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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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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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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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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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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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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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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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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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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If you don’t think there’s anything awe-inspiring about compound interest—think again.

Albert Einstein asserted that it’s mankind’s greatest invention. He deemed it “the eighth wonder of the world”.¹ That’s the same guy who came up with the theory of relativity! On the other hand, Thomas Aquinas, the influential medieval philosopher and theologian, thought charging interest was unnatural and unjust.² How could a coin grow more coins without dark magic at play? That’s not how money works, right?

If you’re still scratching your head wondering why they had such strong reactions, let’s break down how compound interest works and see what the hype is really about!

What is compound interest? Merriam-Webster defines compound interest as “interest earned on principal plus interest that was earned earlier.” Let’s clarify that definition.

Let’s say you put $10,000 into a bank account that pays 5% interest annually. After 1 year, the bank will pay you $500 for letting them hold your money. The next year they’ll pay you 5% of $10,500, which comes out to $525. You now have $11,025. This will keep repeating until you withdraw your money.

In the short term, that doesn’t seem like such a big deal. Having an extra $1,000 is nice, but that won’t get your family to Disney World and back. However, over time those little gains start to accelerate. After 10 years you would have $16,289. Another 10 years would bring the total to $26,533 (more than double what you started with). After 50 years your $10,000 would have grown into $114,674. That’s over 10x as much as you started with! And that’s with no effort on your part. Your money is growing more money!

Things to consider A few things to keep in mind when working with compound interest. Your interest rate is a key driver on how quickly your money will grow when it’s compounding. Swap out the 5% interest rate for 1% and you’ll only wind up with $16,446… after 50 years. But crank the rate up to 10% and your 50 year total is $1,173,909!

Monthly contributions also make a big splash on your compound interest outcome. Just contributing $100 a month to your initial $10,000 dollars with a 5% interest rate more than triples your total to $365,892!

So… is it magic? Those calculations may seem like sorcery. But you don’t need a book of magic spells to leverage compound interest and put your money to work. It just comes down to simple math that we’ve known about for centuries.³ The key to growing your money is to think of it like a seed rather than something you exchange for a good or service. Make plans to meet with a licensed financial professional to discuss how the power of compound interest can help lay the groundwork for your savings strategy.

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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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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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In our book HowMoneyWorks: Stop Being a Sucker, we introduce the Rule of 72, a mental math shortcut for estimating the effect of any growth rate—from quick financial calculations to population estimates.

This formula is especially useful for financial estimates and understanding the nature of compound interest. Rates of return may not be the easiest subject for consumers since it isn’t taught in schools, but this simple rule can help show the significance of a percentage point here or time horizon there.

Here’s the formula: 72 ÷ Interest Rate = Years to Double. If you know the interest rate (or rate of appreciation) or the time in years, dividing 72 by that number will give you a good approximation of the unknown number.

When will your money double?*

72 ÷ 1% = 72 years to double

72 ÷ 3% = 24 years to double

72 ÷ 6% = 12 years to double

72 ÷ 9% = 8 years to double

72 ÷ 12% = 6 years to double

Here’s an example: If you’re receiving a 9% rate of return, just divide 72 by 9. The result is 8. That means your money will double in approximately 8 years. Maybe that’s not fast enough for you and you prefer your money to double every 5 years. Then simply divide 72 by 5. The result is 14.4. Now you know you need a 14.4% return to achieve your goal.

This rule, long known to accountants and bankers, provides a close idea of the time needed for capital to double.

If you think that a difference of 1% or 2% is insignificant—think again! You seriously underestimate the power of compound interest. If one account appreciates at 9% and another at 12%, the Rule of 72 tells you that the first will take 8 years to double while the second will need only six years. This formula is also useful for understanding the nature of compound interest.

Examples:*

• At 6% interest, your money takes 72 ÷ 6 = 12 years to double.
• To double your money in 10 years, you need an interest rate of 72 ÷ 10, or 7.2%.
• If inflation grows at 3% a year, the prices of things will double in 72 ÷ 3, or 24, years. If inflation slips to 2%, it will double in 36 years. If inflation increases to 4%, prices double in 18 years.
• If college tuition increases at 5% per year (which is faster than inflation), tuition costs will double in 72 ÷ 5, or about 14.4, years.
• If you pay 17% interest on your credit cards, the amount you owe will double in only 72 ÷ 17, or 4.2, years!

The Rule of 72 shows that a “small” 1% change can make a big difference over time. That small difference could mean buying the house you want, sending your kids to the college they choose, retiring when you wish, leaving your children the legacy they deserve, or settling for… something less. Doing the math with the Rule of 72 can give you critical insight to hit your goals down the road by shifting your strategy accordingly.

By the way, the Rule of 72 applies to any type of percentage, including something like population. Can you see why a population growth rate of 2% vs. 3% could be a huge problem for planning? Instead of needing to double your capacity in 36 years, you only have 24. Twelve years were shaved off your schedule with one percentage point faster growth.

The Rule of 72 was originally discovered by Italian mathematician Bartolomeo de Pacioli (1446-1517). Referring to compound interest, Professor Albert Einstein (1879-1955) is quoted as saying: “It’s the greatest mathematical discovery of all time.” He called it the 8th Wonder of the World—it works for you or against you. Make sure you put this shortcut to work the next time you consider an interest rate. When you save, it works for you. When you borrow, it works against you!

— Tom Mathews

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Your money is worth more now than ever.

The rich know that. They’ve conducted the surveys and done the market research to figure out how to convince you to fork over as much of your cash as possible right now while it’s at its maximum potential.

But… why?

Besides inflation, why is your money any different today than it will be tomorrow? It comes down to a simple concept that has the power to change your life. Allow me to explain.

Let’s pretend inflation didn’t exist and that your money today will have the exact same buying power as it will in the future. Someone offers you $100 either today or in 5 years. Obviously, it would be nice to have the money now. But, technically speaking, it wouldn’t really make a difference when you got the cash. In our inflation-free imaginary world, that money could get you the exact same amount of stuff today as it would at any point in the future.

Or would it?

What if you took that $100 payment and put it to work? You put it in a place with 8% interest that compounds annually. At the end of a year that initial $100 will have earned you $8, bringing your total to $108. The next year you earn 8% of $108, bringing your total to $116.64. After 5 years, your $100 will have grown into $146.93. That’s nearly a 50% increase!

In other words, your money has more time to grow today than it will tomorrow. It has more earning potential right now than in 10 years or in 5 years or even in a week! This simple but powerful truth is called the Time Value Of Money.

So what does that mean for you? What’s the bottom line?

It means TODAY is the time to put your money to work.

The clock is ticking. The earning power of your paycheck is slowly ebbing away. The time to stop being a sucker and start building your future is right now!

To learn more about the Time Value of Money, refer to the chapter by the same name in our book, “HowMoneyWorks, Stop Being a Sucker.” Don’t have a copy of the book? Contact me to get one—TODAY!

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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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Your financial education must include both knowledge AND what steps to take. It must teach you wealth building concepts AND wealth building strategies.

If you’re lacking knowledge, it’s impossible to start your journey to financial independence because the money decisions you make without it are likely to do more harm than good.

But knowledge alone is not enough. Knowledge without guidance leads to information overload and analysis paralysis.

It’s what all financial professionals hear: ”You’ve taught me about the Power of Compound Interest. Great! And now I know about the Time Value of Money. Wonderful! But where the heck do I find an account with the interest rate I need to reach my financial goals?”

Tony Robbins said it best. “Knowledge is NOT power. Knowledge is only POTENTIAL power. Action is power.”

So before you create a strategy to start building wealth, learn how money works. Discover the financial illiteracy crisis and its impact on your peace of mind. Learn about the Power of Compound Interest and the Time Value of Money and how those concepts can make your money earn more money. Realize the wealth building potential of starting a business.

Then, get with a licensed and qualified financial professional. Start working through The 7 Money Milestones. They’re time-proven steps that can move you from financial hardship to financial independence. The Milestones are…

• Financial Education

• Proper Protection

• Emergency Fund

• Debt Management

• Cash Flow

• Build Wealth

• Protect Wealth

Why these steps? Because they apply what you’ve learned to simple strategies, like…

• Securing proper financial protection for your family

• Leveraging a side hustle to boost cash flow

• Protecting your wealth with an estate plan

The Milestones take your newfound knowledge and transform it into action. They move you from having the potential to be wealthy to walking the path towards securing your future.

In short, they help unlock your power to create the future you want.

Learn how money works. Follow the Milestones. Take control of your financial future. With this education, you can be on the road to wealth in no time flat.

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It’s official—Millennials are serious about building wealth.

According to a recent study, Millennials (ages 25 to 40) have an average of $51,300 in personal savings, while their retirement accounts have an average balance of $63,300.¹

That’s far higher than it was just a few years ago. In 2019, they had saved just $23,000 for retirement.² They’ve nearly tripled their wealth in less than 3 years!

It’s no surprise. Few generations have gotten kicked in the pants quite like Millennials. Between recessions, pandemics, frenzied housing markets, and international instability, they’ve learned that wealth isn’t a luxury—it’s an absolute necessity.

But Millennials still have a long way to go before they retire wealthy. Here’s what they need if they’re going to arrive at their long-awaited destination…

Millennials must know—and use—the Rule of 72.

The Rule of 72 is a simple mental math shortcut that estimates when your money will double, given a fixed compounding interest rate. Here’s what it looks like…

72 ÷ interest rate = years to double

It’s simple, it’s powerful, and it might change the course of your financial future.

Let’s say you’re 35 years old with $60,000. That’s a solid start. But how can you turn $60,000 into $1 million by age 67?

Think of it like this—you need to double your money just over 4 times to reach $1 million.

Now, subtract your current age from your retirement age. That’s how long you have left to build wealth.

67 - 35 = 32 years

So you have 32 years to double your money just over 4 times. In other words, your money needs to double every 8 years.

Now it’s time to use the Rule of 72, but with a slight twist—swap the interest rate with the years for each double.

72 ÷ years for each double = interest rate needed

Plug in your numbers, and you get…

72 ÷ 8 years = 9% interest rate

In this scenario, you’d need just over a 9% interest rate to retire as a millionaire.

Armed with that knowledge, you’ll be better able to see through gimmicks like a “high-interest savings account” that offers .06% interest. You’ll also be left with just one question—where can you find an account with 9% interest?

Answer that question with your financial professional, and you’re on the right track for retiring wealthy.

Try the exercise above with your age and personal savings. What was the result? Then, contact a financial educator who can help you fine-tune a strategy to reach your retirement goals.

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No one has money. You may think other people have money, but they don’t.

For each generation, it’s the same.

They don’t get taught how money works from K-12.

High school graduates head off to college. They don’t learn how money works there, either.

College graduates enter the workforce and start earning a paycheck… and spending their paycheck.

Soon, they enter a cycle of foolish spending. Earn a paycheck. Spend a paycheck. Earn a paycheck. Spend a paycheck.

They join the hundreds of millions living paycheck-to-paycheck. Always spending. Barely saving, if at all.

When retirement finally arrives or accidents or illness occur later in life, a terrible realization dawns on them…

They have no money.

According to a recent survey…1

◼ Gen Z adults have saved an average of $37,000 for retirement ◼ Millennials have saved an average of $63,300 for retirement ◼ Gen-Xers have saved an average of $98,900 for retirement ◼ Baby Boomers have saved an average of $138,900 for retirement

Only Gen Z and Millennials are even close to being on track for retirement. Gen-Xers and Baby Boomers fall short of bare minimum savings by over half.

It’s not for lack of income—many Americans make enough to put their money to work.

Rather, it’s because they lack knowledge. They just don’t understand how money works beyond earning and spending.

The takeaway? If you’re a Gen-Xer or Baby Boomer, the time to start building wealth is now.

But for your income and skills to translate into wealth, you need tools. You need concepts like…

◼ The Power of Compound Interest

◼ The Time Value of Money

◼ Wealth Equivalency

These concepts will help you answer questions like…

◼ What interest rate do I need to close the gap between my savings and my retirement goals?

◼ How much do I need to save each month to retire with $1 million?

◼ Should you save a nest egg or start a business?

If those are answers you need to get, ask me how you can learn. I’d be happy to introduce you to resources that can set you on the right path towards discovering how money works and building wealth.

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