What Can Jay Leno Teach Us About Money?

What Can Jay Leno Teach Us About Money?


How has Jay Leno managed to become a multi-millionaire
and what can we learn about money from him? Well, that’s obvious, you might say to yourself
it’s because he’s made millions and millions of dollars from being on TV. Well, yes, that certainly does help but as
we’ve seen from many celebrities and professional athletes alike, making a lot of money does
not necessarily mean that you keep a lot of money. And the fundamental principles that Jay Leno
used in order to become so financially successful are things that we can apply in our own lives. And that’s what we’re going to be talking
about today. Today we’re going to be covering what Jay
Leno can teach us about money. Hey everyone Daniel here and welcome to Next
Level Life a channel where you can learn about Investing, debt, retirement, and many other
general financial education videos because the school’s aren’t going to do it for us. So if any of those topics sound interesting
to you or if you want to learn how to better handle your money and have more financial
freedom be sure to hit that subscribe button and the bell next to my name to be notified
every time I upload a video. And if you want to further support the growth
of this channel you can check out some of the links I’ve left down in the description
below which includes a 30-day free trial of Audible and 2 free audiobooks of your choice
as well as a list of some books on money I’d recommend checking out, or you can share this
video with a friend, and leave a comment below letting me know what topics you’d like me
to cover in future videos. So how does Jay Leno save his money? According to a CNBC article from 2016, Leno
has always had at least two sources of income since his working life began and his whole
strategy was to live off of just one of those two incomes and he always chose to live off
the smaller of the two if at all possible. This is of course why the story was considered
newsworthy at all because, if true, it means he has not spent any of his tonight show income,
which at its peak was reportedly around $30 million a year. According to Leno, he managed this by doing
at least 150 comedy acts per year while hosting the tonight show so that he could still have
that secondary income to live on. When asked why he was so conservative in this
regard, Leno responded, “So many people get to be the age I’m at now and they’ve got nothing
because they just blew it all. I put my money in a hammock and say, ‘You
relax. I’m going to go work.’ And when I come back, I put some more money
in the pile. “It sounds ridiculous, but if everything ends
tomorrow, I know I’ll be fine.” In short, this savings strategy gave him financial
peace of mind, which is an awesome thing to have. Now most of us have not been the host of a
popular television show like the tonight show and most of us are not making upwards of $30
million a year, but we can all in our own way implement Leno’s savings plan. Maybe it’s a married couple that are living
off of one of their incomes and saving the other. Maybe it’s a single person who has a side
hustle that they live off of while they save their salary from their day job. Perhaps it’s an entrepreneur who lives off
of one of their revenue streams and saves the rest. Whatever the case may be the effects can be
enormous. Take John and Jane who are a married couple
making $24,000 and $30,000 a year respectively. So neither of them are pulling in the big
box but with some creative budgeting, they would be able to live off of one of the incomes
and save the other. Ideally, they would manage to live off the
$24,000 income since it’s the smaller one but even if that wasn’t the case the results
could still be incredible. Say for whatever reason they weren’t able
to make it on $24,000 a year so they lived off the $30,000 a year income and saved the
$24,000 income. $24,000 a year is $2,000 a month which if
invested in the market, generating an average 8% annual rate of return is $112,000 in 4
years, $362,000 in 10 years, $1 million in 19 years and almost $6.5 million in 40 years. Which according to the 4% rule is over three
times more than they would need adjusting for a 3% rate of inflation over those 40 years
in retirement. And it even easily covers them if they use
the more conservative 3% safe withdrawal rate. Even if we were to change the assumptions
and say that they only managed to make a 6% average annualized rate of return over those
40 years, the results would not materially change. Sure the ending net worth after 40 years would
be a little over $3.8 million instead of nearly $6.5 million but they’re still easily covered
under both the 3% and 4% rules. For the record, according to the 4% rule,
they would need a little over $2.4 million in retirement savings when they finally decide
to hang their boots and a little over $3.2 million using the 3% rule. As for the single person or entrepreneur who
maybe doesn’t have a secondary salary income coming in, could still like I said use some
sort of a side hustle to generate that secondary income. This is exactly what Leno did himself. In the CNBC article, which I’ve linked in
the description below this video if you want to check out the full thing for yourself,
he’s quoted as saying, “When I was younger, I would always save the money I made working
at the car dealership and I would spend the money I made as a comedian. When I started to get a bit famous, the money
I was making as a comedian was way more than the money I was making at the car dealership,
so I would bank that and spend the car dealership money.” The car dealership was Leno’s day job and
the comedy gigs were his side hustle. Now as he said his side hustle eventually
outstripped his earning potential as an employee which isn’t altogether uncommon but even if
that doesn’t happen the results can still be incredible. Take Chad who’s single working a day job paying
him $24,000 a year but he also has a side hustle generating $1,500 a month. Again ideally he would be able to live off
the smaller of the two incomes but even if he doesn’t and instead lives on the $24,000
a year income and banks the side hustle income he still becomes a multi-millionaire. He has net worth of over $100,000 in 5 years,
nearly a quarter of a million dollars in 10 years, over $1 million by the end of the 25th
year, and just shy of $2.9 million by the time he retires in the 40th year and that’s
assuming a 6% average rate of return. If we assume an 8% average rate of return
over those 40 years he ends up with nearly $4.9 million. He’s able to retire comfortably under both
the 4% and 3% safe withdrawal rates and it’s all because he made sure he diversified his
revenue streams, lived on one, and save the other. And the entrepreneur scenario would obviously
work pretty much the same way except we would replace that day job income with some other
side hustle income. And on a personal note, I really love this
system. It may not be the end-all-be-all but it’s
very simple to implement and over time it can really work wonders whether you’re married,
single, working for yourself or for others. And that’s what Jay Leno can teach us about
money. So what did you guys think of this strategy? Did you already know about it and are any
of you using it or something similar to it? Also, would any of you be interested in hearing
more about what various celebrities, investors and business icons can teach us about money? I’m thinking of making this into a bit of
a series because there’s a lot of interesting stories and lessons out there that don’t always
get a ton of coverage, but are very fun and informative or at least I think so. Let me know in the comments section below. But that’ll do it for me today once again
if you enjoyed this video be sure to subscribe and hit that Bell next to my name so that
you’ll be notified of all my future uploads. I generally upload every single Monday, and
if you have a friend that would be interested in this kind of content be sure to share it
with them and let’s really get this information out there and start our own Financial revolution.

47 comments

  1. I like the videos you create. If ur doing videos about rich people, can you make one about dan lok. Can dan lok's method work…
    Love your videos

  2. I'm interested in hearing more about what various celebrities, investors, and business icons can teach us about money. 🙂

  3. I love this video because it aligns with what I talk about on my channel. Save and Save some more. You will be shocked at how much more money you will get to keep from saving that $10 here and $45 there. We really live off of the lie and default mode of spending everything we earn because 'you have to pay yourself first and enjoy now', whereas 'paying yourself first, means that you are 'saving for the future self'. It's really not rocket science guys, get a piggy bank and start from there. Cultivate the habits first on the little that you have and when you eventually start making more, it becomes a lot easier to still spend considerably less than the average Joe 🙂

  4. Having two incomes is brilliant! Trying to live off the lower income while saving and investing in the higher income is even more brilliant. That's my goal in the future!

  5. Highschool student making money while trying to save. While still having bills to pay insurance, phone bill, and gas. How can I save money when I don't make enough or barely alot?

  6. Love the idea. Looking to start up two side hustles this year. One being house hacking and tho other I still need to find. Any side hustle ideas, that are scalable, for a programmer?

  7. 8% ? 6% ? what? there is no such thing today. your math does not work without compound interest. todays reality is like 0.5%. do the numbers with the correct rate.

  8. I've been learning a lot about retirement and money the last couple years. I recent read a book that shined some light on this topic (I forget the book name. I'm not at home).

    Long story short, sticking money in the stock market for decades is a waste of money. That is millions you can't do anything with. You can't retire until you're already really old. Best to focus on cash flow. I wouldn't want to be poor until I'm an old prick, then suddenly become an old rich asshole.

    Hell, my mountain bike costed more than that $1500 that dude is left to live on each month. Talk about a shitty life.

  9. this is all great if you have a decent job,nothing happens to you,you decide to not have kids and you dont have a "life" for you "life".dont get me wrong,we all can be better at saving but doesnt always work out that way.i also want to "live" my life while im here.not sit in a run down house or apartment with my wife and 2 kids and have to stay home every weekend.no thanks

  10. It looks like you overestimated how much a person needs in retirement under the 4% rule. For someone living off of $24,000 a year, they would only need $600,000 in retirement. Your point still stands though that steady investing over the long term even with more conservative market returns leads to a secure retirement. Great video.

  11. I've been doing this for decades now and at 58 I'm starting to get tired. I feel like I have worked most of my life away. I don't take vacations or going anywhere. My relationships that have ended fortunately didn't cost me as much money as they could have. The best thing about my life is that I am still very close to my brothers and sisters. I may be a millionaire, but you wouldn't know it. A million dollars sounds like a lot, but when you take into account what you actually need on a monthly basis just to live, that million dollars better be invested in some income producing assets because it gets eaten up very quickly with simple monthly expenses. If I did decide to quit working I would probably be more of a hermit than I already am. I only leave the house to go to work or to go to family functions. I made choices to not outlive my money. Looking back I don't know that I would do anything any different, except not get married at all. It isn't worth it for men in my opinion.
    (See rooster's comment reprinted below.)
    ————————————————————-

    "this is all great if you have a decent job,nothing happens to you,you decide to not have kids and you dont have a "life" for you "life".dont get me wrong,we all can be better at saving but doesnt always work out that way.i also want to "live" my life while im here.not sit in a run down house or apartment with my wife and 2 kids and have to stay home every weekend.no thanks" (See rooster's comment reprinted below.)

  12. Hello great vid! Thanks. You are talking about x% ROI regarding to living in that 4/3 Rule, Do you have a video tackling where to put the money in order to achieve this mentioned ROI?

  13. I think I need to binge watch your videos from the beginning since I missed a lot before I subscribed. I love the content and find it very entertaining. I think I'm in a pretty good place when it comes to finances and although I don't make a lot of money, I'm in this boat. My wife makes more than I do, but we live off of my income and invest hers. We're also in the process of developing other income streams to add to our investments. A lot of the side income takes a good deal of creative thinking and I struggle with that. Darn it, I should have filmed segments or blogged while my wife and I were building our house. Kicking myself in the butt now.

  14. You also have to realize that this guy owns hundreds of classic cars, and he did it from his side gigs!?

  15. Even if you don’t have two streams of income you can go with overtime all going towards additional savings and investing.

  16. I love your videos, but all this video says is save half your income and you’ll have plenty of money for retirement which seems kind of obvious. I doubt many households with 54,000 dollars a year can save 24,000 dollars without serious spending restraint. Work to live, not live to work.

Leave a Reply

Your email address will not be published. Required fields are marked *