I know, I know…it’s that time of year that we’ve all been convinced is the perfect time to change something about ourselves…
How we look
What we weigh
How we workout
What we eat
How we treat others
How we treat ourselves
How we save money
How we spend money
How we invest money
Though it’s a great idea to look at our lives and reflect upon what we might like to change in order to get a different result…health, beauty, love, happiness, security, wealth…simply making New Year’s Resolutions doesn’t help much.
New Year’s Resolutions are Short Lived
Making New Year’s Resolutions might help in the short term…a few days, weeks or months…but the only thing that really helps you change something fundamental about your being is discovering and implementing the most amazing WHY for the change that you think you want.
Notice that I said, “think you want.” And it means just what it says. Often we think we want something when in reality, we really don’t want it. We either think we ‘should’ want it or someone else says we should want it when in reality, we really don’t care one way or the other.
I heard it said once that if you really want to know what you’re committed to, look at your life. We do, and don’t do, the things we’re committed to. So believe it or not…
If you’re poor, you’re committed to that.
If you’re unhealthy and fat, you’re committed to that.
If you’re unhappy, miserable and depressed, yes, you’re committed to that.
For whatever reason, being poor, unhealthy, fat, unhappy, miserable or depressed provides something for you that you need or want for yourself. In other words, it’s serving some purpose.
Quite often we choose to stay the same so we can blame someone or something else for our current and past life situations.
The fact is, however, that until you GET that you’re making the choices that bring you closer to, or further away, your goals, you will never have and experience what you say you want to experience.
So, all this being said, you can now see why all of the New Year’s Resolutions in the world can’t help you achieve your goals. Instead, use the five steps below to strive toward, and reach, your goals.
5 Steps to Achieving Your Goals
1) Sit down and decide what you want. I know it sounds silly but sometimes we just don’t know what we want. It’s often that I ask myself what I really want and I don’t get an answer. Then out of the blue, something will come up for me and I’ll say out loud, “I want that!”
2) Write it down and draw a picture of it. Somehow putting whatever it is that you want in some tangible form helps the laws of the Universe bring you closer to it.
3) Write down the steps it will take to create that thing or situation for you. Write down as many of the small steps as you can think of and constantly revisit this list. What you’ll find is that the more defined and thought out the list is, the easier it is for you to take the baby steps you need to take to reach the goal.
4) Take those baby steps. Even if you just take one baby step per day, you’ll eventually reach your goal. You can’t help it…it will happen before you know it. One baby step…we can all do this!
5) Enjoy the process. If you don’t enjoy what you’re doing, it won’t last, you won’t take baby steps and you’ll never get what you say you really want for yourself…whatever it is.
BONUS STEP – Re-evalute #1 to make sure you really want what you say you want. If you’re finding it hard to write it down, come up with the steps or stick to the baby steps, you simply don’t want this thing badly enough. Stop wasting your precious time and energy and figure out what it is you really want.
OK, what are you waiting for? Start at #1 and then go enjoy The New Year without all the guilt!
Plastic…it’s everywhere. We have come to accept its insidious use in our lives…but should we?
If you think I’m talking about plastic bags or plastic food containers or the plastic used in almost every toy known to man, think again.
Nope…I’m talking about plastic money!
If you listen to most financial experts they’ll tell you you must get a credit card to start building your credit. Why is that do you suppose?
So you can borrow money later! In other words, you can more easily use ‘other people’s money’.
Now there may be reasons to use other people’s money (OPM) in the future, but the fact that kids and adults are indoctrinated into this culture of using credit cards to pay for things from the time they go into college or leave home, tells you where our ‘money minds’ are.
We are focused on the wrong side of this transaction. Instead of thinking about, and preparing to, borrow other people’s money, we should be thinking about how we can ‘loan’ our time, energy and money out to others to create assets that then produce a cash flow for us. But more about this another time.
What I’m talking about in this short article is something much more dangerous and risky than other types of plastic. Read on…
Credit Cards and Technology
The newest technology known as RFID (radio frequency identification) isn’t nearly as cool as the credit card companies might have led you to believe. Watch this video to learn how YOU could be vulnerable and have your credit card information stolen from you without even taking your new card out of your wallet or purse. Kinda scary if you ask me!
OK, now that you know, go check your wallet to see if your cards are at risk. If they are, either cover them or call your bank to have new credit/debit cards issued with out this new technology.
Of all of the financial principles we teach in Camp Millionaire and The Money Game, this principle alone would have kept Americans from getting into debt they couldn’t get themselves out of.
Making Money Borrowing Money
If you don’t understand the world of money, then you can’t understand how your could actually make money by borrowing it.
Borrowing money in and of itself isn’t what makes you money. It’s what you DO with the money you borrow that makes you money.
Good Debt vs. Bad Debt
Think of it this way…when most people borrow money, what do they use it for?
Answer…buying liabilities. You know, those things that go DOWN in value. Things like:
Cars
Houses to live in (stay with me)
Phones
Boats
Clothes
Electronics
Garden tools
and everything else that goes down in value
If you borrow money to buy these things, YOU are then liable for paying back the money you borrowed, be it from a friend, a relative or your all too friendly credit card company. This is why we call them Liabilities.
What if, instead, you used the money you borrowed to buy something that went UP in value. Things like:
Real estate that brings you a positive monthly cash flow
Creating a profitable business
Inventing or creating a product you could sell for years to come and maybe for the rest of your life
We call these things Assets and sssets are things you buy that bring make you money on a regular basis.
Yes, stocks and bonds are also considered assets but you generally wouldn’t borrow money to invest in stocks or bonds because the risk is too high and/or the return probably won’t out perform the interest rate you’re paying on the money you borrowed, i.e., the loan.
The cool part about good debt is that ‘usually’ someone else is paying down the debt.
In the case of rental real estate, your tenants are paying your mortgage down.
In the case of a profitable business, your customers are paying down your business debt.
In the case of investing or creating a product or service, you can sell the entire thing to a business for a profit or turn it into a business yourself where again, your customers/clients are playing down the debt.
All of this is a very good thing when it comes to making money work for you.
And now you see, debt can be a good thing or a bad thing…it’s all in how you use it.
Good debt is debt you use to invest in assets
Bad debt is debt you use to spend on liabilities, aka piddlyjunk.
Only Borrow Money to Make You Money
So, next time you think about borrowing money to buy something, ask yourself this very important question:
Do I have to pay this debt down myself or will someone else be paying down this debt?
If it’s you doing the paying, you might want to think twice before borrowing the money.
It’s often that we think we just have to borrow money to buy a certain thing but in reality, we don’t have to borrow money to buy anything.
But What About a House to Live in or a Car to Drive
Well, what about them? Here’s the thing:
That house you live in that you borrowed money to buy? It’s not an asset in the sense that it doesn’t bring you money on a regular basis, unless you’re renting out enough rooms to more than cover your mortgage payment. It’s really the bank’s asset…it’s bringing the bank regular monthly income as long as you keep making your payments.
The car you borrowed money for? My guess is that you could have driven the car you had prior to this one for a few more years and saved up to buy a car that was adequate without buying a new one that required you to borrow money. It’s just a guess mind you but I’m often right.
If you want a new car, why not create an asset that generates the passive income you need to cover the car payment?
Again, just a thought and another way of looking at borrowing money.
There are, however, several challenges with financial education in schools:
Schools are gears toward getting students to be proficient in subjects they are tested in: math, reading, writing, science, etc., NOT subjects that are classified as electives.
The main reason schools are gears toward tests and these subjects is that they aren’t so much looking at what helps create a successful human being but are focused on getting a certain percentage of their students into college because most schools, like most adults, are brainwashed into believing that college is THE way to success rather than simply A way.
Schools also focus on the tested subjects because most of the time, schools funding is tied to how well their students do on those tests.
When a school or individual teacher makes a commitment to start teaching their students about money, the programs that are ‘affordable’ are only not the best financial education program available and you do get what you pay for.
Free financial education programs, most made available by financial institutions, are boring…they use boring workbooks, boring curriculums, aren’t taught in a relevant way (i.e., students have no connection with the material) and well, all in all, this makes the programs pretty ineffective. Here’s an interesting article from Kiplinger that reflects the point.
Let’s say that schools start really making a place for financial education in their classrooms…for whatever reason: legislation, demand by parents, demand by students, new goals by the administration…it’s going to take it all.
Teachers and administration will go out and start looking for the best financial program they can find.
And if cost is an issue, which it so often is, they end up searching for free…and this is what they get…a curriculum focused on a lot of the right things and one that is completely void of lessons that teach kids the real truth…what it takes to become financially free in this day and age.
This is what they’ll study, and generally be bored studying it:
Budgeting: The lesson is generally that you must spend less than you make and live within your means rather than simply planning your spending. There is a subtle message of ‘not enough’ when teaching budgeting. In Camp Millionaire and The Money Game we teach kids that ‘a budget is a tool to make their dreams come true’ rather than the idea that they always must be on a diet with their money.
Saving: The lessons usually revolve the idea that we have short term and long term goals though the long term goals are often college and buying a car. We teach kids that they have two Savings Jars; one for saving up to buy something (for cash…not borrowing to buy it) and one for what we call “just in cases.” Savings in Camp Millionaire isn’t tied to different types of goals but what you use the money for instead.
Credit Score: The lesson is that they WILL borrow money so they better make sure they have a great score when they go to buy it rather than teaching them that borrowing money isn’t mandatory in life. But you’d hardly know that with the way everything is offered credit from about every type of company imaginable these days. Let’s teach kids that they don’t have to ever borrow to buy something if they don’t want to (and then teach them how…I’ll get to that in a second).
Debt: The lesson is often to learn to use credit cards wisely rather than not using them at all. Some of the richest people in the world use debit cards because they don’t want to ever use other people’s money the wrong way. Then again, others use their credit cards to accumulate points to use for mileage, trips, bonus products and more. A better lesson is learning the difference between Good Debt (debt other people pay down…using from investing in assets) and Bad Debt (debt YOU pay down…usually from buying piddlyjunk, aka liabilities).
Miscellaneous lessons including insurance, buying cars, saving for college, borrowing money for college (yikes), retirement accounts like IRAs, and a few other things.
Financial Literacy – The Critical Piece That Gets Left Out
Let me ask you a question…
Why do you want your kids to learn about money in the first place?
So they’ll end up with plenty/lots of money when they’re older?
So they’ll be able to retire when they’re older?
So they’ll be able to provide for themselves and their families?
So they’ll never move home because they’re in debt up to their eyebrows?
All of the above?
Financial Literacy Education Must Teach Students How To Invest
It’s a rare financial literacy curriculum that teaches investing as one of the core principles…but without it, it’s like teaching kids how to brush their teeth but never showing them how to use the dental floss…or worse.
Investing is putting money (or time or resources) into something with the expectation of some type of gain from that.
Why is the idea of investing so critical? Because it’s darn near impossible for people to ‘save’ their way to retirement…that is IF you want to wait until you’re pretty old to retire.
The idea behind investing is learning to send your money to work in addition to, and then instead of, you!
Investing means you put money into real estate so you can live on the rental income, put money into the stock market so you can live dividends and interest and put money into business ventures (yours and other people’s) so you have profit cash flow from continued profits to live on.
Learning to invest wisely takes time. The challenge is that everyone on the planet has learned different things about investing…including developing different beliefs about different types of investing.
For example:
Some adults grew up with parents who invested in real estate and did well so that’s their focus.
Other adults grew up with parents who lost a ton of money in real estate and wouldn’t invest in it if it were the only way to make their money grow.
Some adults grew up with parents who taught them about the stock market and made great investments.
Others grew up with parents and/or grandparents who constantly said, “the stock market is too risky.”
Some adults grew up with parents who were entrepreneurs, experienced the freedom of being able to call their own shots and create their own lifestyles and wouldn’t dream of getting a job.
Others grew up with parents who always had jobs and talked perpetually about the securing of going to college and getting a good secure job. We all know where that has gotten our population.
What’s the point?
The point is that the world we live in has changed. Kids need to learn the difference between Earning money and Making money.
Getting a job isn’t easy and isn’t necessarily the most safe and secure thing to do.
Saving alone is almost never going to create financial freedom for anyone.
Financial Literacy Solution
If your kids are in a financial education course at school, make sure the curriculum includes investing. If it doesn’t, volunteer to teach the missing piece yourself. Don’t know how to teach it? Call me…I’ll show you how easy it is to teach kids the importance of investing for their financial futures.
Want to make sure your kids learn about money and investing in a fun and highly effective way?
Invest in their financial future…and the financial future of every one of their classmates…by giving their teacher The Money Game.
Even if you can’t afford to do this, let the teacher know they can apply for a Get One, Give One™ Grant to receive The Money Game for free.
Every so often, I get an email that warms my heart…financial literacy wise. It’s usually from one of our Camp Millionaire instructors or Money Game instructors around the globe and often it’s from a parent who is so happy their son or daughter learned about money in our camp program.
The following came as an email from our Money Game instructor in New Zealand. She’s been teaching The Money Game to school classrooms for a while now and is being sponsored by a great company in New Zealand called New Zealand Home Loans. Congrats to them for helping Anita make a huge difference in those student’s futures.
Here’s the email…
My 10 year old twin boys made their first ‘big’ purchase today and I just wanted to share it with you!
They have been receiving pocket money since they were 5. They get half their age, and it is always split 3 ways (Spend/share/save). So at 10 they get $2 to spend, $2.50 to save and .50c to ‘share’.
They used to have a ‘moonjar’ to divide these amounts but at 10 we decided they could get a ‘real’ bank account. Today they withdrew some money from their savings, and bought a digital camera each!! They have been watching prices for a while now and noticed the camera’s were on special. So as well reaching their goal, they have learnt delayed gratification AND managed to SAVE $67 at the same time! ($50 on the camera, and $17 on the case).
WE must be the proudest parents on the planet right now!
Anita Stokes
Hamilton, New Zealand
PS: NZ just had their first EVER Money Week last week!! Exciting huh?!
Anita…thanks so much for doing what you’re doing for those kids. Their lives will be different and better because of you. Keep up the great work with your children and your students.
