by Elisabeth Donati | Sep 21, 2011 | Financial Literacy, Latest News, Uncategorized
We frequently get questions from our websites from visitors. Here are a few I answered in very unconventional ways. Here is his email to me…
Burning Financial Questions
My single biggest question(s) when it comes to creating financial freedom for myself or teaching my kids about money is(are)…
1. What world currency is the most stable/reliable jurisdiction to sustain cash reserves?
2. What is your “take” (position) on the rates of inflation and currency value of US Dollars?
3. What criteria do you recommend for putting cash “to work”?
4. Does your curriculum address issues of: a. personal productivity, b. use of time, c. assets” [tangible (liquid/semi-liquid)] and[ intangible (example: education), d. Lifestyle choices that address consumption, saving, investment, giving.
5. What is your definition of “Financial Freedom
James
My answers to him…
Hi James,
Thanks for the questions though I don’t think I’m going to be all that helpful.
1. I have no idea…to me, the best currency is one’s talent and creativity. That way you see opportunities everywhere to create cash whenever you need it, regardless of what currency you use to buy groceries.
2. I don’t pay attention to stuff like this. It has never mattered to me. As I mentioned in #1, as long as I can always make way more money than I need (I didn’t say ‘earn’, I said ‘make’), inflation and the currency value of US dollars doesn’t affect me.
3. The only way you can put cash to work is to put in into an asset that will produce cash flow somehow. Real estate that produces positive cash flow (rents), stocks that produce dividends and you can sell covered calls on, creating businesses that produce regular profits without you having to do most of the work.
4. Our curriculum addresses: yes, yes, yes, yes.
5. My definition of financial freedom is simple: when I have more than enough money coming into my life than going out and able to do whatever I please, I am financially free. That being said, not making the money in your life mean anything about who you are as a human being is a secondary, and critical aspect of, the first part of the definition because without the second part, you’ll never really experience the joys of the first part.
Thanks again…E
by Elisabeth Donati | Aug 25, 2011 | Financial Literacy, Latest News, Uncategorized
Up until now, the majority of children in this country, and perhaps the world, have been raised with the belief that the way they will be financially successful in life is by getting a good education which will then (hopefully) lead to getting a good job where they can then save and invest enough of their money over many, many years to eventually be able to do this thing called retire.
We’ve all heard this scenario…uttered by our own parents or someone else, and chances are, if you have children, you’ve even uttered it yourself once or twice.
The problem with this particular life course is that it continues to create a society of ‘dependent’ human beings rather than one run by ‘independent’ human beings. And that dependency, on others, for their well-being, causes all sorts of emotional, financial, cultural and political issues…many that will take a long time to untangle…and that’s only if we have shifted our beliefs about life, work, money and retirement today.
Financial Freedom is the Ultimate Freedom
Some might argue that the ability to think one’s own thoughts is the ultimate freedom but, as long as life takes money, I disagree. You see, I’ve done a goodly amount of financial education coaching over the past nine years and I haven’t found a single person under financial stress who has control of his or her own thoughts or feels free enough to think whatever he or she wants to think.
Yes, technically no one is ‘controlling’ their thoughts, but because they were raised in our current “gotta get a job” mentality, their thoughts are controlled by the feelings of shame, inadequacy and dependency they feel on others…on a system that has fallen extremely short in terms of empowering them to be all that they can be.
Slavery is all but abolished in the United States
According to Wikipedia, slavery is described as a system under which people are treated as property and forced to work. I submit that ‘financial slavery’ comes in at least two packages:
- Where the person who has dominion over ‘the slave’ (or employee) is the one in control, and,
- Where the person in the ‘slave position’ feels out of control. In other words, the person feels like property in their own mind. They feel as if they have no control and are forced to work for the person because no one taught them there was any other choice.
Both instances connote a sense of dependency in as much as the slave, though he doesn’t feel like he has any control over his days, becomes dependent on the ‘owner’ for his well-being. In the case of the employer-employee relationship, he feels a slave…he must work for the money that he needs to take care of himself and his family.
Another concept of financial slavery comes in terms of debt. When we use other people’s money and must pay that money back, with or without interest, we then become a slave to that debt. This creates an even greater sense of dependency on the source of income because the pressure to pay back the debt increases as the debt increases, both in terms of how much interest is being paid (money being wasted that could be used to make us money instead) and the constant need to ‘service’ this debt.
In the United States, debt slavery has become a tradition…but not a good one. The sickest part about this debt slavery is that it begins at the top with our government. Talk about setting the worst example possible!
Financial Freedom – What it isn’t
In order to understand what Financial Freedom IS, it’s helpful to understand what it ISN’T.
It isn’t getting up every day to a job that you don’t like at all (there are almost always aspects of what we do for a living that we don’t really care for but that’s not the same as not liking what you do at all).
It isn’t worrying every day that you may lose your job for one reason or another.
It isn’t spending your day with someone who doesn’t have your best interest at heart peering over your shoulder waiting to catch you doing something wrong.
It isn’t getting you a paycheck and realizing the government took a huge chuck out of your hard-earned salary.
It isn’t wishing the government would do something about the cost of things.
It isn’t wishing the government would provide you more services (free stuff) simply because you haven’t figured out how to make enough money to pay for everything you need and want in life.
And lastly, it isn’t about feeling dependent on anyone else for your well-being: physical, mental, emotional or financial.
Financial Freedom – What it is
Financial freedom is knowing that you can, and do, create your own life, and that it can look like anything you want it to look like.
Financial freedom is knowing that you have the power to make as little or as much money as you want and need.
Financial freedom is believing beyond measure that we live in an abundant universe and as long as you’re tapped into that abundance, you have what you need…more than what you need usually!
Financial freedom is having more money coming INTO your life than going OUT in expenses.
Financial freedom is loving the bills that come in the mail because they mean your life is rich with experiences and you have the money flowing to you to easily pay for those experiences.
Financial freedom is going to bed each night knowing the money is simply a great tool to create whatever you want for yourself and those around you.
And lastly, financial freedom, provides the biggest sense of relief and security most human beings ever experience because finally they can work because they want to, and not because they have to.
Just something else to think about…
by Elisabeth Donati | Aug 11, 2011 | Financial Literacy, Latest News, Uncategorized
Every Camp Millionaire we hold has the same group of kids in it. We have marveled about this for years. We chuckle about it during and after camp as we notice how, over and over again, the same personalities show up.
Since we just had one of our weekend Camp Millionaire programs two weeks ago, the kids and their parents are fresh in my mind, and heart, and I just thought you might get a kick out of it. We’re constantly reminded how easily stereotypes are set up in each of our brains and how important it is to let each child stand on his or her own.
The Usual Camp Millionaire Characters
We have the adorable little ten-year old girls whose role it is to be cuter than any instructor can resist. These young ladies make us smile from deep within, say the darnedest things and often surprise us at how amazingly smart they already are. We had at least three of these girls in the last camp and they were charming as usual.
Then we have the one young man, usually another ten-year old, with the most gorgeous eye lashes! OMG, there is one in every camp. You can’t help but imagine the girls flocking over him as he turns sixteen. And not only that, he’s smart, gracious, full of manners and just pure delight.
The Money Cow Game
Now comes the young man who has more potential in his little fingers than most of us have in our whole bodies…but he hasn’t learned how to focus or control that energy yet. He’s what we usually call the natural-born leader.
When put into a group competition or challenge, he steps to the plate immediately and leads the group to victory, or in the last camp’s case, second place:-). The point is, he’s a leader through and through and we know with the right direction, mentoring and education, he will grow up and make a huge difference in the world for all of us.
Then there are the 13 and 14 year-olds who desperately want to be older, but aren’t. We find them having a great time despite their attitudes when they come into camp. Since we have ages 10-14 in most of our two-day programs, there are always a couple of tall 14 year-olds who feel awkward until they start having fun and realize it’s not such a bad thing to be there at all.
Then there are the 13 and 14 year-olds who thoroughly enjoy themselves but talk their parents into letting them skip Day Two. This breaks our hearts and happens every time.
As you can guess, going to a ‘money camp’ isn’t most kids’ idea of a good way to spend the weekend…until they actually attend, of course. When kids decide they’d rather do something else the next day, many parents give in…too easily. The problem is that their parents 1) don’t realize they actually did have a great time that first day and are manipulating them, and 2) don’t realize that by skipping out on Day Two, the kids miss the most critical financial principles and habits we teach. Principles and habits their children won’t learn in school and rarely learn at home.
There are a lot of other learning opportunities these kids miss out on as well…like looking for value in everything they do, seeing something through to the end and, one of the biggies to me personally, is learning that parents often know when something is ‘best’ for their children even if means that their child might not be ‘happy’ with the decision. (We have seen so many parents who allow their kids to dictate what is best.)
In this past camp, we had two young teens who were too old for the camp but whose families wanted them to attend to get the information. We let those two kids come as ‘counselors in training’ and we gave them the responsibility of being leaders in our ‘cabins’ (the groups we put kids into during the program).
Both teens decided together not to return for Day Two even though they had given their word to our Head Volunteer at the end of Day One. Not only did we have to completely reconfigure the cabin structure and break up the kids who had already formed a connection, but the next morning, but their parents couldn’t fathom that there was an impact. They couldn’t hear that their kids had let their groups down, impacted the camp dynamic, and were out of integrity with our staff. What feels most pathetic to me is that the kids didn’t get a valuable lesson in making commitments and keeping agreements or, at least, taking responsibility for not keeping their word. (For many of you, you already know that wussie parents are a pet peeve of mine because, well, you know, because wussie parents create more wussie young adults and we need strength and integrity to turn this country around!)
OK, I got that out. Thanks for letting me vent! Let’s move on to the rest of the characters who show up. Finally, you have the rest of the kids…common, every day great kids…funny, playful, mature, immature, secure, insecure, class clown, quiet but taking it all in, 10 going on 30, and, oh yeah, the one who doesn’t want to be there so badly, he (it’s always a he) will do anything to get out of there.
But we don’t let him. We continually enroll him in what’s in it for him and eventually we notice he’s smiling and learning and, by the end of the camp, you’d never know he had been so resistant to coming! This is usually the kid we’re most proud of because he’s the one who could have so easily gotten lost in the shuffle.
Camp Millionaire July 2011
So there you have it. Camp Millionaire in a nutshell. Take all these characters, add The Money Game, tons of activities, some contests, lots of moola and music, snacks and laughter and what do you end up with?
Kids who – if they remember even a smidgen of the information and actually use it in their lives – will grow into financially savvy adults!
But what really makes our hearts sing is when those kids come back the second, third and in Richard’s case, a fourth time. This is when we start seeing the information stick and when we know that ‘this one’s going to make it.”
by Elisabeth Donati | Jul 14, 2011 | Financial Literacy, Latest News, Uncategorized, WEALTHwork™
So there we are, Jan and I this morning, picking beans in my garden. I planted three types: green, yellow and purple. Before you get all excited about the purple ones you need to know they turn green when you cook them. Imagine my disappointment because I love purple.
I had grabbed a metal bowl to put them in and we started picking. And we picked and we picked and we picked. Now mind you, the patch isn’t very big…it’s only about five feet of beans.
Where are all of YOUR beans?
Nonetheless, the longer we picked and the closer we looked, the more beans we saw, and got to pick. (Note: cooked beans are my favorite vegetable.) We just kept commenting on how many there were as compared to how many we thought were there before we starting harvesting them.
We got to thinking how this is a lot like life. The longer, and deeper, we look, listen, feel and experience anything, the more we see, hear, feel or experience that thing.
Of course, the next step is to tie the metaphor into our financial situations…mine, Jan’s, yours. What can we say…it applies, of course.
Counting Your Own Beans
We’ve all heard the nickname bean counters for accountants, bookkeepers, CPA’s. Feel free to tootle over to http://www.word-detective.com/081100.html to check out the brief history of the phrase.
But getting back to your own beans, I have found in my many years of working with people and their money, that they often just need a nudge to stop and look at their situations a little deeper.
How much does it ACTUALLY cost for you to live the lifestyle you’re living?
How much does it ACTUALLY cost to feed your family of four each month?
How much are you ACTUALLY spending on coffee each month?
How much COULD YOU save and invest if you just stopped long enough to get a seriously accurate picture of what you’re making, what you’re spending, what you could save and invest, etc.
Counting Opportunities
The other area I’ve noticed people trip themselves up in is the idea that their opportunities are limited…especially in this economy. Our culture is so stuck on the ‘job’ thing that they often can’t see the 1000’s of opportunities in front of them to start profitable businesses. And no, not knowing how to start a business is not a good enough excuse to keep yourself in the job mentality.
So if you’re struggling financially, even in the slightest, start looking around at all the opportunities there really are for you to make money (not earn it, i.e., trading your time and energy for someone else’s money) on your own.
OK, you’ve got some picking to do. Stop, look, look deeper and then be honest with yourself about what you need to do to make some changes in the way you do money if indeed you really want something better for yourself, like eventually being financially free!
Just something else to think about…
by Elisabeth Donati | Jun 30, 2011 | Financial Literacy, Latest News, Uncategorized
Status quo. The idea that “this is just the way things are” has never sat well with me. Not when I was passionate about health, fitness and nutrition (still am…just don’t do it for a living anymore) and certainly not while I’ve been passionate about teaching people about money.
One of the philosophies I passionately instill in the teens who attend our programs is the necessity to “question everything.”
From the time our children enter school to the time they leave, they are, for the most part, filled with facts, statistics, dates, names, places, etc. They are forced to learn these things so that they can regurgitate the ANSWERS on a test after which, they are then graded as if their ability to know those particular answers prepares them for life.
You see, I don’t believe our traditional schools are working. I know I’m not alone in this belief and this is just one of the many reasons why I don’t believe they are working.
Here are some questions for you to illustrate my point.
Has the date Christopher Columbus set foot in America ever come up when you were buying a piece of rental property as an asset?
Was the capital of Spain important when you were researching stocks or mutual funds?
When was the last time you used the War of 1812 to develop a marketing plan to launch a new website that would help you build financial freedom? (OK, so this may actually be relevant if the website is a history blog that sells DVDs of history lectures or something.)
Now don’t get me wrong. Knowing “stuff” is important. But why do we send our children to school in the first place? Because we’re supposed to? Because someone said we had to? Because it’s a law? WHY?
I want to say we send them to school to prepare them to live happy, successful lives. But the part of me that knows the origin of Kindergarten (look it up) has a hard time believing that. Especially with our current success rate of getting kids from Kindergarten to graduation in 18 years. Why 18 years? Who decided that was enough? Or is it too much? You can see how the question thing works!
From what I’ve gathered, the reason we send kids to school is to get them into college. Are you aware that this is the criteria most high schools use when evaluating their success? Not the kids’ success, the schools’!
I personally believe that schools really produce employees and soldiers, both of which we need, but at whose expense?
Next question for you – and I might add that when I ask a group of relatively intelligent adults this question, they are at a loss for answers – Where are our next leaders? And I mean leaders leaders we can look up to, believe, and follow! Leaders like JFK, Martin Luther King, Jr., Ghandi…those types of leaders.
Why ARE leaders leaders in the first place? Not because they know a bunch of irrelevant information. They are leaders because they QUESTION EVERYTHING and aren’t afraid to speak out to the world that there’s a different way, and perhaps a better way to do things.
I don’t begin to assume that we can change the course of our schools overnight, though I’ll suggest how we might in a later article (or you can email me now and ask), but we can begin to instill in our children, the desire to question everything, regardless of their ages.
Your next question: Why DON’T we want them to question everything? What would happen if they did?
I believe it’s the last question that might have fired up your brain. Oh no, we’ll have anarchy on our hands, no one would follow the rules (not a bad idea, really, because many of them need changing anyway), they wouldn’t do their homework. Maybe they’d learn something else that was more important; something they were actually interested in and that was relevant to their lives at the time.
Our kids must be empowered with the ability and desire to question what is happening to themselves, their communities and their world so these kids will grow up to be leaders that can, and will, make a difference in all areas of life – and the time to start growing them is now!
Just something to think about.
by Elisabeth Donati | Jun 16, 2011 | Financial Literacy, Uncategorized
It’s summer and your kids are out of school, foot loose and fancy free. If you have teens, they are probably busy spending money hand over fist (whatever that means) and hopefully, many of them are making some or all of the money they are spending. If they aren’t, and YOU are supplying the money they are spending…STOP!!!
Yes, you read that correctly. Stop giving them money to spend frivolously! Kids don’t learn how to create their own money when you’re always giving it to them to spend. I’m not referring to their regular allowance money, however, that you provide for them to buy the things you’ve made them responsible for buying at their age, which is the secret to The Ultimate Allowance.
One of the main points in my Ultimate Allowance Book is that it’s always far easier for kids to spend YOUR money than THEIR money so it’s imperative that you put them in charge of purchasing the things they need as early as possible.
Summer Fun
Since I explain exactly how to do this in my book, I move on to talk about what a perfect opportunity the summer provides for instilling a sense of financial responsibility and entrepreneurship in your kids.
Necessity is the Mother of Invention
We’ve all heard this saying, Necessity is the Mother of Invention. Well, if kids aren’t getting extra money for movies, day trips, smoothies, etc. from YOU, they are going to have to create it themselves, or borrow it from others (and if you see this happening, stop it immediately).
The challenge for you is this: if you’re working full time and your kids don’t have the guidance they need to create their own money and manage it well, well, it’s probably not going to happen.
Now there are always a handful of kids who, for whatever reason, get the business bug all by themselves. They see their parents making their own money and have been exposed to it since they were babies or they see a buddy making money on his own or something else spurs them into starting a little business.
Generally, however, they need coaching and guidance to reach this point. One great solution, if you can’t do it yourself, is to find a mentor for your son or daughter. If you can’t be the inspiration and coach, perhaps you have a friend, relative or neighbor who runs his own business who can. If your child is a hard worker, pays attention and is truly interested, business owners are often happy to take on a young intern to show him the ropes.
Kids, Summers and Saving Money
No doubt about it…summers take money. We all know that. Vacations, special events, time with friends, new movies (thanks to Hollywood), new video games, etc. The marketing firms of the world spend months in conference rooms around the globe figuring out how to get money out of your teen’s pocket in the summer.
The questions are:
1) Where is this money coming from?
2) Who’s in charge of managing it?
In terms of where the money is coming from, it’s important to remember what I said earlier, that it’s WAY easier for your kids to spend YOUR money than THEIRS. You know, without a shadow of a doubt, what your kids REALLY want when they are willing to use their own money.
The key is to help them start producing their own money as early as possible. And generally, you do this by encouraging them to start a little business providing a service or selling a product or getting a job (which is the last option since we’re trying to create kids who are independent, not dependent, for the rest of their lives).
The best way to encourage their little entrepreneurial spirits, is to start chatting with them every chance you get about what people are buying and what people are spending their money on…explore various services and products they could promote that would make them money.
Note: it’s not your job to judge what is a good idea or not, so do your best not to say, “That’s a stupid idea…it will never work.” Treat every idea as valid and then help and encourage your child to learn what a good business idea looks like. And remember, if you don’t know, get some help from a friend or neighbor.
In terms of who’s in charge of managing it? Well, that all depends on how old your child is and how what kind of relationship you have with him or her. I’ve always frowned on TELLING a child what he has to do with his money. It’s really critical that, when it comes to learning about money, you develop a trusting, open, inquisitive type relationship with your kids where they can explore the wonderful world of money, learn how to manage it well, begin exploring the how to invest it in assets (beginning with a simple savings account and moving into individual stocks, starting businesses, and maybe even eventually real estate when they’re a little older).
Let’s Talk About Money!
So DO you establish the kind of relationship with your kids where money is an open book? It’s simple. Just start talking to your kids about money with as little of your adult judgments and beliefs thrown in. And you’ll know when you’ve crossed the line when you start to get upset about something. Just back off, take a breath and continue talking without the judgment or belief controlling the conversation.
Don’t TELL your child; ask questions. Don’t lecture; tell stories and get their feedback. Don’t just SHOW your child what to do; let him EXPERIENCE what to do himself.
Set Some Summer Goals
Summer is like any other time in regard to making and managing money. Take time right now to start the conversation. Sit down, play Monopoly. Order and play The Money Game if you can get 6-10 kids (siblings, neighbors, cousins, etc.) together and you have the gumption to learn how to teach it (it’s instructor driven, not a board game) and let them learn experientially.
Let part of the conversation be about setting financial goals. Any type of goal is fine…just set some. Saving goals, purchasing goals, money for vacation spending goals, saving toward a new bike (or first car). Anything that gets them focused on NOT spending their hard earned money.
Avoiding Financial Sunburns
At the end of the summer, you and your children have either spent more than you made, come out even or made more than you spent. If you don’t aim for the latter, you’ll end up with one of the first two. So…just keep an eye on the goal and have a great time learning how to get there, together.
