6 GENIUS Places To Put Your Money After You Get Paid in 2024

In this video, I will explore Warren Buffett’s views on dividend investing to build wealth and earn passive income!

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Video Summary :

#1 . Necessities

The first place your money needs to go after you get paid is towards your basic living expenses. Basic living expenses would include things like rent, utility bills, internet and cellphone, and food.
But this list does not include anything you don’t absolutely need to maintain a decent quality of life. So if you’re ordering takeout every other night, and traveling internationally twice a year, these are considered luxuries, not necessities.

#2 Low cost index funds

I think index funds are the most underrated investment out there. I mean, what other passive stock market investment has returned an average of over 10% over the past 30 years?
And if that wasn’t enough, my favorite investor Warren Buffett absolutely loves index funds too. He once made a million dollar bet with all of Wall Street, he challenged them to generate a higher return than a simple low cost index fund over a 10 year time period. ’m sure you can guess who won that bet. After you’ve paid off your basic expenses, I think it’s a great idea to put a significant percentage of your savings into low cost index funds such as the Vanguard S&P 500. Your money will grow over time, and the sooner you get started, the more compounding effects you’ll see in your lifetime.

#3 Invest in hobbies and interests

As Warren Buffett said here, investing in yourself is one of the best places to put your money. And I don’t just mean investing in learning skills that can make you more money, because everyone only talks about learning to earn.
Spending money on things we enjoy benefits us in 2 distinct ways. First, it  rewards us in the moment through the instant gratification and joy we experience, and second, it continues to pay dividends in the form of good memories that we have with us for the rest of our lives.

#4 Real estate 

Real estate investing has been around for a long time. Like for literally thousands of years, the richest people in the world were essentially landlords who owned an entire country’s worth of land.
You could even call real estate the OG source of passive income, before the term “passive income” even existed. One thing that you might be able to do is called house hacking, this is when you buy a house with multiple rooms or units that you can then rent out to other people to cover your mortgage payments. So effectively, you’d be living for free and your housemates would be paying off your mortgage for you, while you get to enjoy the equity and appreciation that the house will see over time.  But if you still can’t afford to get a mortgage, don’t worry, there are other ways for you to jump into the real estate game for a lot less money such as through REITs.

#5. Checking account

I know money in a checking account loses value to inflation. However, the main advantage of keeping a relatively small amount of money in a checking account is accessibility. The trick is to use the checking account to pay off your credit card and other monthly bills, and still have an extra couple thousand dollars sitting there in case you ever need it really quickly for an emergency. 

I don’t recommend keeping all of your emergency funds in a traditional savings account because you typically can’t spend money from a savings account directly, and transferring between accounts can take time.

#6. Discretionary spending

I feel like most personal finance gurus never talk about the value of discretionary spending, but I think it’s worth discussing. After all, a life without any discretionary spending would really suck.
If you were fed and had shelter everyday, but you never got to eat tasty food, travel, go to the movies or do anything else that you enjoy … What's even the point of working so hard in your career?

We all deserve to let loose a little bit and actually enjoy the money we earn, and spending money on things and experiences that we want is super important.

Life is short, and you can’t take your money with you when it’s over, so might as well spend some of it on things you don’t need, but still want because you enjoy them.

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