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, 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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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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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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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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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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The holiday season is an ideal time for your kids to learn, teach, and model how money works.

Yes, the long lines and Black Friday stampedes have become synonymous with the worst of consumer excess and foolish spending. But with its joy and light, the holiday stretch also brings high expectations to give generously. That’s a noble cause if you know how money works, but it can be a slippery slope if you don’t. Having a giving spirit is an admirable trait and considering the needs of others should be part of every family budget if possible. However, overspending on gifts, no matter how good your intentions, can throw you drastically off course financially, stealing from your future and creating hardship for years.

The holiday season is a great opportunity for families to discuss when to give with a heart that’s three times bigger—AND—how to make money decisions like the wealthiest Who in Whoville.

Here are 5 surprisingly simple ways for families to teach and model essential lessons for children about how money works this holiday season.

Give your child cash… and teach them to save it.

Opening up a card is always a bit of a letdown on Christmas morning… unless it contains some cold hard cash! Gifts of money are perfect opportunities to teach children about the importance of saving. Before they blow their “present” on a new toy, in-app purchases, or candy, sit down and have a money conversation with them. Explain that the dough Santa left in their stocking has the power to grow and grow via compound interest. You don’t have to be a grinch and make them hoard all of it. But you might be surprised at how eager they are to save once they discover the growth potential of their money to help them purchase something even bigger and better down the road.

Help your child with their holiday budget

This process starts well before the leaves change colors and snow covers the ground. Collaborate with your kids to guide them in deciding how much they should spend per person over the holidays. Help them develop a post-holiday budget as well. Work with them to nail down a percentage of any holiday cash gifts they’re comfortable saving (20% is a good starting point) and hold them to it! Don’t be discouraged if they give you a low number. That money has time to grow and could still make a difference for their long term goals like buying a car, paying for their education, purchasing a home, or even saving for retirement.

Wants vs. Needs

Explain to your kids that the holidays are not about things. They’re about remembering what really matters, like relationships, family, memories, and traditions. Model self-control for your kids this season. That might mean foregoing luxury gifts, especially those that depreciate in value. Practicing financial discipline not only sets a great example for your kids to follow later in life, it’s also good for them in the short-term. Removing the stress of overspending and holiday debt can open the door to realistic expectations, peace of mind, and meaningful experiences. And for your family, a light-hearted mood during the season of giving will be worth its weight in gold.

Show your kids how price tags really work

Price tags are liars. The true cost of that $500 you spent on trinkets, toys, or tech will be far higher if you factor in future earnings had you saved that money. Make sense? This is a radical shift in thinking—a wealthy way of thinking. Giving is good, but consider also teaching your kids that when you buy something you’re also giving up the time value of that money—its potential to earn more money for you over time. Teach them that one day they may be able to have far more by being smart with their money now.

The real spirit of giving

The subtitle of the HowMoneyWorks book is Stop Being a SUCKER—not Stop Being a GIVER. No one wants to turn their kids into little Scrooges. Once they have the knowledge to start building wealth, they have the potential to give back in ways that would have been impossible for someone trapped in a cycle of foolish spending (which includes giving gifts they can’t afford). Teaching your children how money works means positioning them to have more for themselves AND to provide more for others. They’ll be able to give—and receive the joys of giving—for a lifetime.

Ask me how you can get a copy of HowMoneyWorks: Stop Being a Sucker. It explains these concepts in a way that makes it easy for you to teach your kids all about how money works.

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College can be a lot of things. Fun. Scary. Exciting. Confusing.

But one thing is for certain—it’s that time of life when students finally break away from their parents and start making their own decisions—like how to spend their money.

And it turns out they have no clue what they’re doing in that department—statistically speaking.

Only 25% of students entering university have had access to any previous financial education.¹ Is not knowing how money works the major reason why freshmen blindly contribute to the $1.75 trillion of total student loan debt that exists?² Of course it is. But taking on giant loans without understanding the full magnitude of their decision isn’t the only financial mine lying in wait for undergrads. According to a College Finance survey,the average college student had $3,280 in credit card debt.³

Massive student loans and thousands in credit card debt don’t position students well for post college success, prompting many of them to take a job they don’t care about, in a field they don’t want, for a boss they don’t like. The obligation to make debt payments, which the student once thought was far in the future, now robs them of their freedom to explore, grow, and develop.

If only they had been given a true financial education in high school—or even before, they would have learned the following financial literacy basics for college freshmen…

1. Manage your debt.

Student loans help millions of students fund an education that, on average, is worth about $2.8 million over the course of their lives.⁴ But it’s important to highlight that debt is nothing to take on lightly. Many students are unaware of the heavy burden they’re acquiring in the form of student loans and credit card balances.

The company Student Loan Planner reports that roughly 90% of borrowers experience significant anxiety due to their loan burden.⁵ Couple that with a 2015 survey by Equifax that revealed 55.7% of students listed ‘student loan debt’ as their top reason for not being able to afford their first home.⁶

Along with student loan debt, the average college student holds a credit card balance of over $3,000. Credit cards for students are often justified as a necessary lifeline to cover living expenses. In reality, they’re often used for frivolous, impulse purchases that contribute to 49% of students being saddled with permanent credit card debt in addition to their student loans.¹

If you can’t avoid using student loans and credit cards to afford your education and living expenses, follow these guidelines to help remove debt swiftly after graduation. With your psychological and financial future at stake, the key is to reduce your debt before an onslaught of new expenses (i.e., your mortgage, children, car payments) make it even harder to pay off.

First, get a part-time job or side-hustle if you haven’t already. Second, identify your credit card with the lowest balance. Third, put as much of your income towards eliminating that debt as you can. Once that’s done, move on to the next lowest card. Repeat until your credit card debt is a hazy memory.

2. Identify a money mentor.

There are two ways to gain wisdom. You can either make mistakes or learn from someone else’s. Finances are no different. Never again will you have such a perfect opportunity to find a money mentor than when you’re attending university. It’s like a learning shortcut where you get access to a whole lifetime of experience without a lifetime of making mistakes. You just have to keep an open mind and be willing to establish a real relationship with someone with financial know-how.

Your money mentor could be a parent, a grandparent, an uncle or aunt, the parent of a friend, a professor, or even a responsible upperclassman. Once you’ve identified your mentor, ask hard questions about how to spend and manage money. Pick your mentor’s brain for how they built their wealth, mistakes they made along the way, and advice for specific challenges you face. Show them your budget and have them hold you accountable for your spending decisions. Be willing to put in the work of being open, scheduling and spending time with your mentor, and implementing their advice. The connections and networks you build today will serve you long after you graduate!

3. Start building wealth NOW.

Look at your bank account. Then look at your income. They might not seem like much, but they’re the humble beginnings of your future wealth—if you play your cards right! Your money has more growth potential right now than it ever will again. Allow me to demonstrate.

Let’s assume you’re 20 and want to retire at 67 with a million dollars. You find an account with a 9% annual interest rate, compounded monthly. It would only take saving $113 per month to crush that goal. What’s more, you wouldn’t have to increase your saving as you get older to retire as a millionaire. Want to retire with more? Increase it. If you start saving $226 each month now—without ever increasing the amount—you’d have $2 million. If you’ve got the flow, and you want $4 million at retirement—make it $452 each month. Starting young is the most affordable way to build wealth with compound interest.

What if you didn’t start young? What if you decided to wait until you’re 35 to start saving? Those 15 years of procrastination means you’ll have to stash away $451 monthly just to reach your million dollar retirement goal. $452 monthly now for $4 million or $451 monthly starting at 35 for $1 million. You don’t need the wealth of a king or queen to enjoy the freedoms of royalty in retirement—if you start building wealth NOW. It’s your decision whether time robs you or robes you. Even if you start saving with less than these amounts, start the habit now to set aside a regular sum of money for your future.

4. Use a budgeting app.

Budgeting is important. It can also be a huge pain if you don’t know what you’re doing. Punching in numbers, setting up spreadsheet formulas, and stressing if that pizza delivery tip counts towards groceries can make tracking your expenses such an aggravating process that you don’t even bother. Fortunately, there are some excellent apps and websites out there that can take the hassle out of money management. Mint and Pocketguard, for example, are free budgeting apps that sync to your bank account and credit cards to allow for real time updates to your spending and saving goals. And it’s all conveniently located on your phone, just a few taps away. Scrap the spreadsheet, do a little research, and download a headache-reducing app ASAP.

A financial education isn’t like a sociology or history class. Those last for a few months, you learn tons of facts, you pass a test, and you move on with your life. Learning how money works is a lifelong process that will impact almost all of your daily decisions and future experiences. Few other skills will open your eyes to the exciting possibilities that life can offer. So hit the books (the How Money Works, Stop Being a Sucker book, to be precise) and start being a student of personal finance TODAY.

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People with a high level of financial literacy are able to make informed decisions by putting their financial education to work.

Understanding how money works is practical by nature and can be a make-it or break-it knowledge base and skill set for one’s life.

Financially literate people are able to organize their money to meet their future goals—regardless of what those goals may be—by simply being smart with money. This is usually best accomplished with the assistance of a financial professional.

Financial literacy is becoming increasingly essential in today’s evolving world. A lack of financial literacy could lead to a wide number of financial difficulties for people, contributing to important social issues in our nation including poverty, job scarcity, and wealth inequality.¹ It can also create stress that can have a negative impact on mental and emotional health.² Financial skills can help provide benefits that go beyond mere financial awareness. They can also lead to an improvement of personal well-being because those who are financially literate usually have greater success and peace throughout their lives.

To understand what financial literacy means it’s important to know and follow the correct steps—like the 7 Money Milestones—which can be found in the book HowMoneyWorks: Stop Being a Sucker. Having financial literacy adds to the values, skills, and self-confidence necessary to make insightful, strategic money decisions.

Yes, becoming financially literate takes work. But the outcome can greatly improve quality of life.

Financial literacy helps people understand relevant money concepts. Knowing about the Time Value of Money is a great example. This concept informs us that the money available now is worth more than the same amount in the future because of its ability to earn interest.

Concepts like this create urgency, inspiring people to increase their financial education, and then use that knowledge to take action and create healthy money habits.

__Financially literate people…

- Ask the right questions of their financial professional

- Are aware of the reasons behind their decisions

- Set aside part of their income on a regular basis

- Make plans for the future

- Protect their family in the event of sickness or premature death

- Set financial goals and make plans to achieve those goals

- Set aside savings for emergencies

- Keep their financial obligations under control

- Monitor their spending patterns

- Understand concepts such as loans, credit, and debt

- Are aware of the services banks provide

- Are knowledgeable about investment options

- Do not spend more than they earn

- Have an understanding of tax-related issues

One of the best resources that teaches the basic knowledge, skills, and behaviors of a financially literate person is the HowMoneyWorks: Stop Being a Sucker book. If you develop the skills outlined within, you can consider yourself well on your way to becoming financially literate.

— Tom Mathews

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Do the wealthy know ways to make money that are unknown to everyone else? You better believe it!

John D. Rockefeller, one of early America’s richest tycoons, once said, “I have ways of making money that you know nothing of.” How does that make you feel? Shouldn’t everyone know the best ways to make money and create a prosperous future?

But the fact remains. There are wealth-building principles that are common knowledge to the wealthy but are largely unknown by the majority of the population.

So why is the average citizen in the dark?

How money works is simply not taught in schools. Only 21 states in the U.S. teach at least one high school class in financial education.¹ Interestingly, all 50 states teach a class on sex ed. So the one thing you can learn on your own, they teach. And the one thing you’ll never learn on your own, they don’t. Go figure.

Actually, it does figure.

Think about it. If the financial industry were to educate consumers about money savviness, people might stop socking away so much of it in low-interest savings accounts that earn less than a 1% rate of return. And before you leave the branch do they offer you a brochure on financial concepts to help you get out of debt, avoid money missteps, and start saving like the wealthy?

Pfff—yeah right!

No. It’s like, if you’re dumb enough to open a low-interest savings account and take the free lollipop (it’s like their sucker litmus test), then they’ll try to sell you a car loan at 6% interest.²

What a deal. You earn less than 1%—they earn 6%. It’s like a lose-lose for you, but you still thank them on the way out.

But they don’t stop there.

With your new car loan monthly payment, you might run low on cash from time-to-time. But thanks to partnerships with credit card companies, the bank can also offer you a shiny new charge card—but “just for emergencies.”

Do they make it clear how much they charge for late fees before they sell you on the benefits and points you can earn? No, that’s what the back of the brochure is for—as far away from the exciting offer as legally allowed. And you can bet it’s the same customer who opened the savings account and took the car loan who never flips the brochure over. They can always count on a customer with a sucker in their mouth to help drive their profits from late fees.

Hard to fathom there are that many suckers? It’s true…

With an overall outstanding balance of $5,313, the average American has 3.84 credit cards, and 80% of all Americans have a credit card.³ All told, Americans owe just shy of $1 trillion.⁴

The financial industry thrives on customers who are stuck in the “Sucker Cycle” of foolish spending. While consumers are binging on Netflix, shipping on Amazon, and ordering from DoorDash, institutions are quietly leveraging the power of compound interest to make their customers’ money work for themselves. While consumers live paycheck-to-paycheck, financial institutions and shrewd businesses build profits sucker-to-sucker.

For most people, earning (and spending) a paycheck is the extent of their experience. But the wealthy know the real deal. To become financially independent, you must know the concepts and strategies to save, protect, and grow your money.

Did this article make you mad? Hopefully, it did.

So what do you do about it? You stop taking the sucker and you stop being the sucker. You learn how to take control of spending, protecting, saving, and investing your money. How? You do it by reading the book, “HowMoneyWorks, Stop Being a Sucker.” It will only take about an hour.

Don’t have a copy? Contact me and I’ll help you get one.

Use that anger to fuel action. Read the book. Then reach out to me and say, “Now that I know the ways of making money Rockefeller spoke of, I’m ready to chart my own course to financial independence.” We have a clear action plan for you to follow called “The 7 Money Milestones.” I’ll help you check off each one.

Let’s do it together.

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There’s an old saying: “What we think about, we bring about.”

The expression holds true over the course of our lives in determining both our struggles and our successes. What you think about becomes your reality.

What will your reality be?

It will largely depend on how you think about money.

If you’re like many, you think primarily in emotional terms. You get excited to buy something new. You grow frustrated when paying bills. Because you find the mechanics of money uninteresting and confusing, you end up like so many others—never learning how money really works.

No big deal, right? But here’s the thing about money. It’s not like cooking, golfing, or any other skill you can get by without. If you don’t know how to properly grill salmon, who cares? If you can’t drain a 20-foot putt, so what? But if you don’t know how money works, you might wake up every day wondering why life SUCKS.

That’s a strong word, but yes, not knowing how money works… sucks. It sucks up your time. It sucks up your freedom. And, most importantly, it sucks up your income. So where does it all go? It goes to your mortgage lender, your credit card company, your bank, Apple, Amazon, Netflix. You know—the guys who know exactly how money works. W.C. Fields said, “It’s morally wrong to allow a sucker to keep his money.”

This is what you’re up against. You become a sucker. They become wealthy.

The world is full of people who are happy to tell you what to do with your money.

Fortunately, you have tools at your disposal to transform your sucker mindset into a money mindset. Here’s how to start:

Test your literacy with the HowMoneyWorks challenge.

In five quick questions, you can discover if you have the knowledge you need to help make measured financial decisions and alter your future for the better. Ask me for the link and we’ll review your results together!

Read the HowMoneyWorks: Stop Being a Sucker book.

It’s designed to help you learn how money really works so you can stop being a sucker, start being a student, and be the one to call the shots throughout your life with confidence.

Meet with a financial professional.

When your car is broken, you go to a mechanic. So why not do the same for your finances? A licensed and qualified financial professional can give you the knowledge you need to answer questions like “How do I get the best rate on my mortgage?” and “How can I pay off my credit card debt?” and “Am I financially prepared for an emergency?” Plus, they’ll help you leverage that knowledge by working with you to prepare a financial roadmap for your future.

Grand failure or grand finale?

You choose. It all starts with your thinking. It all starts with knowing how money works.

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The average American reported that they lost $1,279 in 2019 due to financial illiteracy, according to a recent survey.¹

That’s enough to potentially cover a mortgage payment or car repair bill. If the assessment is accurate, that would mean the country lost $307 billion last year simply because citizens were clueless about how money works. (For reference, the entire annual GDP of Pakistan in 2019 was $278.22 billion.²)

But the situation is far worse than you might imagine.

The result of financial illiteracy is far greater than buying things you don’t need, sinking deeper in debt, and mismanaging your cash by shoving it all in low-interest savings accounts. It’s costing you the opportunity to truly build wealth and pursue your dreams. That’s the true price tag of financial illiteracy.

The opportunity cost of financial illiteracy.

Think about a decision you wish you could redo. Maybe you missed out on an awesome job or experience because you chose a safer option or didn’t know what huge potential you were letting slip by. That’s called opportunity cost. It’s why you kick yourself for selling your home a year before a sellers’ market explodes or why you wish you’d studied abroad for a semester in college. Who knows what your life would look like now if you had just been able to see the future!

You need to start realizing that every dollar in your bank account is bursting with potential. What if the $1,279 that Americans think they lose every year was in an account earning 8% interest that compounded monthly? That squandered cash would grow to $13,987 after 30 years. That’s a much closer estimate to how much financial illiteracy actually costs Americans every year. We’re losing $1,279 every year plus however much that money could have grown if we had just known how money works.

The personal cost of financial illiteracy.

But there’s more to the opportunity cost of financial illiteracy than just numbers. It can cost us the lifestyle that we’ve been daydreaming about. Financial instability and unpreparedness can result in massive emotional and mental stress that can take a serious toll on health and relationships. It can limit educational opportunities for our children. The true price tag of money ignorance isn’t just dollars in a bank account; it’s the ability to live our lives in confidence and to pursue our dreams.

The book, HowMoneyWorks: Stop Being a Sucker describes financial illiteracy as the #1 economic crisis in the world. As you can see, that’s not an exaggeration. Let me know if you want to learn more about the severity of our global financial ignorance pandemic and how it’s impacting you right now. I can get you a copy of the book and help you see the financial opportunities that surround you—if you just know how to take advantage of them!

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Lugging around, on average, $38,000 of personal debt is exhausting.¹

It can deplete the power of your personal income until you barely have enough left to cover the monthly bills. You know it’s not a matter of IF you should eliminate debt. It’s a matter of HOW.

You have two basic debt destroying strategies at your disposal, each with different strengths and weaknesses. They’re called the Debt Avalanche and the Debt Snowball.

The Debt Avalanche.

The Debt Avalanche starts with a bang. Identify the debt with the highest interest rate and immediately begin to pay it down. Make the minimum payments on all your other loans, but direct everything you can at eliminating the largest financial threat you’re facing. Once it’s paid off, take that extra money you’ve freed up and move on to the next highest interest rate debt. You’ll kickstart an unstoppable force of tumbling debt that will carry you all the way down to your smallest payment—and then zero debt.

Technically speaking, the debt avalanche is the most effective way to become debt-free. The math speaks for itself; paying off that high interest loan should free up a significant chunk of cash that can then be used to even more rapidly wipe out the next debt. The smaller rates won’t stand a chance against your newly freed up cash flow and will be swept away in your debt-removal path.

The Debt Snowball.

But following the math isn’t always the best strategy. High interest debts can appear overwhelming and it’s easy to get discouraged if you don’t quickly see a dent. All the number-crunching in the world won’t help if you abandon your debt management strategy before you make any significant progress! That’s why the debt snowball leverages the power of psychology. Find your smallest debt on the list (regardless of the interest rate) and pay it down as quickly as possible. You’ll feel good about your accomplishment, as you get the ball rolling. Use whatever cash you freed up from eliminating the smallest debt to go towards the next smallest. Start working your way up until you’re ready to confront your largest loan. By that time you can use the free cash at your disposal to dispatch the final debt boss as quickly as possible!

The debt snowball uses your brain’s wiring to respond to rapid rewards. Crushing a goal feels good! Knocking out that first loan, as little as it may be, motivates you to move on. Is the Debt Snowball a slower process than the Debt Avalanche? Maybe. But it might be a more successful, manageable strategy if you’re intimidated by the largest debt that towers over your personal finances.

It’s always wise to seek guidance from a licensed and qualified financial professional when drawing out your debt reduction battle plans. They’ll help you prepare an emergency fund, identify the best strategy for you, and refine your budget to free up as much cash as possible!

Then suit up with your mittens, coat, and beanie—it’s time to trigger an avalanche or get the snowball rolling!

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If you’re reading this article as a twenty-something, congratulations!

By the time you’re done, you’ll know more about building wealth than many of your peers—and even people older than you, too.

Here are a few actionable truths for the start of your financial journey…

Your future depends on your financial education.

Until you understand how money actually works, you’ll lack both the knowledge and motivation to seriously build wealth.

Read How Money Works: Stop Being a Sucker to discover the basic concepts that you should have been taught in school.

Before long, you’ll know how you can put what you learn into action.

The time to start saving is NOW.

It’s simple—the longer your money grows via compound interest, the greater your potential for building wealth.

Collaborate with a licensed and qualified financial professional you can trust to find the right growth vehicles for you. Then start saving.

Speaking of saving…

Save whatever you can—even if it doesn’t seem like much.

You can only save $25 per month? That’s not too little to make a difference—time, consistency, and compound interest can transform even small monthly savings into a foundation for your financial future.

As your income increases, scale up your savings to match.

Take ownership of your income.

If you’re in your twenties, the skyrocketing cost of living is among the greatest threats to your ability to build wealth. As prices rise, the less income you have to save.

So what can you do if your paycheck is lagging behind the cost of living?

A common solution is to create a tight budget. But you can only cut back costs so much, especially if prices keep inching up.

That’s why it’s also essential to find ways to increase your income. Asking for a raise, finding a new job, and using your skills to start a side hustle are all strategies you might leverage to boost your earnings without launching a new career or going back to school.

Manage your debt before it derails your finances.

Make no mistake—ignoring your debt is dangerous.

It doesn’t take long for those monthly payments to completely consume your income—and your ability to build wealth.

Manage it now, before years of interest payments cost you a potential fortune.

Now is the time to secure proper financial protection.

Few young people realize that their twenties can be the perfect time to buy affordable life insurance.

That’s because the premiums for life insurance are based on risk of death, which, on average, tend to be lower in your twenties than later on.

Meet with a financial professional and explore which options are best for you. You may be surprised how much protection you can secure at a price that fits your budget.

If you take one thing away from this article, let it be this—you’ll likely never be better positioned to build wealth than in your twenties. Implement just two of the ideas in this article, and you’ll be miles ahead of your peers. Implement them all, and you’ll be well on your way to a prepared financial future.

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If you read this blog before, you know how to find your credit report and credit score.

But what’s your game plan if you don’t like what you see? A low credit score can make getting and/or paying for a mortgage or car loan much more difficult since lenders are more likely to charge you higher interest rates.¹ Insurers, employers, and even landlords sometimes factor your score into their decision-making process.¹ There are few parts of your life that will be unaffected!

Boosting your score is a key step in helping to achieve financial independence and pursuing your dreams. You basically have two plays at your disposal to start putting credit score points on the board. Read on to see what they are!

Defend your score. Let’s say you get your credit report back and notice something’s wrong. Maybe your credit card company incorrectly reported a late payment or there’s negative information that’s now expired and can come off the report. Errors on your report can sabotage your credit score, so it’s important that you rally to defend your creditworthiness!

First step is you’ll need to write a letter to the credit reporting agency that’s in error. State your name and address and exactly what you’re disputing. Hunt down documents that will support your case and include those as well. The Federal Trade Commission has a sample dispute letter you can access on their website.²

If the credit agency agrees with your dispute, they’ll adjust your credit report accordingly and send you a new copy. You can also request that they send the revised report to companies that viewed the flawed version. If the credit agency denies your claim, you can take the dispute to the Consumer Financial Protection Bureau.³

Attack your score. You might see your score and realize that it’s on the low end. You’ve been late on payments, you always max your credit cards, and it shows. So what can you do? How do you go on the offensive and start lifting your number?

Your first volley is to start paying your bills on time. See if there are ways of automating your payments to make them as hassle free as possible. Second, make sure that you don’t max out your credit cards. Borrowing as much as possible at every opportunity can wreak havoc on your score. That doesn’t mean you should necessarily close all of your credit cards (that can negatively impact your score as well). But come up with a plan to limit your temptation to use plastic and start paying with cash as much as possible. Finally, avoid opening up new lines of credit, especially all at one time. Credit reporting agencies will look at how many creditors have inquired about your records to get an idea of how much debt you might accumulate.

Taking your credit score from a landslide win for lenders to a win for your bank account takes time and work. Remember that you have resources. The Federal Trade Commission has pages of consumer information on credit reporting and scoring that are 100% free and just a click away.⁴ And having a financial advisor in your corner can help boost your chances of turning around your credit score!

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Women earn 82 cents for every $1 earned by a man.¹

As women, we take time away from our careers to care for children, parents, and partners. Interruptions like these can significantly impact a woman’s chance for promotion, ability to earn higher income levels, and—for some women—vesting in full retirement benefits.²

The COVID-19 crisis has made it even harder for women. Without childcare, mothers of young children have had to reduce their work hours 4-5 times as much as fathers, widening the gender gap in work hours. It may seem small or even temporary now, but it heralds a big step backward in the progress women have made in gender equality at work. Fathers—on the other hand, who continued to work full hours during the pandemic, will likely benefit from upcoming promotions and raises over the next couple of years.³

Talk About Money

If we want change, we need to start having open conversations about money. We should talk with our friends and co-workers about money over lunch. We should talk to our families and our kids about money at dinner. We have to talk about the things we’re concerned about, and stop keeping silent because we’re embarrassed, guilty, or ashamed. Have you thought about these questions:

• Can I make more money?
• How do I stop living paycheck to paycheck?
• What’s the best way to reduce my debt?
• Do I have enough money to retire?

As women, we’re comfortable talking about anything and everything with our friends—except for money. It’s that one boundary we rarely cross. The majority of women would rather talk about their own death before they’ll talk about money.⁴ When women start asking questions and talking openly about things that are important to us, the world changes. There is power in our words and intentions.

Save More Money

From a financial perspective, women say their biggest regret is not investing enough money. We hold back because we don’t feel like we know enough.⁵ Banish the doubts and do 2 things. First, start your journey to learn how money works. It’s not as complicated as you may think. Focus on the basics like the power of compound interest, the time value of money, and the Rule of 72.

Second, develop the habit of setting aside money every day or every week. This can be money from your current discretionary income. If you don’t think you have any extra income, then find it by reducing your expenses or create it with an increase in your income. Skip the latte, bag your lunch, or cut out something extra in your day or week. Without taking into account any potential growth from investing, the chart below shows how saving a little bit every day can add up over time.

The Next Normal Doesn’t Have to be the Old Normal

We may not see equal pay or equal wealth in 50 or 100 years or more. The traditional workplace is outdated. We can’t expect the Next Normal to be any different from the Old Normal unless we each take steps to bring about change for ourselves. It all starts with bringing our concerns into the light with real questions and open conversations.

— Kim Scouller

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Lenders know all about your credit score.

A good score means they should give you a competitive rate or you might go elsewhere. A bad score means they can crank up your interest rate and make your money work for them.¹

Do you know what your credit score is and where it comes from? It shouldn’t be a mystery. So how do you find out what your score is before getting gouged for the foreseeable future?

Reports and scores.

Let’s start by fleshing out the concept of credit scores. Certain companies collect information on you—like payment history, the number and type of accounts you have, whether you pay your bills on time, collection actions, outstanding debt, and the age of your accounts.² This debt rap sheet is called your credit report. Its goal? To determine how reliably you’ll repay lenders if they lend you money.

Data from the credit report gets run through an equation. Each algorithm is slightly different at each credit reporting company, but they all spit out a number that’s supposed to estimate how likely you are to pay off a loan. High scores mean you’re “credit worthy”, low scores mean you aren’t. Pretty simple, right?

How do I find my personal credit information?

Despite what you might think, credit reports are actually easy to find if you know where to look. The government mandated that the three major nationwide credit reporting companies (Equifax, Experian, and TransUnion) offer you a free credit report every 12 months. All you have to do is head over to annualcreditreport.com and request your report.

Credit scores are a bit less straightforward. The government doesn’t mandate free credit score disclosures, but there are still ways to find them for free. Some credit card providers, banks, and lenders participate in FICO Score Open Access Program, making it a breeze for regular people to check their credit scores.³

Keeping up with your credit report and credit score might feel like one of those necessary evils, however nurturing and maintaining them can pay off. What should you do once you get your report and score and you don’t like what you see? That’s what we’ll cover next time

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So, you’ve got a shiny new emergency fund. Congratulations! You’ve officially completed Milestone 3 of the 7 Money Milestones.

It’s a turning point in your journey towards real wealth. You now have the resources to extinguish financial fires without resorting to debt.

But just because you have an emergency fund doesn’t mean that you can start pulling from it willy-nilly. If your emergency fund starts leaking money, you may find yourself staring down a financial forest fire with an empty bucket.

Here are two simple rules for creating a watertight emergency fund that can be there for you in your hour of need…

Rule #1: Your emergency fund is ONLY for unexpected emergencies.

That’s all. It’s not for last minute birthday presents, much needed spa days, or irresistible Black Friday sales. It doesn’t matter if it sits in your checking, savings, or a separate account—as long as it doesn’t tempt you to use it for anything but a true emergency.

Rule #2: If you need it, use it.

If you’re facing a broken down car, a leaking refrigerator, or a kid with a knocked out tooth, use the money in your emergency fund. Fix the car, replace the fridge, pay the ER fees. That’s what it’s there for. Just make sure that afterwards you add back a little money every month until your emergency fund is full again.

Follow these two rules and your emergency fund will be there when you need it most. It’s the foundation of financial security as you conquer the remaining Money Milestones without fear of unexpected setbacks.

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Cash flow is the money you have available to spend or save… and it’s perhaps the most important metric of your financial health.

To be precise, cash flow is the net amount of money flowing in and out of your accounts each month.

If you have more cash flowing into your accounts each month than out, you’re cash flow positive. If you have more cash flowing out than in, you’re cash flow negative.

Why is it so critical? Because positive cash flow gives you options.

It means you have money at your disposal for building wealth, securing financial protection, and creating an emergency fund. You may even have enough positive cash flow to treat your family to a nice vacation.

Negative cash flow restricts options. You may have to choose between affording necessities and building your future.

Fortunately, calculating cash flow is really simple.

First, write down how much cash is entering your primary spending accounts from all sources. That covers dividends, rental income, side hustle income, and employment income.

Note: You’ll want to exclude things like asset appreciation for your house or investment accounts—you can’t access that cash in a pinch, so they don’t impact your monthly cash flow.

Then, list how much cash is leaving your accounts each month. Remember to include everything from living expenses to money flowing into wealth-building accounts to the miscellaneous things that come up day-to-day.

Finally, subtract the total out-flowing cash from the total in-flowing cash.

The remainder is your monthly available cash flow. That’s your existing financial power for doing things like eliminating debt or going all out on building wealth.

If that number is closer to zero than you’d like, don’t sweat it. By completing this exercise, you should have an inkling of where you’re overspending so you can cut back accordingly. It may also be the wake-up call about your income—the best way to boost your cash flow is to increase your income!

But you won’t know where you stand until you do some number crunching and find out. Don’t wait—calculate your cash flow today, and then review your results with a financial professional.

Together, you can strategize how you’ll leverage—or increase—your cash flow so that you can begin building wealth.

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How much cash do you have left at the end of the month after you’ve covered the essentials AND treated yourself? (I’m guessing not much.)

Wish your paycheck went a little further? You’re not alone—not by a long shot. Most Americans are living paycheck-to-paycheck and saving little to nothing. So how do you increase your cash flow so you can stop living in the Sucker Cycle and start saving and investing more?

In the book, HowMoneyWorks, Stop Being a Sucker, we attack this challenge head on in Milestone 5 of the 7 Money Milestones.

Here are a few tips to get your cash flowing towards your future…

Redirect your cash flow

There are a million little things that siphon away your paycheck. Credit card debt, monthly subscriptions, and your fast food habit all chip away at your income. This “death by a thousand cuts” is a foolish spending cycle that prevents you—and countless other suckers—from creating an emergency fund, protecting your income, and building wealth for the future.

That’s why it’s so important to make and maintain a budget. It’s like a map of where your cash is going. Once you have that knowledge, you can figure out where you need to dial down your spending and start redirecting your cash. Don’t get too detailed. You don’t need to get overwhelmed by spreadsheets. Try creating a one-page list of expenses, freeing up as much cash as possible. Take your budget to your financial professional and discuss how best to use this available cash.

Open up new income streams

Budgeting and cutting back on spending might not be enough. Life throws plenty of unexpected (and expensive) problems at us that might not have a budgeting solution. You may need to look for new income streams to maintain the lifestyle you want while also saving for the future.

You’d be surprised by how many possibilities there are to create additional income streams—many of which offer the chance to make money from home. Maybe now is the time to discover that your favorite hobby or area of interest is actually a way to earn some cash. That could look like a side hustle or weekend gig, but you might find that your skills and ideas are full-time business opportunities just waiting to happen! Research which of your ideas and skills are in demand, figure out how much time and effort it will take to get started, and decide how much time you’re willing to commit. (It could be easier than you think!)

Increasing your cash flow can open up a whole new world of opportunities. That extra money you have from cutting back on takeout and streaming services could be how you fuel the power of compound interest and finally start saving for retirement. That several hundred dollars you bring in from teaching guitar lessons each month could be how you pay off your credit cards and free up even more cash. There’s no doubt your options can really open up once your cash starts flowing!

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