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.

• Share:

Can everyone agree that 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.

It goes to your credit card company.

To your bank.

To Apple, Amazon, and Netflix.

You know—the guys who know exactly how money works.

And here’s something else they know—the moment you also learn how money works, their power evaporates.

Why? Because you’ll suddenly start seeing all the ways your money can work to make YOU wealthy, instead of someone else.

You start recognizing—and avoiding—the raw deals that banks keep throwing your way.

And you’ll finally stop wasting time feeling like a fool—and start living your life and providing your best to the people you love most.

It’s really simple. The only antidote to the pain of not knowing how money works is to actually learn how money works.

Get a financial education, and watch the amount of suck slowly drain from your life. I’ll be right here the moment you’ve had enough.

• Share:

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.

• Share:

Let’s get right to it. Here’s question one: Are you building wealth?

If you answered, ‘yes,’ good for you! Now, let’s get a little more specific… Are you building enough wealth to afford the lifestyle and independence you want until the end of your life?

If you’re like many Americans, you can’t answer that question for two reasons. First, you haven’t calculated how much wealth you’ll need. And second, you don’t know if you’re saving enough now. Have you run the numbers on your 401(k)? You might be shocked at how fast it might run out in retirement. What about Social Security? Any clue how much that will add up to? If your future financial security hinges on these two income sources, you might freak when you realize how little you’ll have to live on each month.

61% of Americans across all ages fear running out of money in retirement.¹ And it’s no wonder! We’re living longer than ever, meaning we need enough savings and passive income to last what could be 20 years (or more).² Being able to jazzercise and waterski with the grandkids at 75 is great—unless you’re broke.

Rather than thinking like a sucker and assuming you’ll somehow have enough for the future, it’s time to start thinking like the wealthy. They don’t put their heads in the sand and “hope it all works out”. Money—to them—isn’t anything to be ignored. They learn everything they can about how it works and start developing strategies to make it last. To the wealthy, money is not boring, mysterious, scary, or frustrating. They consider the lifestyle they want and then backwards engineer how to get there, by making money work for them.

To the wealthy, money equals possibilities, goals, gifts, and solutions to problems. Once they have the knowledge, they do everything they can to take control of their future. Money becomes wealth.

But if you don’t know how money works, your money can also become… someone else’s wealth.

Here’s question number two: How do you think about money? Do you think about money like a sucker? Or like the wealthy? It’s not a criticism. It’s a choice.

If money still seems mysterious, confusing or intimidating to you, take these two steps immediately…

Read the book, “HowMoneyWorks, Stop Being a Sucker.” (You can contact me to get a copy.) Then, sit down with a financial professional and find the answer to question one, “are you building enough wealth to afford the lifestyle and independence you want until the end of your life?”

• Share:

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!

• Share:

If you feel like your finances are teetering on the edge of disaster, there’s a likely culprit—financial illiteracy.

Do you agree or disagree with these statements?

1. I am one recession away from financial disaster. 2. It wouldn’t take much to derail my retirement strategy. 3. There’s a fine line between grand financial finale and grand financial failure.

The statements are adapted from research designed to test relationship security. They aren’t dependent on your income or savings level. Instead, they measure something far more relevant—how you feel about your finances.

And if you’re like many, you agree with most, if not all of those statements. It’s an indication that you feel financially insecure. And there’s a reason for that…

It’s because your finances are in grave danger.

It’s not your fault—nobody taught you how to create financial security. In fact, you may not have learned the basic building blocks of growing wealth, much less how to protect against losses, inflation, or tragedy.

So is it any surprise that your finances feel like a house of cards? And since you’re an intelligent, normal human, you can feel the looming threat of collapse. It weighs on you, makes you anxious.

And it should—your feelings are a blaring alarm announcing that your situation is precarious, and you need to act.

But you can’t respond to danger until you identify what’s wrong. And the greatest enemy of your financial security? Financial illiteracy.

Think about it—would your finances have reached this point if you knew how money worked? Of course not!

If you knew how to actually build wealth and avoid financial blunders, you likely would have chosen a completely different path.

So the antidote to your feelings of financial insecurity is simple—learn how money works. Then, apply your knowledge. You may be surprised by the new sense of security that appears in your life.

• Share:

Why are so many people so bad with money, even though they know it’s important?

There’s an article from Psychology Today titled “The Psychology of Money.” It was published in 1995, but the central question still rings true—why do people sacrifice so much for money, only to blow it all?

Michael Ventura, the author, asks the question in the context of Las Vegas, where hard earned money goes to die. He paints a vivid picture of brightly lit casinos packed with overweight middle-aged men in casual clothes hunched over blackjack tables and slot machines.

Not one of them looks happy.

They likely don’t talk much with their spouses.

They spend a few minutes each week in conversation with their kids.

All they do is work. Their income and financial resources define their social status.

And yet here they are, gambling it all away and hating every second of it.

And again, it begs the question of WHY? Why the insane urge to unravel everything they’ve worked so hard to create?

Here’s a thought—what they’re doing at the casino isn’t too far off from what the sucker does every day. They throw away money in hopes of a rush, and wait to see how the cards fall.

Think about it—they work and work and work for money, but for what? So they can buy a house, a car, and maybe take a nice vacation. Maybe they think it will make them happy. But what does that really get them? A bigger mortgage, higher monthly payments, and the constant worry about losing their job and being unable to make ends meet. They don’t know how to use their money to build wealth or a stable, happier life. How could they?

They’ve never been taught.

The casinos of Vegas call their patrons suckers. Banks give you a sucker on the way out the door. They both leverage the same Sucker Cycle, the same psychology.

So what’s the lesson from Las Vegas? That everyone’s a sucker? That you’ll never be good with money?

No.

The lesson is that you must learn how money works. You must realize that something better is possible with your money. With your life. That you actually have what it takes to make decisions. To write a story with a better ending than hunching over a slot machine with a blank expression on your face.

• Share:

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.

• Share:

Millennials, this one’s for you—a low interest rate DOES NOT balance out a high home price.

Millennials face a dilemma—pay greater home prices now but at lower interest, or hope that interest rates increase in the future which historically has lowered home prices.

Some Millennials are choosing to face the housing market head on, while others are waiting things out.

So which camp is “right”? And, if you’re a Millennial, which camp should you join?

The answer: None of the above. The real question is—and has always been—can you actually afford to own a home?

Let’s do the math…

Suppose you live in a fantasy where the housing market is semi-normal somewhere in the world. You have two potential homes in the running—one in the suburbs, the other in the city.

The suburban home costs $300,000 with a 30-year mortgage at a rate of 6%.

The city home costs $500,000 with a 30-year mortgage at a rate of 2%.

One Sucker sees a lower interest rate and ignores the price tag, while another Sucker sees the lower price tag and ignores the higher interest rate. Both think they’re getting an historic deal.

But get this—the monthly payment will be almost identical for either house.

The wealthy realize that high prices and high interest rates have the same result—you pay more for your home, and the bank profits.

Instead, the wealthy ask themselves questions like…

Can I afford my monthly payment?

Have I saved enough for an adequate down payment?

Will I have enough left for furniture and repairs?

Have I factored in the cost of property taxes and HOA fees?

The takeaway? The wealthy don’t lose sight of what matters most—their cash flow. Just because interest rates are lower doesn’t mean you’ll be able to make the monthly payments.

Do your homework.

Use a mortgage calculator.

Research your potential new neighborhood for any HOA fees or other costs you might incur.

Figure out how much you can afford to spend on monthly payments as a part of your overall budget.

Meet with your licensed and qualified financial professional to talk about your overall financial picture and how your new home will fit in with your current situation and your retirement strategy.

It’ll save you heartache—and maybe some money—in the long run.

• Share:

Automation is the simplest—and perhaps the most powerful—move you can make towards retiring wealthy.

Imagine if you could automate going to the gym. You download an app, tap a few buttons, and then… do nothing. Over the next few weeks, you notice changes. Your legs get firmer. Your biceps bulk up. You walk past mirrors and think “darn, I look GOOD!” Friends ask if you’ve been going to the gym. You smile, because you know the truth—you haven’t been once.

It sounds too good to be true. But when it comes to building wealth, “bulking up” can become a reality.

That’s right—you can automate building wealth. And it only takes a few moments.

Simply Google search how to automate deposits in your wealth building accounts, and follow the steps. It should take you less than a minute once you know how it’s done.

And just like that, you’ve started building wealth. Your money will effortlessly flow from your bank account into your wealth building accounts. It’s that easy.

Here are a few prerequisites before you start automating…

Decide which accounts are best for your situation

This isn’t something to do alone. Meet with your licensed and qualified financial professional, and review your situation and your goals. They’ll be able to recommend accounts and wealth-building vehicles.

Review your budget

What’s the most you can automate towards building wealth without derailing your lifestyle? See how much money you have leftover each month. If the answer is zero, slash your spending and automate whatever you free up.

Know when you get paid

The best time to transfer money from your bank to wealth building is right after payday. Review your pay schedule, then automate transfers to go through a day or two after.

Wealth doesn’t appear overnight. It can take years. But there are simple steps you can start this afternoon to make the process that much easier. It just takes a little knowledge and a few seconds. So get started today!

• Share:

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

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

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

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

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

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

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

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

• Share:

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.

• Share:

Budgeting is good, budgeting is great. But if you’re building wealth, it will only get you part of the way.

Budgeting is usually the first move for anyone getting their finances in order. It’s basically just tracking your expenses against your income, and then slashing spending.

Consider that 64% of Americans live paycheck-to-paycheck.¹ Low income isn’t to blame—48% of families earning over $100,000 also live paycheck-to-paycheck!² So for many, budgeting is an absolute necessity.

But will budgeting alone put you on the fast-track to wealth? Probably not.

Let’s say you earn $45,000 per year (after taxes), but you spend $45,000 every year. Congratulations! You’re living paycheck-to-paycheck. When you decide to get serious about building wealth, you’ll face a stark reality—you have no money left over to save!

So you start budgeting. You move from your apartment in midtown to a hovel in the suburbs. You stop going out. You cook at home. You walk to work. You swap lightbulbs for candles. You scrap Netflix, Spotify, and cable—and you start whittling random sticks you find in the yard to pass the time.

By the end of the year, you’ve spent only $30,000. Good for you! You have $15,000 to devote towards building wealth.

But what if you’re still short of your savings goals? You’ve cut spending to the core. Unless you’re willing to scavenge for food and live in a tent, cutting your spending further is going to be tough.

You only have one option—boost your income.

What does that look like? It could look like scoring a promotion. Or getting a new job. It could also look like starting a side hustle or becoming a part-time entrepreneur. You actually may be surprised at how many of your talents and hobbies have income-boosting potential!

That’s why for the 7 Money Milestones in the book How Money Works: Stop Being a Sucker, budgeting and boosting income are rolled together into a single Milestone—Milestone 5: Increase Cash Flow. Budgeting will get you started, but to truly supercharge your savings, you’ll need to increase your income stream, or create a multiple income streams.

Think about it like this—Jeff Bezos drove a Honda Accord for decades, but that’s not what made him a billionaire. Rather, he began with frugality and then built an income-generating empire.

So if you’re just beginning to build wealth, start with budgeting. Clean up your spending as much as possible before boosting your paycheck.

If you’re already frugal, good for you! You’ve made a great stride towards building wealth. Now, it’s time to consider boosting your income further.

• Share:

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.

• Share:

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.

• Share:

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

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

72 ÷ interest rate = years to double

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

Here’s how…

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

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

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

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

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

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

72 ÷ .5 = 144 years to double…

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

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

72 ÷ 3.25 = 22 years

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

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

72 ÷ 6 = 12 years

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

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

• Share:

Your emergency fund may be rapidly losing value.

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

Here’s what’s happening…

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

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

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

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

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

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

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

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

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

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

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

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

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

Some options are…

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

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

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

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

• Share:

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.

• Share:

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

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

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

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

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

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

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

• Over $1 trillion in student loan debt shackling Americans⁵

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

These numbers tell a story.

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

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

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

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

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

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

• Share:

As of August 2021, Americans had lost almost $30 billion to scam calls alone.¹ That’s up 200% from 2019.

The reason for the surge is simple—scammers are ruthlessly exploiting COVID-19 anxieties to steal your money.

You get a call. Caller ID confirms it’s a ‘legit’ organization. You answer. It’s a ‘charity’ raising money for the children of COVID-19 victims. For just $500, they’ll enter you into a raffle for an expenses paid outdoor adventure!

You’re a kind, empathetic person. What’s $500, after all? So you send them the wire transfer they very specifically requested.

And then… nothing. There was no raffle. There wasn’t even a charity. Just an old-fashioned huckster cashing in on a crisis, your ignorance, and your good nature.

But that doesn’t have to be you.

With the right knowledge, you can recognize scams from a mile away. You just have to know what to look for… and how to respond.

Here’s your complete guide to thwarting scam artists, fraudsters, charlatans, and hucksters!

Don’t trust, always verify. Is someone asking you for money? Do your homework first. It doesn’t matter how legitimate they seem.

If a phone number you don’t know calls you asking for money or information, Google search the number.

If an old friend DMs you asking for money, shoot them a call to check in.

If the prince of Zimbabwe emails you asking for $10,000, delete the email.

These simple steps can reveal to you the true identities of whoever is contacting you. It might be a legitimate business or a friend… or a scammer. Either way, do your research before you commit to helping anyone financially.

Watch for emotional manipulation. Scammers are masters of playing to your hopes and fears. They’ll dangle promises of wealth and opportunity in front of you in exchange for your information. They’ll also threaten you with utter disaster if you don’t give them what they want.

Legitimate businesses and organizations will rarely resort to these cheap tricks.

The state will not inform you that you won the powerball out of the blue.

The IRS will not threaten you with jail time over the phone.

If it seems too good—or too bad—to be true, it most likely is.

Never give information to unsolicited callers. If a cold caller starts asking for your debit card pin, your bank account information, or your social security number, say no.

Tell them you need more time to think things through.

Ask to meet in person.

If all else fails, hang up the phone.

Remember, your right to say no is your greatest line of defense. Exercise it with confidence. If someone asks for your information and you feel even a twinge of doubt, say no and don’t back down.

So the next time you get a suspicious DM or call, you know exactly what to do…

Verify their identity. Watch for emotional manipulation. Never give out your information.

Look at you! You’ve taken a step from being a sucker to being assertive. You’re not a victim anymore. You’re ready to build wealth without fear of scammers stealing what’s rightfully yours.

BONUS TIP: Credit cards offer top level fraud protection. If anyone asks for a wire transfer, sends you a check to sign, or wants cash, be on your guard!

• Share: