button and subscribe

remember my life depends on it no big

deal okay guys love you all bye

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