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Aaron Casey

HowMoneyWorks Educator

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May 18, 2023

The Knowledge Gap

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The Knowledge Gap

May 18, 2023

The Knowledge Gap

Knowledge separates those who take advantage from those who are taken advantage of.

Why? Because knowledge translates to action.

This is especially true when it comes to money.

Think about it. The Sucker “knows” just a few things about money…

“I need money to buy things.”

“I work to earn money.”

“I will never earn much money.”

Now, consider what the Wealthy know about money…

“I can use money to start a business.”

“I can use money to earn compound interest.”

“I can use money to make my family’s life easier.”

“I can use money to leave my loved ones a legacy.”

The difference is simple.

Because the Sucker knows little about money, they see it only as a necessary evil.

But the Wealthy know money creates opportunity.

It all starts with knowledge. If the Sucker knew how money actually works, they would see it—and manage it—differently.

What do you think you know about money? If you’re not sure, scroll up to the top of my site and head over to the Learn section. There, you’ll find the HowMoneyWorks Challenge, a quick quiz that will reveal how much you actually know about money.

When you’ve completed the quiz, let me know how you did. Better yet, what answers surprised you? It may be that you’ve never been taught things like the Power of Compound Interest or Risk Diversification. And that can warp your ability to see money as an opportunity instead of a limitation.

It all starts with your thinking. It all starts with learning how money works.

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Protecting Your Emergency Fund From Inflation

Protecting Your Emergency Fund From Inflation

Your emergency fund may be rapidly losing value.

Despite your best efforts and planning, you and your family’s first line of financial defense might be eroding day by day. And it’s all because of inflation.

Here’s what’s happening…

Inflation is the steady increase of prices over time. A jug of milk that costs $2.85 one year could cost $3.00 the next. On average, prices have inflated at 3.25% annually since 1914.¹

But in 2021, inflation exploded. The market faced a perfect storm of low interest, pandemic-fueled supply chain problems, and consumers returning to stores. Demand soared while supply shrank.

The result? Consumer prices increased 7% in 2021, the highest rate since 1982.²

That means everything is increasing in price… including the services you need in emergencies.

But here’s the problem—it’s a challenge for your emergency fund to outgrow inflation.

Why? Because above all else, your emergency fund must be both accessible and stable. What good is an emergency fund if you can’t use it in a pinch or if it gets leveled by market fluctuations?

And good luck finding an account that’s accessible, stable, AND pays interest that’s greater than inflation. In today’s climate, it can be difficult to find a “high interest” savings account that pays more than .5%. Read that again. Not 5%. Point 5 percent.

The question then, isn’t if your emergency fund can outgrow inflation. It’s about minimizing the damage.

Here are two ideas that may make the difference between financial success and disaster in the face of emergencies…

Increase your income. It’s simple—the more you earn, the better positioned you are to navigate emergencies. Look for ways to increase your income through side hustles, a new opportunity, or even negotiating higher wages with your current employer.

Just remember—not all sources of income are created equal. The income from your job, for instance, has two critical weaknesses…

  1. It may dry up if an emergency stops you from working
  2. Wages haven’t kept pace with inflation for decades

In short, the best sources of income for emergencies work even when you can’t, and empower you to control your own wage.

Some options are…

Turning a hobby or passion into a side-hustle Starting a business that eventually becomes self-sustaining Creating and selling duplicatable items like books, courses, music, etc.

Split your emergency fund. If you have a substantial emergency fund you could split it between two accounts. One half would grow slowly but remain easily accessible and stable. The other half would grow faster but be less accessible and more volatile.

Be warned—this strategy will only work if you have substantial emergency savings. Before you opt for this approach, consult with your financial professional.

Shielding your emergency fund from inflation is possible, but it takes the right strategy. It’s always wise to consult with a licensed and qualified financial professional before committing to a strategy.

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¹ “United States Inflation Rate: Stats,” Trading Economics, https://tradingeconomics.com/united-states/inflation-cpi#:~:text=Inflation%20Rate%20in%20the%20United,percent%20in%20June%20of%201921.

² “Inflation reaches highest level since 1982 as consumer prices jump 7% in 2021,” Paul Davidson, USA Today, Jan 12, 2022, https://www.usatoday.com/story/money/2022/01/12/cpi-2021-consumer-prices-climbed-7-2021-fastest-pace-since-1982/9178235002/

³ “For most U.S. workers, real wages have barely budged in decades,” Drew Desilver, Pew Research, August 7, 2018, https://www.pewresearch.org/fact-tank/2018/08/07/for-most-us-workers-real-wages-have-barely-budged-for-decades/

Will Your Savings Become Wealth?

Will Your Savings Become Wealth?

Not sure if you’re on track to become wealthy? The Rule of 72 can help!

The Rule of 72 is a simple mental math shortcut that estimates how long it could take your money to double. This is what it looks like…

72 ÷ interest rate = years to double

It’s simple, it’s easy, and it might change your life.

Here’s how…

Let’s say you’re done living paycheck-to-paycheck and you’re ready to build wealth. You’ve downloaded a budgeting app, and you’ve set aside $150 each month to save. Look at you! That’s a massive step towards building wealth.

But now you face a dilemma—where should you stash that money each month?

Your checking account? A savings account? Retirement accounts? NFTs? Each person you ask has a different opinion, fully backed with anecdotal evidence.

But have no fear! Enter the Rule of 72. It’s your gleaming sword that can slash through false perceptions and help you conquer your savings goals.

Let’s say for the time being, you’ve kept some money in a “high-interest” savings account earning .5%. How quickly will that account double your money?

Simple—plug that interest rate into the Rule of 72, and you get…

72 ÷ .5 = 144 years to double…

That’s right—your money will take 144 years to double with your current savings strategy. Yikes! That’s enough time to move from steam power to SpaceX.

But that’s not all—that interest rate leaves you helpless to inflation, which as of the writing of this article is about 3.25%.1 Luckily, you can use the Rule of 72 to discover when inflation will double the cost of living. Just replace the interest rate with the rate of inflation, and you get…

72 ÷ 3.25 = 22 years

Think of it like this—in 144 years, your money would double once. But the cost of living would double 6 times. Without the Rule of 72 to reveal this truth, your savings strategy might erode your wealth instead of increasing it!

But suppose you found an account with a 6% interest rate. Plug that into the Rule of 72, and you get a very different result…

72 ÷ 6 = 12 years

Over a 45 year career, your money would double roughly 3 times. The cost of living would only double twice. So your wealth would be above the rising tide of inflation.

The Rule of 72 isn’t a guarantee of success. After all, past performance can never guarantee future results. But the Rule of 72 can estimate if your savings are on track to become wealth, or if you’re heading towards financial disaster. Use it often, and discuss your findings with a financial professional.

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¹ “United States Inflation Rate: Stats,” Trading Economics, https://tradingeconomics.com/united-states/inflation-cpi#:~:text=Inflation%20Rate%20in%20the%20United,percent%20in%20June%20of%201921.


Divide 72 by an annual rate of return to calculate approximately how many years it takes for money to double. Understand that most investments generate fluctuating returns, so the period in which an investment can double cannot be determined with certainty. Keep in mind that this is just a mathematical concept. The hypothetical examples do not reflect any taxes, expenses, or fees associated with any specific investment. If these costs were reflected the amounts shown would be lower and thetime to double would be longer. Investing involves risk including the potential loss of principal.

Be Like Buffett

Be Like Buffett

Warren Buffett didn’t become a billionaire overnight. Instead, he leveraged simple concepts over decades to build a vast fortune.

These are the same concepts you can use too.

To demonstrate this, let’s review the history of Buffett’s wealth…

Buffett started growing his money at age 11. He bought three stocks at about $38 a piece.¹

By the age of 30 he had become a millionaire.²

He didn’t become a billionaire until age 56.³

But the vast majority of his wealth wasn’t created until he was past the normal retirement age.

Over the next 36 years, his wealth surged to over $100 billion.⁴ If you include the $37 billion he’s donated,⁵ his net worth increased over 10,000%.

That’s a staggering figure.

And it’s all because he leveraged two simple concepts—the Power of Compound Interest and the Time Value of Money.

The Power of Compound Interest explains the exponential growth of Buffett’s net worth. Buffett used money to earn money. The more money he made, the more he could also earn.

By the time he was 57, he had $1 billion at his disposal to build further wealth. In short, he unlocked a virtuous cycle of growth leading to greater growth.

But it’s the Time Value of Money that explains Buffett’s massive success.

Compounding requires time to get the maximum benefits. The longer money compounds, the greater its ability to build wealth.

And Buffett started compounding early. Very early. Age 10, to be precise.

What if he had started later? Let’s suppose he started at age 30 with $25,000, earned 22% annually (Buffett’s career average), and retired at age 60 to play golf.

His net worth in this scenario? $11.9 million. 99.9% less than his current value.⁶

The takeaway? Be like Buffett.

That doesn’t mean going down the finance nerd rabbit hole. It definitely doesn’t mean adopting the Oracle of Omaha’s diet of fast food and soda!

Instead, leverage the Power of Compound Interest ASAP. Then, be patient and let the Time Value of Money work its magic over years and decades. And rest easy—you’re following in the footsteps of the greats.

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¹ “How Warren Buffett made his billions and became the ‘Oracle of Omaha’” Tom Huddleston Jr., CNBC Make It, Aug 30 2020, https://www.cnbc.com/2020/08/30/how-warren-buffett-made-billions-became-oracle-of-omaha.html

² “Here’s the most overlooked fact about how Warren Buffett amassed his fortune, says money expert,” Morgan Housel, CNBC Make It, Sep 8 2020, https://www.cnbc.com/2020/09/08/billionaire-warren-buffett-most-overlooked-fact-about-how-he-got-so-rich.html

³ “How old 14 of the world’s richest people were when they first became billionaires,” Kathleen Elkins and Taylor Nicole Rogers, Business Insider, Aug 10, 2020 https://www.businessinsider.com/how-old-billionaires-were-when-they-earned-their-first-billion-2016-2#carlos-slim-51-3

Forbes, https://www.forbes.com/profile/warren-buffett/?sh=74048d724639

⁵ “Warren Buffett is ‘halfway’ through giving away his massive fortune. Here’s why his kids will get almost none of his $100 billion,” Nicolas Vega, CNBC Make It, Jun 23 2021 https://www.cnbc.com/2021/06/23/why-warren-buffett-isnt-leaving-his-100-billion-dollar-fortune-to-his-kids.html#:~:text=Buffett’s%20note%20announced%20that%20he,donation%20tally%20to%20%2441%20billion.

⁶ “Here’s the most overlooked fact about how Warren Buffett amassed his fortune, says money expert,” Morgan Housel, CNBC Make It, Sep 8 2020, https://www.cnbc.com/2020/09/08/billionaire-warren-buffett-most-overlooked-fact-about-how-he-got-so-rich.html

Is Financial Illiteracy the Secret Cause of Your Relationship Problems?

Is Financial Illiteracy the Secret Cause of Your Relationship Problems?

Your knowledge of how money works can make or break your relationship.

Not only can financial illiteracy cause soulmates to fight about money, but it can negatively impact your relationship in other ways.

Are any of the following consequences of financial illiteracy occurring with you or your significant other? Read on for some ways to avoid them.

You’re always on edge about money… and it shows. It’s no secret that money problems cause stress. And prolonged stress, no matter your mental strength, will eventually impact your mental health.

The financially illiterate are often destined for a life of struggle.

How could they not be? They haven’t been taught how money works, yet they desperately need this knowledge to succeed. The results are predictable—foolish financial decisions that, over time, can generate significant money problems and subsequent stress.

Eventually, prolonged financial stress will shape your actions. That could take the form of chronic anxiety, a quick temper, or even indulging in unhealthy coping mechanisms. And those, given time and lack of attention, will erode your relationship.

Conversations about money will be tense because you don’t have a solid basis of knowledge about your finances. Too many feelings of uncertainty and worry can cause words to be exchanged with fear, anger, or blame. They are bound to hurt. And like that, financial illiteracy has caused a rift in your relationship.

You avoid talking about money with your significant other. If you have enough arguments about money, you may decide it’s no longer worth it to “go there”. And it makes sense—financial illiteracy induced stress can make money conversations tense and unproductive, to say the least.

Financial illiteracy can directly disrupt your ability to communicate. The same underlying factor is at play—you don’t have the proper skills to talk about money in a healthy manner.

Soon, every discussion about the family budget degenerates into an argument. The topic of money becomes a lightning rod for blame and accusation. It’s easy to fall into this pattern. But it does nothing but hurt your relationship, because you’re both losing.

The result? You talk about your finances rarely, if at all.

You’re making financial decisions without your partner. All those failed conversations about money can leave you and your partner feeling isolated. Eventually, you may find yourself making critical financial decisions without consulting each other because it’s just too difficult when you try.

This is called financial infidelity. It represents a deep breach of trust. And it can have devastating consequences for couples.

Why? Because it seems selfish and sneaky. It raises questions like, What could your partner be hiding? Why do they need a separate bank account all of a sudden? Where did half of our savings go? Secrecy could be concealing a secret life of spending that will eventually undermine your family finances.

Trust is easy to lose, but difficult to regain. It could be a long time before you trust each other with money again.

These are just some of the insidious ways that financial illiteracy can harm your relationship. In order to have a healthy partnership, both parties need to know how money works. That way, you’re more likely to fight about putting pineapple on your pizza than how you’ll afford retirement.

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The Scandal of the American Financial Education System

April 13, 2023

The Scandal of the American Financial Education System

The scandal of the American financial education system is that there is no American financial education system.

It doesn’t exist. And millions are suffering for it.

As it stands, only 21 states require financial education courses to graduate high school.¹ But that number is a mirage—60% of students in those states haven’t actually taken the classes!²

Simply put, almost no one in America is learning how money works. And it’s wreaking havoc on the lives of millions.

Would these statistics even exist if schools empowered students with financial literacy? You be the judge…

$167 billion wiped out by foolish investments in meme stocks in early 2021³

Over $1 trillion lost to volatile cryptocurrencies in a single week⁴

Over $1 trillion in student loan debt shackling Americans⁵

1/3 of millennials believe they’ll never have enough saved to retire⁶

These numbers tell a story.

Students go through high school without hearing a peep about how to manage money or build wealth. 

They sign off on student loans without being taught how debt can devastate their future.

Graduation comes around, and they start living paycheck to paycheck. How could they not? It’s all they know.

And then, no surprise, they’re suckered into get-rich quick scams that promise wealth but only deliver crushing losses.

Do these scenarios hit a bit too close to home? If they do, then know this—you cannot rely on the powers that be to show you how to change your story.

If you were let down by your school system—and even if you weren’t—ask me for a copy of How Money Works: Stop Being a Sucker. It may be the knowledge you need to turn your financial situation around and change your future.

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¹ “Should All Schools Teach Financial Literacy,” Shannon Doyne, The New York Times, Apr 20, 2021, https://www.nytimes.com/2021/04/20/learning/should-all-schools-teach-financial-literacy.html

² “2019 Money Matters On Campus Report,” EVERFI/AIG Retirement Services, https://2gag5314usvg3k1yhz13gzy4-wpengine.netdna-ssl.com/wp-content/uploads/2019/05/MoneyMatters-2019.pdf

³ “Meme Stocks Lose $167 Billion as Reddit Crowd Preaches Defiance,” Sarah Ponczek, Katharine Gemmell, and Charlie Wells, Bloomberg Wealth, Feb 2, 2021m https://www.bloomberg.com/news/articles/2021-02-02/moonshot-stocks-lose-167-billion-as-crowd-preaches-defiance

⁴ “The crypto market has lost 47% of its value in just 7 days,” Isabelle Lee, Business Insider, May 19, 2021, https://markets.businessinsider.com/news/currencies/crypto-market-value-47-percent-lost-7-days-2021-5

⁵ “Student Loan Debt Statistics: 2021,” Anna Helhoski, Ryan Lane, Nerdwallet, Aug 19, 2021, https://www.nerdwallet.com/article/loans/student-loans/student-loan-debt#:

⁶ “61% of older millennials believe they’ll be working at least part-time during retirement,” Megan Leonhardt, CNBC Make It, Jul 22, 2021, https://www.cnbc.com/2021/07/22/majority-of-older-millennials-believe-they-will-work-during-retirement.html

4 Simple Steps to Streamline Your Housing Budget

April 6, 2023

4 Simple Steps to Streamline Your Housing Budget

Decreasing your housing budget may mean more money in your pocket.

That’s because housing is the single largest expense for most Americans.¹ Reducing mortgage payments or rent by even a fraction can free up substantial cash flow.

The best part? You don’t have to move into a shack to make it happen. Here are a few strategies to increase cash flow by decreasing your housing costs.

Choose the suburbs over the city. On average, suburbanites save $9,000 per year on housing and child care when compared to city-dwellers.² By and large, the money you may save on the cost of living in the suburbs can outweigh the added transportation expenses. It’s not a shift for everyone, but relocating further from the city might make sense financially, at least for the short-term.

Rent until you’re ready. It’s worth considering leasing a house or apartment until you’re financially positioned to buy a house. Even if a mortgage payment seems cheaper on paper than renting, ownership can come loaded with unforeseen expenses. Flooded basement? That’s on you. Broken furnace? Also on you. Renting isn’t necessarily a permanent long-term strategy, but it beats potentially going into debt covering surprise repairs that are beyond your budget.

Find a reliable roommate. Sharing the cost of housing can free up a significant portion of your cash flow, especially in expensive cities. In New York City, for instance, having a roommate can save you up to $15,500 every year.³ Just be sure you take on a roommate that doesn’t flake out when rent is due.

Rent out a room. If you’re a homeowner with room to spare, consider leasing space to a trusted friend. The extra income can offset the cost of mortgage payments and result in more cash flow going toward saving, investing, or even paying off the house faster.

Contact me if you’re interested in learning more about how budgeting fits into an overarching financial strategy. We can review your income and expenses and make a game plan for how you can stop spending like a sucker and start saving like the wealthy.

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¹ “American Spending Habits in 2020,” Lexington Law, Jan 6, 2020, https://www.lexingtonlaw.com/blog/credit-cards/american-spending-habits.html

² “City vs. Suburbs: Where is Better to Live?,” The Perspective, 2020, https://www.theperspective.com/debates/city-vs-suburbs/

³ “What a Roommate Saves You in 50 U.S. Cities – 2020 Edition,” Nadia Ahmad, SmartAsset, May 11, 2020, https://smartasset.com/checking-account/what-a-roommate-saves-you-in-50-us-cities-2020

Closing The Gap

Closing The Gap

Women earn 83¢ for every $1 earned by men.¹

The median annual salary for men is around $61,100. At 83¢ for every $1 earned by a man, the median annual salary for women is around $50,700.² For someone taking care of a family, how significant do you think that extra $10,000 would be?

By the time a woman reaches age 65, she will have earned $900,000 less than a man who stayed continuously in the work force.³ Consequently, retired women receive only 80% of what retired men receive in Social Security benefits.⁴

Women tend to be the primary caregivers for their children, parents and partners.¹ So women end up taking time away from their careers to care for loved ones. These career interruptions can significantly impact women’s chances to climb the corporate ladder – promotions, raises, bonuses and full retirement benefits.³

Since women earn less, we have less money to set aside for our financial goals. Of the Americans who live paycheck to paycheck, is it a surprise that 85% are women?⁵ As a result, women own just 55¢ for every $1 owned by men. We accumulate only half of the wealth accumulated by men.⁶

We may not see the gender pay gap or the gender wealth gap close in our generation. But women can change the financial trajectory of their lives by learning how money works and applying the 7 Money Milestones. By understanding and paying attention to all of the things that make up our financial picture – Financial Education, Proper Protection, Emergency Fund, Debt Management, Cash Flow, Build Wealth, and Protect Wealth, we have the power to take control over our financial future and create equal wealth for ourselves.

And, women need to think about their career decisions. We should consider choosing a career that pays more to women and men equally. With a company that doesn’t penalize women for time spent taking care of loved ones. A place where women can create equal pay for ourselves.

Women have made a lot of progress in pursuing higher education and professional careers, but we’ve only made incremental progress in our finances. If we want to bring about profound change, we have to make it happen for ourselves. We have the power to close the gap in our lives for ourselves and our families.

— Kim Scouller

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Sources:

  1. “It’s Equal Pay Day. The gender pay gap has hardly budged in 20 years. What gives?,” Stacey Vanek Smith, NPR, Mar 14, 2023

  2. “Usual Weekly Earnings Of Wage And Salary Workers, Fourth Quarter 2022,” Bureau of Labor Statistics, Jan 19, 2023

  3. “Women lose out on $900,000 in earnings in their lifetime due to pay gap,” Aimee Picchi, CBS News, Mar 14, 2023

  4. “How does gender equality affect women in retirement?” Grace Enda and William G. Gale, Brookings Institute, Jul 2020

  5. “Women Live Paycheck to Paycheck Roughly 5 Times as Often as Men – Here’s Why,” CNBC Make It, Oct 2019.

  6. “Gender Wealth Gaps in the U.S. and Benefits of Closing Them,” Ana Hernández Kent, Federal Reserve Bank of St. Louis, Sep 29, 2021

A Bold Strategy to Free Up Cash Flow

March 23, 2023

A Bold Strategy to Free Up Cash Flow

Need cash flow? Consider reducing your largest expenses.

Housing, transportation, and food consume more than 60% of the average American’s income.¹ If you’re willing to cut costs in those categories by just a fraction, you could save far more than eliminating smaller budget items. Think of it like this—cancelling a few unused online subscriptions is a good start, but it might not save you nearly as much as downsizing your apartment!

Here’s how it works…

You’re ready to get your financial house in order, attack your debt, and start building wealth. Let’s say you earn about $70,000 per year. $40,000 goes towards housing, transportation, and food, you spend $5,000 on non-necessities, and the rest goes towards insurance, healthcare, and education.

Looks good, right? But when you crunch the numbers, you realize you can’t put away enough each month to reach your savings goals. What a momentum-killer! How are you going to free up cash flow?

By totally eliminating non-necessities like coffee from the shop and streaming services, you could get back $5,000 dollars a year.² Not bad, but not great either.

Or—to save twice as much—you could scale back your housing, transportation, and food expenses by 25%. It might seem radical, but it’s worth considering if it can help get you to your goals.

The takeaway? Before you hack away at your lifestyle, consider your non-discretionary spending. It’s an aggressive strategy, but ask yourself if there are ways you could slash your rent, mortgage payments, car payments, and grocery bill. If so, take advantage of them—they could free up far more cash flow than by just cutting non-necessities.

Not sure how to cut back on your top expenses? Stay tuned for creative strategies for reducing your spending on housing, transportation, and food. Articles that outline how you can save money on the largest items in your budget are on the way!

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Gen Z Is Being Lied to About Money

Gen Z Is Being Lied to About Money

Gen Z, you’ve been lied to about money.

Social media is swarming with financial predators feeding you falsehoods about how to build wealth.

That tech-bro influencer hyping the “next big crypto” that made him “wealthy”? He’s running a pump and dump scam. You buy in, the value surges. He cashes out, the value plummets. You lose everything you invested.

The 18 year old with the Ferrari earning $10,000 per month using business secrets he’ll show you FOR FREE? He’s actually selling “courses” that give you nothing, but line his pockets.

The “investing wizard” who turned $100 into $1,000,000 using specialized secret algorithms that he’s willing to share—again, FOR FREE—at his upcoming seminar? He gambled on risky startups and got lucky. Now he needs your money to feed his addiction.

Each of these bottom-feeders scratch an itch that Gen Z deeply feels. Who doesn’t want to build wealth quickly? Who doesn’t want a better life for themselves and their family?

And if you’ve never been taught how money works, you might just believe their promises. They sure sound better than the bleak realities of stagnant wages and debt that Gen Z has watched Millennials suffer through.

It’s why 41% of Gen Z investors turn to TikTok for financial advice.¹ Traditional schools and institutions have failed them, and they’re desperate to learn how money works, regardless of the source.

But until they’re financially literate, they’re susceptible to schemers, frauds, and charlatans. That means more wealth lost to false online gurus, cryptocurrency roller coasters, student loans, and more.

You need to learn how money works today. Not tomorrow. Not next week. Today.

It’s the only way you’ll develop the savvy needed to see through scams and recognize real wealth building opportunities.

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¹ “Meme mania pushed Gen Z into the stock market - and now they’re learning investing fundamentals from TikTok and Instagram,” Natasha Dailey, Market Insider, Jun 15, 2021, https://markets.businessinsider.com/news/stocks/meme-mania-gen-z-pours-into-stocks-tiktok-instagram-advice-2021-6-1030524123

Why You Should Study the Wealthy

March 9, 2023

Why You Should Study the Wealthy

Want to be financially independent? Study the wealthy.

Why? Because observing the wealthy is one of the most effective guides for creating— you guessed it—wealth. By using the wealthy as your guide, you can reduce debt, increase cash flow, and protect what you earn.

To study the wealthy, pattern their behavior.

Start by observing your social circles. Ask yourself who in your contact list is building real wealth…maybe a friend, family member, or mentor. Got someone in mind? Talk to that person. Spend time with them, hang out with them, and ask them questions. You’ll begin to absorb their insights, habits, strategies, and ways of thinking just by being around them!

If no one in your circles fits that description, it’s not hard to study the wealthy from a distance. Read the biography of a successful businessperson, watch a CEO’s TED Talk, or follow respected financial experts on social media. Be consistent. It takes time to unlearn unhealthy habits and replace them with new, beneficial behaviors.

Also, consider reading the HowMoneyWorks: Stop Being a Sucker book. It’s the quickest path on the market today to learning how wealth is built. You’ll come away with a fresh understanding of what’s possible with your paycheck and the milestones you need to hit.

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3 Painful Consequences of Minimum Payments

3 Painful Consequences of Minimum Payments

Do you send in more than the minimum payments on your credit cards each month? (The correct answer is ‘yes.’)

If you are making more than the minimum payments now—you’re thinking like the wealthy!

A minimum payment is the lowest amount you can pay on your credit card bill without suffering a late payment penalty. We all know making minimum payments may be necessary for a short period if you’re freeing up cash flow to pay down a bigger, more urgent bill. However, paying just the minimum for the long haul can lead to long-term negative consequences.

Just like any time you have to deal with challenges in life, considering long-term consequences is vital to success. It can wake you up from thinking and acting like a sucker with your money. It can give you the laser focus needed to pay off debts so you can start building wealth. What’s at stake? You know, just your future.

So what are those looming, long-term consequences of making only the minimum payments on your credit cards?

Consequence #1: You end up paying mostly interest forever. OK, maybe not forever, but it will feel like it. By making only the minimum payments over a long period of time, you’re basically giving the credit card company free money—your money. You’re not even paying down the principal for the item you originally purchased with your credit card. You’re basically paying a subscription to the credit card company for holding your debt—a monthly service for which you get nothing.

Here’s an all-too-common example:

Let’s say that an unexpected expense tightens your budget. As it stands, you owe $10,000 in credit card debt at a 20% interest rate with a minimum payment of 2%. In order to cover the basics like housing, food, and medicine, you drop your credit card payments to the minimum amount of $200 monthly.

In this scenario, it will likely take more than 30 years and interest payments of over $35,000 to fully eliminate your credit card debt. The credit card company becomes richer, and your financial future is squandered.
 Consequence #2: You can hurt your credit score. When you hold high debt on a credit card for a long period, even if you’re making minimum payments on time, your credit utilization ratio (or the percentage of available credit you’re using) can rise. If it remains above 30% of your credit card limit for long, your credit can take a substantial hit¹—hurting your ability to borrow for a car, education, or home mortgage—and hinder qualifying for lower interest rates on those loans. This all equals financial limitations for your future—less cash flow, higher interest payments, less money to save for the future.

Consequence #3: You never start saving. Today, the responsibility to save and build wealth falls on the consumer—that’s you! Your 401(k) and Social Security check may fall dramatically short of providing the income you need for the lifestyle you want during retirement. The earlier you start saving, the better chance you have of closing the gap on the money you need for the future. Paying minimum payments on your credit cards is a dangerous habit that can prevent you from saving enough.

You don’t have to fall victim to these consequences. You can create a strategy to knock out your credit card debt by paying more than the minimums. How much more? As much as possible—until your credit card debt is gone. That big sigh of relief and your new ability to save will be well worth it!

An important caveat: Paying the minimum on a credit card while you build an emergency fund or pay down another debt can be advantageous, as long as you’re working with a licensed and qualified financial professional to reduce debt methodically.

Learn more about reducing debt in the book, HowMoneyWorks: Stop Being a Sucker. Email, text, or call me to discover how you can get a copy ASAP!

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How Inflation Eats Up Your Savings

How Inflation Eats Up Your Savings

Inflation is financial erosion, a slow and steady force that eats away at the value of money—YOUR money.

Here’s how it works. The trend is that over time, the prices of goods and services tend to rise. As a result, the purchasing power of your paycheck, your savings, and your retirement income is reduced.

The sucker ignores inflation—an abstract concept they may feel they have no control over. But the wealthy understand inflation and prepare for it—calculating the impact into their budget, their future purchases, and their retirement goals.

Here’s an example that drives it “home”…

Let’s say that in 1980 you received a $100,000 inheritance check. You were diligent enough to put the money into an account earning 2% annual interest. Your hope was that one day it would grow and be enough for you to afford a $200,000 dream home—a brick estate with a one acre yard, five bedrooms, three garages, and a pool in the back.

After waiting patiently for 40 years, retirement has arrived. The growth of your inheritance money had exceeded your goal—you now have over $220,000. Time to buy your dream home!

But while you waited, inflation was growing too. It increased at the average annual rate of 3.1%—more than tripling the average costs of goods… and houses.¹

Your $200,000 dream home with three garages and a pool in the back is now for sale at over $600,000.

The takeaway is that you can never ignore the impact of inflation on your goals for the future. You need to know how it could impact the value of your 401(k), the equity in your home, and the death benefit of your life insurance policy.

If you haven’t factored in the impact of inflation on your dreams for the future, there’s no time like the present. Consider scheduling a conversation with your licensed and qualified financial professional today to discuss strategies to beat inflation!

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¹ “Average Annual Inflation Rates by Decade,” Tim Mcmahon, InflationData.com, Jan. 1, 2021, https://inflationdata.com/Inflation/Inflation/DecadeInflation.asp

Are You Keeping Your Checking Account In Check?

February 16, 2023

Are You Keeping Your Checking Account In Check?

There are many culprits that can hamper your ability to build wealth.

Believe it or not, your checking account might be one of them.

A checking account is designed to give you quick, flexible access to your money—not grow it efficiently. That’s why the interest rate for an average checking account is negligible—around .03%.¹ It might as well be zero if you’re considering it as a savings tool for the future.

But you may already be thinking, “no one would consider their checking account a savings vehicle.” Then why do Americans have so much of their money stashed in them—an average of $10,545 per checking account, to be precise.²

The answer can only be that they don’t know how money works. Otherwise, they would have moved their cash to an account that leverages the power of compound interest with a higher interest rate long ago.

The sucker likes seeing a big balance in their checking account. The wealthy like seeing big deposits moved into their wealth building vehicles.

Do you have too much money sitting in your checking account?

As a rule of thumb, only keep enough cash in your checking account to cover everyday expenses like utility bills and groceries. Move what’s leftover into accounts and vehicles where it can accrue interest at a faster rate. And consider scheduling a conversation with a licensed and qualified financial professional to discuss which saving vehicles are best for you!

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¹ “Average Bank Interest Rates: Checking, Savings and Money Market Rates,” Stephanie Vozza, ValuePenguin, Sep 30, 2022, https://www.valuepenguin.com/banking/average-bank-interest-rates#:~:text=and%20CD%20Rates-,Average%20Bank%20Interest%20Rates%20in%202019%3A%20Checking%2C%20Savings%2C,Money%20Market%2C%20and%20CD

² “Average U.S. Checking Account Balance: A Demographic Breakdown,” Chris Moon, ValuePenguin, Sep 14, 2022, https://www.valuepenguin.com/banking/average-checking-account-balance.

You Are Richer Than You Think

You Are Richer Than You Think

The sucker believes that becoming a millionaire is next to impossible without a 6-figure annual income.

The wealthy know that nothing could be further from the truth.

It’s time to start thinking like the wealthy by recognizing that YOU are richer than you think.

Discovering your hidden wealth begins by following these three simple steps:

Reduce Your Debt

Increase Your Cash Flow

Save More Money

Zoom in to unpack each of these steps…

Reduce Your Debt.

Regardless of your salary or income, the first step to becoming a millionaire is to take control of your debt, rather than cursing the bills when they arrive in the mail each month and mindlessly paying the minimums. Taking control requires rethinking, organizing, evaluating, and reducing debt efficiently.

Rethinking means removing the emotion attached to your debt, whatever it may be—anger, embarrassment, shame, frustration, hopelessness. It’s like washing the dishes. A stack of plates and a period of time. It’s just another task to complete.

Write down all of your debts, total balances, monthly minimum payments, and interest rates for each. There they are. You can see them all. Now it’s time for war.

The next step is to evaluate which one to pay off first. Choose the debt with the highest balance or lowest balance—OR choose the one with the highest interest rate. With the first victim selected, start putting all the cash you can muster toward paying off this debt. Instead of buying lattes, burgers, lottery tickets, and that cool new graphic t-shirt—dump your cash into debt payments. You’ll have the rest of your life to fill your closet with new tees. Make sure you continue paying the minimum payments for all your other debts too—on time.

When you make the last payment for the first debt do a little happy dance (really important). Then select the next highest debt or lowest debt, whichever strategy you choose—and put as much monthly cash toward paying it off as you can. Include the money from the minimum monthly payment from the debt you just finished paying off. This gives you a compounding effect to your debt reduction strategy. The more debts you pay off, the bigger your debt paying power becomes and the faster you’ll start reducing those debts. The process will actually become fun as you feel the power that comes from knocking each debt out. Trust me.

Along with paying off your credit card balances, student loan debts, and car loans, you should also take a look at your mortgage if you’re a homeowner. If you can refinance your home for a 1% lower interest rate or even lower, it may make sense as a way to lower your monthly payments and lower your mortgage debt. Make sure you work with your financial professional to see if this is a fit for you.

Increase Your Cash Flow.

Now that your debt is moving down, you should have more cash freed up. But when it comes to cash flow, more is always the merrier. Here are some tactics for freeing up even more cash flow so you can make the jump from sucker taking a licking to millionaire in the making.

First, look at your monthly spending. Take the last two or three months and categorize everything that isn’t a necessity. How much did you spend on eating out, clothes, entertainment, impulse buys, home improvement, travel, and gifts? With the total in hand, cut the amount in half. You should also take a close look at your monthly subscription payments—how many streaming services do you really need? Cancel services that you’re not using.

So now you have your new non-essentials budget. Congratulations, you just increased your wealth-building power and simultaneously stopped living above your means!

Second, if you’re employed, request a meeting with your boss and ask for an increase in salary or wage or ask for more hours. All they can say is ‘no.’ If they agree, even if it’s just by a small amount, you just increased your cash flow once again. You’re on a roll.

Third, consider starting your own business. You may have thought about starting one in the past but it wasn’t the right time or you were too busy. Now is exactly the time to seriously examine the possibilities. What have you always wanted to do? What are your talents and abilities? What new business opportunities do these times present?

Fourth, you may not want to start a full-fledged business, but you could have a side gig or hustle to earn a little extra in the mornings, evenings, or weekends. Do you like making things, organizing, cleaning, serving, driving, crafting, zooming, or talking on the phone? What can you do with your time, enjoyments, and skills to make a little extra dough? There are endless opportunities out there for entrepreneurs. Find your fit and boost your monthly income—even if it’s only by a few hundred a month.

You have reduced your debt and increased your cash flow. Now you can use that extra monthly cash to start building wealth. The next step is to save like a millionaire.

Save Money.

Saving money on a consistent basis, regardless of the amount, is the true secret to financial victory. The strategy is simple. You take all the monthly cash flow you can spare and start saving it into an account with the best interest rate, growth potential, tax advantages, and principal protection you can find. This is where a financial professional is key. Don’t go it alone.

These habits have created more millionaires than any other story, company buyout, or stock market windfall in the history of the world. The 8th wonder of the world—the power of compound interest—is the magic dust that will always work in your favor if you’ll put it to work.

Saving money is more about the decision than anything else. Just like breaking the cycle of foolish spending, you must DECIDE to save money on a consistent basis. When you do, over the years and decades, you will win because you’re employing the Time Value of Money and the Power of Compound Interest. This is the one-two combo that millionaires use to reach their status.

With a little less debt and a little more cash flow, you can start saving a little bit over a long period of time to become richer than you think—perhaps even a millionaire!

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Face it. You’re a Sucker

February 2, 2023

Face it. You’re a Sucker

Most people don’t know how money works.

In 2018, a global survey asked over 100,000 people in 15 different countries 3 simple questions about interest, inflation, and risk diversification. 70% failed to answer all three basic questions correctly.1

The cumulative effect of that lack of knowledge can result in some sketchy decision making. So are you wondering how you’d do? See if you know the answers to the following questions…

• How much interest will you pay over the life of your car loan? • What about over the life of your mortgage? • How much life insurance do you need to protect your family financially? • How much do you need to save for retirement? • Are you on track with that? • If you’re not on track, at what age will your money run out? • How much will Social Security pay you each month? • How much monthly income will your 401(k) provide? • How old will you be when it runs out?

If you can’t answer questions like these, ask yourself if you’re like so many others who assume there will always be enough and hope everything will turn out OK.

How is that possible?

A lifetime of wild guesses and blissful ignorance explains why so many people facing retirement panic when they see how little they’ll be forced to live on for the rest of their days. Is this true for you? If so, you could find yourself saying “Wow! I thought it’d be a whole lot more.”

It’s time to face it. You’re a sucker.

Does that offend you? Good, it should. Let it be a wake-up call. When you don’t know how money works, you can be taken advantage of time and time again.

You’re a sucker. Own it and you’ve taken the first step toward not being one.

Being financially illiterate sucks. But knowing how money works will help you transition from sucker to student and from student to master. The whole point is never to be fooled again.

Not by banks.

Not by credit card companies.

Not by online offers.

Not by employers.

Not by family or friends.

Not even by the number one person in your life responsible for making money—YOU!

But how do you transition from sucker to student? Well, every student needs a teacher. YouTube videos and online tutorials are great if you need a quick fix around the home. But unless you’re REALLY handy, would you try to tackle a major plumbing job in your house based on a video you watched online? Of course not. It’s too involved and too important. You need someone with experience who does that sort of thing for a living—in other words, you need a plumber. In the long run, your personal finances are even more important than a busted pipe in your home. That’s why it’s critical to work with a licensed and qualified financial professional, who can help you repair your finances and keep them flowing smoothly.

Also, consider shadowing a money mentor. Who do you know that’s financially successful? Become their friend so you can discover what they did (and do) right. Observe their daily habits and how they make decisions. What time do they wake up? How do they use credit cards, if at all? Where do they put their money? Do they make financial decisions with their partner or separately? What you could learn from a financially-savvy friend could pay dividends down the road.

And if you need a beginner’s guide, consider the HowMoneyWorks: Stop Being a Sucker book. It’s a super-readable crash course on the basics of financial literacy that you can read in an hour but think about for a week. Just ask me how you can get a copy!

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¹ “The New Social Contract: a Blueprint For Retirement in the 21st Century —The Aegon Retirement Readiness Survey 2018,” Aegon—Center for Longevity and Retirement, May 2018, https://www.aegon.com/contentassets/6724d008b6e14fa1a4cedb41811f748a/retirement-readiness-survey-2018.pdf

Why the Wealthy Start Businesses

Why the Wealthy Start Businesses

It’s a fact—the wealthy start their own businesses.

Here’s a breakdown of the top ten richest people in the world…

One investor.

One sports team owner.

One heir.

One business magnate.

Six entrepreneurs.¹

That’s true further down the totem pole as well. Fidelity Investments research revealed that 88% of millionaires are self-made entrepreneurs.²

Why? Because businesses can create wealth that equals or surpasses savings, often in a quicker time frame.

Here’s how it works…

Let’s say your ideal retirement income is $5,000 per month. Just enough to rent a beachside condo, enjoy a night on the town once in a while, and visit the grandkids whenever you want.

But where will your retirement income come from? Not a job—remember, you’re retired!

Standard procedure is to save a nest egg and live off the interest. In this example, you would have to save $1.4 million at 5% interest to generate $5,000 monthly income.

That goal is fine if you’re 25 with enough cash flow to put away some each month. But what if you’re closer to retirement? You simply don’t have the years needed to unleash the power of compounding interest to grow your savings. You need retirement income, and you need it now.

That’s where starting a business can help.

As the business grows, the hope is that your income will too. If and when you reach your target income, you should have a strategy in place to step away from active operational management of the business and still enjoy cash flow. After all, you’re the one who took the risk of starting it!

This concept is called Wealth Equivalency. Simply put, building a business can create an income stream equal to living off the interest of your savings.

That’s why the wealthy start businesses. They know it’s an opportunity to create an income that’s equivalent to saving millions for retirement in a much shorter time frame.

So here’s the question—which one is more feasible for you?

Saving a nest egg that generates a $5,000 monthly income?

Or building a business that generates a $5,000 monthly income?

If you’re young, the answer might be saving. With time and compound interest on your side, you can build the wealth you need to retire with confidence.

But if you need income NOW, consider imitating the wealthy and starting a business. It may create an income that rivals saving on a far more realistic timetable.

Best of all, with the right mentorship and strategies, entrepreneurship doesn’t have to be a leap of faith. In fact, it can leverage skills, relationships, and hobbies that you already have!

If you want to learn more about creating a sustainable income for retirement, let’s chat. We can review your situation and see what strategies you can leverage to face the future with confidence.

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¹ “The 10 Richest People in the World,” Dan Moskowitz, Investopedia, Jan 3, 2023, https://www.investopedia.com/articles/investing/012715/5-richest-people-world.asp

² “The Ultimate List of Entrepreneur Statistics 2022,” Jack Steward, Findstack, Dec 5, 2021 https://findstack.com/entrepreneur-statistics/

How Rockefeller Made His Billions

January 19, 2023

How Rockefeller Made His Billions

I’ll bet you don’t think you have much in common with John D. Rockefeller.

After all, he was America’s first self-made billionaire.¹ At the time of his death in 1937, he was worth over $340 billion in today’s money. How rich is that? If you combined the wealth of Warren Buffett, Bill Gates, and Jeff Bezos, Rockefeller would still be richer. We’re talking hard-to-imagine rich. Think Scrooge McDuck doing the backstroke in his money vault—but even richer.

But Rockefeller wasn’t born with a silver spoon in his mouth. Before he became a mega-wealthy oil tycoon, Rockefeller grew up in a humble country home in upstate New York. The only thing that set him apart from his friends and neighbors (and you) is that he learned a pivotal lesson about how money works when he was just a kid.

At 14 years old, Rockefeller had saved up $50 ($1,500 in today’s money) selling turkeys and doing chores for neighbors. Like many 14-year-old boys, young Rockefeller received some shrewd advice from his mother.

She encouraged him to lend his $50 to a local farmer. It was arranged that the money would be paid back in 12 months with 7% interest. A year later, the farmer made good on the deal, returning to Rockefeller the $50 plus $3.50 in interest.

It was around this same time that a neighbor hired Rockefeller to dig potatoes for three days. Rockefeller was paid $1.12. Rockefeller’s New York Times obituary said that “on entering the two transactions in his ledger he realized that his pay for this work was less than one-third the annual interest on his $50, and he resolved to make as much money work for him as he could.”1

What if you had learned that your money could make money when you were fourteen? I’ll bet you would have spent less on movie tickets and clothes and done everything you could to put your money to better use! But many parents aren’t as savvy as Mrs. Rockefeller. Which is why their kids become adults who end up “digging up potatoes” their entire lives so to speak, just like their parents did.

Many adults have never discovered the power of compound interest. So they can’t show their children how to put money to work to build a future they could never earn with just hard work. But they should.

It’s not too late to get your family to start thinking like the Rockefellers.

Here are two practical, very doable things that you can use to leverage the power of compound interest for you and your family, starting today!

Find a high-interest account and start saving.

You probably don’t know any farmers who need quick cash. But that doesn’t mean you can’t put your money to work. Actually, the problem is usually that there are too many options! Fortunately, you, like a young Rockefeller, have wise counselors you can turn to. Contact a licensed and qualified financial professional to have a conversation about your vision for the future. They’ll have insights into which strategies and steps best align with your goals. There are many amazing ways to take advantage of the power of compound interest, even if you only have a small amount to put aside each month.

Teach your children about how money works.

Would Rockefeller have stopped digging potatoes and built an oil empire if he hadn’t discovered the capacity of his money to grow? We’ll never know. But the same is true for your kids. The sooner they learn that their money can earn money, the better chance they’ll have to stop wasting time and start seeking how to put their money to work.

Ask me for a copy of the HowMoneyWorks: Stop Being a Sucker book.

It explains concepts like the Power of Compound Interest and the Time Value of Money at a level that anyone high school age and above can understand. You might enjoy reading it yourself!

You have more in common with the wealthy than you’ve been led to believe. Their techniques can be yours. Don’t wait for financial wisdom to knock you on the head from out of the blue. Meet with a financial professional and start learning and teaching your loved ones about how money works.

Once you’ve done that, you’ll really be thinking like a Rockefeller!

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¹ The New York Times Book of the Dead: Obituaries of Extraordinary People, edited by William McDonald, 2016.

Why Everyone Wants Your Money NOW

January 5, 2023

Why Everyone Wants Your Money NOW

Instant Gratification Has Overtaken Your Financial Power.

“Waiting sucks!” Like weeds in a field, this wealth-strangling lie can overtake every financially illiterate mind. If you don’t know how money works, you may succumb to society’s financially destructive desire for instant gratification.

It’s time to learn how money works, Old MacDonald, because a field overtaken with weeds produces no harvest. Start pulling up the weeds of instant gratification by asking yourself this…

In today’s world you can buy now, one click order, get no interest down, and enjoy same day shipping—but have you asked why? Why is it so ridiculously easy for you to spend your money?

Is it…

A. Because they’re committed to your convenience? (You’re not that naive.)

B. Because you’ll buy from their competitor if they don’t? (Getting closer.)

C. Because they want your money, they want it all, and they want it now?

Know the answer? It’s “C.” Understand that your need for instant gratification is a conditioned response. From birth, you’ve been brainwashed to want everything ASAP. They know this—THEY’RE THE ONES who brainwashed you. Why? Because they want your money—all of it! Picture a tiny stopwatch inside every dollar you own. When the start button is pressed, the dollar starts earning interest. Each dollar is ticking away, earning money for someone. Is it you, or is it the institution that has your savings account, car loan, mortgage, student loan, paycheck, or your next pumpkin spice latte? Every dollar that passes through your hands will earn money for either you or someone else. Every time you put your hard earned cash in the hands of someone else, you’re handing out little money stopwatches that never stop ticking.

It’s time to reclaim the earning power stolen by your need for instant gratification.

Money you put to work today has the potential to earn more interest than money you put to work tomorrow. Why? Because it has more time to grow. Those who know how money works never want to waste a single day of earning potential.

Did you think it’s a coincidence that taxes are taken out of paychecks now but tax refunds are not paid until the next year? Ever wondered why financial companies hold funds for a few days rather than release them to you immediately? They pay it out only after they’ve squeezed out every possible day of earning.

They’re not doing anything wrong. They’re just taking full advantage of the Time Value of Money. It’s time you did too.

It’s good if this makes you mad. You should be—you’ve been treated like a sucker. Your logical mind and personal finances are covered with the weeds of instant gratification. This threatens ALL your goals for the future.

Start ripping the weeds out by reading HowMoneyWorks: Stop Being a Sucker today. Ask your HowMoneyWorks financial educator how you can get a copy immediately.

The book coupled with guidance from your licensed and qualified financial professional can help you increase your financial literacy, stop the counterproductive behaviors of instant gratification, and start thinking—and acting—like the wealthy.

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Can You Teach Your Kids How Money Works? (Yes!)

December 29, 2022

Can You Teach Your Kids How Money Works? (Yes!)

Who will teach your kids how money really works? Don’t count on school!

Only 17 states in the U.S. guarantee a financial literacy course during high school, and 4 of those states have some of the worst financial literacy levels in the country!¹,² It’s no wonder that only 28% of college students were able to answer 3 basic money questions about inflation, compound interest, and risk diversification.² Think about it; many kids who don’t understand the fundamentals of money are also pulling out huge student loans that they have no clue how to handle. They’re getting taken advantage of before they even graduate!

Think that’s scary? Here’s where things get even scarier. The simple fact is that many people don’t start learning about money until they’re already in deep debt and sense a looming crisis. By that time, even if it’s not too late to avoid a catastrophe, many of those people can face a lifelong struggle to achieve robust financial health. What’s the solution? People should start learning how money works in their twenties? Nope. As teenagers? No way. People need to start learning how money works as kids—long before they’re in charge of their own personal finances.

Researchers from Cambridge discovered that our money habits are basically formed by age seven.³ The deeply indebted college freshmen of today spending 50 bucks a month on lattes and energy drinks are the result of financial under-development. It’s like tossing the keys of a $200,000 sports car to a teenager with zero driving experience and saying, “enjoy.” The most likely result down the road—disaster. ($200,000 also happens to be less than the cost of a 4 year private college in America.⁴)

So what are your kids learning about money?

First, ask yourself what they are learning from YOU. If you’re like many Americans, your kids may think that money is supposed to be spent on what makes them feel good—right now. They might be completely unaware of the full power their money possesses to grow and build wealth and help them achieve their dreams.

Many parents do talk to their kids about working hard and earning money. They can, however, fail to bring them into the process of creating personal finance goals and showing them how to protect and grow their money to hit those goals.

Roll up your sleeves and consider showing your kids how money really works while their minds are little sponges and they haven’t made any money mistakes yet.

Here are nine tips to get you started:

  1. Read the book, HowMoneyWorks: Stop Being a Sucker, together.
  2. Discuss the concepts and 7 Money Milestones in the book.
  3. Let your kids in on some of your financial decisions and share a bit about your home budget with them so they understand the decisions you make for the family.
  4. Help them figure out ways to make money, save it, protect it, and watch it grow.
  5. Show them that putting all their money into a savings account is an opportunity for the bank to make money—not them.
  6. Explore smart tactics to avoid the impact of procrastination, inflation, losses, and taxes with their money.
  7. Use imaginary money and investment scenarios to teach them financial principles.
  8. Open an account for them with real money and take them through the entire process. Watch the money together each month as the balance changes.
  9. Have them accompany you to your next meeting with your financial professional, so they can ask a few questions of their own.

Perhaps your kids are older or maybe even have kids of their own. Know this—it’s never too late to start learning about how money works and teaching your kids about it too—no matter how old they are.

Let me know if you don’t have a copy of the book, How Money Works: Stop Being A Sucker. I’ll get you one ASAP! It’s packed with all the information you need to jumpstart your family’s financial literacy journey.

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¹ “How many states require students to take a personal finance course before graduating from high school? Is it 17 or is it 21?,” Tim Ranzetta, Next Gen Personal Finance, Nov 17, 2022, https://www.ngpf.org/blog/advocacy/how-many-states-require-students-to-take-a-personal-finance-course-before-graduating-from-high-school-is-it-6-or-is-it-21/?gclid=EAIaIQobChMIzdDgiKnL6wIV0_HjBx0h7ALCEAAYASAAEgItWvD_BwE

² “Financial and student loan (il)literacy among US college students,” Johnathan G. Conzelmann and T. Austin Lacy, Brookings, Oct. 15, 2018, https://www.brookings.edu/blog/brown-center-chalkboard/2018/10/15/financial-and-student-loan-illiteracy-among-us-college-students/#:~:text=Overall%2C%20undergraduate%20students%20in%20the,percent%20got%20all%20three%20correct.

³ “The 5 Most Important Money Lessons To Teach Your Kids,” Laura Shin, Forbes, Oct 15, 2013, https://www.forbes.com/sites/laurashin/2013/10/15/the-5-most-important-money-lessons-to-teach-your-kids/#4a5f97006826

⁴ “How Much Does College Cost?,” CollegeData, 2022, https://www.collegedata.com/en/pay-your-way/college-sticker-shock/how-much-does-college-cost/whats-the-price-tag-for-a-college-education/

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