You know that saying many speakers use when they’re telling you about their success?
That phrase you’ve heard plenty of times but not realized what they are doing in psychological terms…aka Speaker Speak?
It’s the phrase, “But it wasn’t always this way.”
They use this phrase because they want you to know that YOU TOO can become ___________ (happy, wealthy, fit, successful), whatever it is that they are preaching and teaching. And we love that they figured it out because it gives us hope that WE can and will figure it out, too.
Well, I’m 53 and for the first time in my life, I’m not healthy.
Medicine Takes Money
BUT IT WASN’T ALWAYS THIS WAY!
But wait, isn’t it supposed to be the other way around? Aren’t I suppose to tell you how great I am now and how terrible I was at something before? Well, we’re going to go about things a little bass-ackwards today (one of mom’s favorite sayings again – thanks mom).
People generally don’t plan to be sick later in life
When we’re young and full of energy, we tend to think we are invincible, have the cat by its tail and nothing will ever bring us down. OTHER people get sick. OTHER people have accidents. OTHER people get cancer (don’t worry, I’m not THAT sick).
Not so. Some times those other people turn out to be YOU, even if you do everything you know to make sure you stay healthy.
The challenge, financially, is that if we aren’t planning for unexpected medical bills and challenges, we’re in a hurt of trouble well past being in the hurt we’re experiencing physically.
My personal journey as case in point
All my life, I have eaten not just well, but extremely well. I grew up on a farm and lived on home grown veggies, butter (yes, butter is good for you), fresh fruit, home-made breads, etc. Back then, the meats we ate didn’t have the hormones and other chemicals in them so we rarely got sick other than an occasional cold (and I seem to remember a few ear aches).
Then, when I was a teenager, I was a vegetarian for quite a while and nothing white (white flour, white sugar) crossed my lips. I ate tons of veggies, whole grains, beans, rice and even though I probably needed some good old fashioned meat, I still rarely got sick. I was strong, healthy and had more energy than anyone I knew.
When I went off to college, I ended up studying fitness and nutrition which ended up being my first love (probably still is) for decades. The only thing I didn’t do correctly was eat enough fat because back when I was learning all this nutrition stuff, fat was our enemy. Not so anymore…we now know how important good fats are and the truth is, sugar is our big enemy.
The point I want to make here is that I did everything I thought I could do to stay healthy so I could live into my older years with plenty of energy and the strength to do whatever it is I wanted with my life.
The best laid plans
A few years ago, I started going into that menopause thing that all of us older women go through, whether we want to or not. Without going into all of the details, I ended up using a very toxic hormone protocol (and yes, you can email me for the information) that has made me very sick.
What I’m doing now is spending a ton of money on experts to help me get well. My belief is that the body can heal itself if you provide it with the right tools and I have to say, those tools are costing me a fortune. Expert endocrinologist, vitamins, hormones (to fix the other hormone situation), herbalist, herbs, massage, hyperberic oxygen treatments and a whole lot more.
Never in my life did I imagine that 1) I would be so sick and 2) I’d need this much money to pay for this medical journey I’m on. The blessing is that I do have money put away to pay for these expenses and every day that I have to outlay more money for something else, I say a prayer that I don’t have to put these expenses on a credit card or worse, I don’t have any way of paying for the medical bills.
The study about women, money and early death
I read recently that women without money die sooner than women with money. The reason for this is simple…women with money use that money to pay for quality health care.
So here’s your action questions:
1) Do you have money put away earmarked for Medical Expenses? If yes, great. If no, START TODAY! And I seriously suggest you put it in a separate account named Medical Expense. If you’re doing The Money Jars, simply add one more jar to your Magically Money Management System.
2) Are you a women anywhere near menopause? If yes, please know this…menopause is a phase of life that you don’t go through, you go into and stay there.
It is the permanent loss of our sex hormone system and since all hormone systems depend on each other, it’s critical that you learn as early as possible, how to balance (not just replace) those hormones.
I am learning heaps about the endocrine system and how it affects all of the other systems and it’s as fascinating as financial education for kids. For those of you who are interested, I’m happy to share what I’m going through on a different blog:-).
3) Since #1 is so important, I’m simply going to implore you to plan ahead so that you have the money you may need to pay for your own health restoration. I promise you, from the bottom of where I can make promises, you will be super glad you did.
Note from Elisabeth: John is on the board of directors of Creative Wealth International and love The Money Game. Here’s a great article he wrote on playing The Money Game to win.
Winning YOUR Money Game
Right now, you are playing in the biggest, most important game of your life. How are you doing?That game is “The Money Game” and you’re in it because you are making financial choices each and every day. You can’t opt out of this game. You can’t sit on the bench or go back into the locker room. You’re out there on the Money Game field, playing with millions of other players (someone had to tell you).Since you’re in this game and you can’t opt out, it would seem like a good idea to know how to play the Money Game…and win.
THREE ELEMENTS
The Money Game (like all games) has three basic elements. The first one is Offense. In the Money Game, the offense includes income, savings and investment choices. When you do well on offense, you score points and improve your position. That’s how it works in the Money Game, too.
Then there’s the Defense – protecting what you already have. In the Money Game that can involve insurance, cash reserves or legal protections like an estate plan.
The third part of any game worth playing is Celebration. When you score a goal, you celebrate. When you hit a good shot, celebrate. When your defense makes a great stop, celebrate. In the Money Game, Celebration is using your money to pay for something…something that is (hopefully) enjoyable and worth celebrating.
BALANCE
One key to winning the money game is to have balance between all three aspects of the game. If your team has a great offense but no defense, you’ll be doomed to lose no matter how many times you score. If you’re out there on the field celebrating all the time but not paying attention to your offense or your defense – well, that won’t end up very well for you, either.
FOCUS
Once you have accepted that (a) you are in this Money Game and (b) you can’t opt out, it becomes obvious that some effort towards doing your best at each aspect of the game (offense, defense and celebration) is worth the time and energy you might spend on it.Not working to improve your skills in the Money Game would be like going out on the football field of an NFL game with little to no experience. You might have all the protective gear in the world, but you’ll still get beat up (example: watch the movie “Rudy”).
REASONS TO CELEBRATE
Remember that at least one aspect of the Money Game is a heck of a lot of fun. That element is “Celebration.” When you have a better offense, you score more points so you can celebrate more. When you have a great defense, your successes on offense will be more effective and long-lasting which will give you more to celebrate with as well.So use Celebration as the motive to keep working on improving your offense and defense.
YOUR CHOICE
Remember, whether you like it or not, you ARE a player in the Money Game. Unfortunately (for them), the attitude for many of your neighbors is to never try to improve. It’s too difficult/confusing/boring. They would rather focus on something else so they go out on the field – suited up but otherwise unprepared – and let life “hit them in the face” (like Rudy). They don’t work to improve their cash flow, income, savings or investments, nor do they pay attention to how well they are protected out there on the field. They just go out and hope they don’t get hit … and then wonder why they don’t have a lot to celebrate about later.
AGE SHIFTS
There is one other thing to keep in mind. When we are younger, we have more capacity for growth (offense). While celebration is fun and an important part of the game at any time, it is also important to save some of your energy for later in the game. As you get older, your capacity for growth gets smaller … but your total score (resources) gets larger (as long as your defense has done their job).The celebrations at the end of the game are often sweeter than those in the first few minutes.
About John Buerger
John Buerger is a Certified Financial Planner™ professional licensed with ALTUS Wealth Solutions, a registered investment advisor that provides personal financial advice online or in person for a fee. John is a Wealth Coach and online advice pioneer who help you make better money choices with your money. As a coach he’s give you the tools, strategy and framework you need to Get, Keep and Enjoy more of whatever is most important to you in life. AND he has a great newsletter of his own so if you enjoy Financial Wisdom with a TWI$T, go sign up for his information, too. You’ll love it!
Written by…Karyn Hodgens, author of Raised for Richness
(Note from Elisabeth: thought maybe you didn’t get enough of the gardening metaphor from last week’s Financial Gardening article!)
When my oldest son, Nathan, was four years old, I caught him crying silently in bed one night. I had gone back into his room to tuck him in as he liked to spend a few minutes “reading” to himself before saying goodnight. Seeing him crying concerned me.
“Nathan, what’s the matter?” I asked.
He lifted the book he had been reading and turned to the page where a cartoon representation of a slug was sitting behind a ticket booth. The sign read: Hugs and Kisses $1.0050¢25¢ 05¢. The book he was sharing with me was called The Unhuggables: the truth about snakes, skunks, spiders, and other animals that are hard to love.
“He looks so sad,” Nathan sniffed, pointing to the slug, who did, indeed, look pretty sad. “No-one wants to give him a hug.”
Not being a huge fan of slugs, myself, but relieved that this was what made him upset, I had to quickly figure out what purpose slugs served.
The Lovely Slug
“Oh, honey,” I stalled, “Slugs are misunderstood. They’re actually quite useful. They decompose a lot of dead leaves and that’s a very good thing because it puts nutrients back into the soil which helps flowers grow. But not many people know this otherwise I’m sure they would be giving him hugs and kisses.”
I actually impressed myself that this little bit of information about slugs surfaced in my brain. I guess I really was listening in biology class. And the good news is that hearing this seemed to satisfy Nathan.
“We should tell people that slugs are good,” he said.
“Yes, we should,” I agreed. Five minutes later, he was asleep.
Budgets are like slugs. They’re often misunderstood. And because of that, people find them unhuggable.
But budgets actually serve a very important function. Budgets help us get the things we want in life: a new car, a house, college education for our kids, more time with our family, the ability to travel to exotic places… Money is the tool that can help us achieve those desires. A budget helps us use that tool effectively.
So teaching our kids how to budget is important if we want them to achieve their goals in life. Kids budgeting? Of course! The good news is, teaching them is pretty simple. Here are three ways to give your kids hands-on experiences with budgeting (excerpted from the book Raised for Richness):
The Birthday Party – ages 7+
Decide how much you are willing to spend on your child’s birthday party. Get CASH in that amount (that’s your budget) and put it in an envelope labeled ‘(Sara’s) Birthday Party’. You’ll use the envelope to help you keep track of your running expenses.
Then have your child help you make a list of all the expenses related to the party. Making a list will help you stay focused when you’re shopping. And thinking of these in advance will teach your child to be organized. She’ll need to consider number of guests, party games, food, party favors, paper plates, etc.
Now the fun part…you get to go shopping. As you buy items, write the total on the envelope and keep a running balance. Using cash will underscore the value of a dollar (it makes a difference if you can SEE the money) and help you stick to the budget.
Tweens and teens can go a step further and come up with the “flow” of the party…when to play games, when to eat, etc.
Clothing Allowance: Tweens and Teenagers
This is a great back-to-school-shopping activity, but can still be used any time of the year. Tweens and teens are quite capable of shopping for themselves. They may make mistakes along the way, but those are great learning opportunities. So giving them a lump sum of money and putting them in charge of spending within the limits of a budget is good practice.
Just like the birthday party activity, begin by deciding how much you’re willing to spend on clothing. Consider how long you expect those clothes to last. In other words, are they shopping for all their fall/winter clothes? Then have your child make a list of needed items: 2 pair of jeans, three t-shirts, socks, warm jacket, etc.
Again, get CASH in the needed amount. Tell him that he needs to buy all the items on the list and any money left over is his to keep! This usually gets kids to think carefully about their purchases and look for good deals. Instant savvy shoppers!
The Cell Phone: Teenagers
Parents have been handed an unbelievable tool to help teach teens how to budget. It’s the cell phone. Yup, that object of love and hate. Done correctly, it becomes an object of learning. Here’s how.
Teens need to stay connected to their friends. This is normal as they figure out their place in the world. Cell phones keep them connected. Using their “need” for a cell phone as the motivator, we can teach them basic money management skills such as budgeting and paying bills.
First, teens need to know that along with a cell phone comes responsibility. Keeping track of your cell phone, resisting the urge to text during dinner, and paying your phone bill. Kids paying bills? You bet! And the best time to teach them is while they are still hanging out with you.
Next, it’s important to establish what part of the phone bill your child will be responsible for. For example, you may pay the family plan fee but maybe your teen pays the additional phone line fee, texting, and upgrades…
Now comes the fun part. Kids learn to budget their money in the context of something they love…their cell phone! Upgrades? They pay. Overages? They pay. Lost phone? They pay. Unpaid bill? No phone. See how simple it is? Okay, so it’s going to take a few months before everyone understands how the whole thing works, but when that happens, it’s a thing of beauty. Kids are happy; as long as they budget their money correctly, they stay connected to their friends. Parents are happy, their kids are learning real life skills. It’s a win/win.
Although a lot of parents are willing to pay for their kids’ cell phones because it offers peace of mind, how about the peace of mind that comes with knowing your child is ready to take on the financial challenges that await her out there? Don’t miss this silver platter opportunity. With teens, when you get the chance, take it!
I have the opportunity quite often to teach or talk to teens and one of the things I love talking to them about is the idea of designing their lives.
Now I know that sometimes things just happen that don’t seem to be part of our design at first, yet if you really look deeper at the things that happen in your life, you can see your part in it shining through.
But, somewhere, at some time, you made a decision that led to the event you didn’t mean to insert into “My Perfect Little Life” script.
To give you a few little tips on how to bring what IS happening back to the script you had in mind, I wanted to use a little gardening analogy I noticed recently.
Financial Gardening
In The Garden
So, as I’ve crafted my spring and summer garden areas in Santa Barbara in the small areas I have to work with, I recently noticed something different about my gardening approach.
The first thing I am doing differently is paying (interesting word:-) a lot more attention to the details of the garden. And I’m doing this with volition, in other words, I am consciously choosing to do it now.
In the past, I would plant things and then ‘pretend’ I was too busy to do what was really needed to maximize the return (interesting phrase) on what I planted. Not any more. I plant. I water. I check on the ‘kids’ each morning, noon and night and take the time purposefully to tend to their care (though I am still learning how to keep certain bugs off certain plants so THEY don’t enjoy my produce before I do!).
The second thing that I’ve noticed is my newly attained ability to THIN! I’ve always struggled with pulling out those cute little seedlings because, well, it just hurt to pull them out. It seemed that they worked so hard to get sprouted and then come up for me to enjoy. How could I pull half of them out and not feel their pain?
Yet what I know from growing up with huge gardens as a child is, that unless you constantly thin, the stronger seedlings don’t take root and grow to their full capacity, yielding (interesting word) ME much bigger, yummier lettuce, carrots or pak choi (like bok choi but different).
For whatever reason, it’s become easy for me to simply go out every morning, thin the ones that need thinning (and usually eating those little morsels) and then move on with my day.
Financial Thinning
So how does this idea of thinning seedlings in a garden relate to my talks with teens about designing lives and money? Simple.
When I look around at the most stressed people I know, they usually have chosen (planted) so many projects that they just can’t tend to them all well. They also can’t bear to thin any of them and that’s where the majority of the stress comes from.
Americans seem to suffer from the “Oh, no, I can’t stop doing THAT because THAT may be the one thing where I make it BIG.” Wrong! The thing that will make it through is the thing you tend to the most, with the greatest attention and care. The thing that you’ve put the most time into planning, researching and focusing on.
One of the beliefs at the core of our inability to say ‘no’ to more projects and ‘yes’ to the things we could possibly do well, let alone do great, is a belief that there is a scarcity of anything in life. We buy (mmhm, interesting word) into the idea that if WE don’t do it, someone else will (and they might) or if we don’t try all these things, we might miss the thing that will work (we won’t).
There isn’t a scarcity of opportunity in life…just a scarcity in the amount of focus time we invest (interesting word) in the project or couple of projects we decide to devote ourselves to.
We forget sometimes that we can’t do a great job on ALL of the projects that we want to choose and, if you’re like ME (a serial creative being), you can barely move through your day without coming up with at least one more great idea!
Tips to Thinning – Step One:
Make a list of all of your projects, all of your investments, all of your volunteer commitments, all of the things that demand your time that you don’t consider part of the life you want for yourself. (And it’s perfectly OK to learn to say NO to family members. Martyrdom is NEVER healthy!)
Tips to Thinning – Step Two:
Time to thin and this is how you do it. But first know that thinning can be emotionally painful at the beginning, but I give you my word, it gets easier – and sooner than you think, you’ll start looking forward to it and begin doing it on a regular basis.
Pull the projects/things/people/investments, etc. that are the weakest, poorest performers. The ones that appear to be crowding out others that you know are stronger.
Make sure you thin enough so that the things you leave in place are part of the life you want for yourself. Give them enough room to grow, flourish, evolve and do their thing.
Check yourself every time you notice you’re pulled by anything outside of yourself to say YES to one more thing that you didn’t choose.
Many people want to know what kids and teens learn in our Camp Millionaire summer or weekend workshops.
Financial Principles...not Principals!
To give you a basic overview of just some of what the kids learn, we’ve enclosed the basic Money Game Principles we cover in the weekend program. These are also the financial objectives of The Money Game. There are 26 principles in total that we include in our week long Camp Millionaire.
Note: We alternate between the words rich, wealth and financially free to help remove judgments that have already been ingrained in students by family, friends, teachers, media, etc.
1. Financial Freedom is Your Choice
Choice is a powerful tool and the first step in any achievement. We want kids to know that they must choose to grow up financially free before they will be motivated to take action to create this for themselves. In order to reach a goal, any goal, the goal must first be chosen
Participants learn that when people don’t get what they want it’s because they often don’t know what they want. They also learn that, when you don’t make a choice, you are actually choosing something else by “default”. Choosing financial freedom is the powerful first step that propels us on our way; it’s not a guarantee, but it launches the potential.
2. Creating Financial Freedom Is A Matter Of Developing The Right Habits
Habits are actions we do without having to think about what or why we’re doing them. Financial habits are established early on in life whether we want them or not. We acquire them through listening, watching, and experiencing how money works from our parents, other relatives, friends and the media.
Participants learn that they have two options: learn to be wealthy by doing what wealthy people do or learn to be poor by doing what poor people do. Many of our principles are habits in and of themselves; here are some others that are learned by playing The Money Game:
Pay yourself first. (This is one of our principles and always worth repeating!)
Develop a system for managing your money, i.e. The Money Jars.
Invest “Freedom Jar” money in assets that will eventually produce multiple streams of passive income to live on (i.e., put your money to work for you).
Never let your accounts get to $0.
Get the right kinds of insurance.
Pay off car loans and credit card bills before the interest accrues.
Continue to learn. (Financially savvy people get that way because they are constantly learning and staying on top of what’s happening with their money.)
Play! (Take time to experience and enjoy life with the money that you make.)
Donate, on a regular basis, your time, energy and money to those who need it.
3. Pay Yourself First
By far, the most important habit of all financially free, wealthy, rich people is that they pay themselves first. Paying yourself first means putting your money into a place where it can work for you. It is not, however, always an easy habit to establish. Many people have the propensity to pay the bills first, buy the things that they want, or do things for others BEFORE putting their money away.
Participants learn what it means to “pay yourself first” and have the opportunity to practice it with every round of the game!
4. It’s Better To Tell Your Money Where To Go Than Ask Where It Went
Most people get a paycheck, put it in the bank (or have it direct-deposited) and just start paying bills and spending money. They think to themselves, “Well, I’ll save some money if there’s any left over.” We call this the Left-over Investment Strategy – which rarely works. This strategy often leaves people with a lot more “month” left over at the end of their money.
Participants learn the importance of knowing where their money is going and planning how much they’ll spend and save each month. In The Money Game, the basic living expenses are represented by big white bags and the amounts are the same every round. Though the numbers are conceptual (not real world), the lessons are very real.
5. Assets Feed You, Liabilities Eat You
One of the biggest lessons most adults learn the hard way is that they spend way too much of their precious financial resources on what we call “Piddyjunk” in The Money Game. In addition, one of the biggest distinctions we make in The Money Game, as compared to other financial education programs, is that we consider the home you live in a liability. It’s usually the Bank’s asset, not yours! (Yes, it’s an investment, but it isn’t an asset by our definition, which is: assets put money IN your pocket and liabilities take money OUT of your pocket on a regular basis.)
Participants learn that by wisely investing in the Three Pillars of Wealth (stock market, real estate and business), they will begin to receive this wonderful stuff called Passive Income. They learn at the beginning of the game that most people only know how to EARN money by trading their time and energy for money (i.e., a job). We expose them to MAKING money, which is when you put your money to work for you by investing in the Three Pillars.
6. Don’t Put All Your Financial Eggs Into One Basket
All too often, adults put all of their investment/retirement money in one place (and a variety of mutual funds don’t count). It’s critical that kids learn the different asset classes (Three Pillars) and the importance of investing in at least two and preferably all three. This is also referred to as diversification.
Participants learn the importance of investing in more than one type of assets. The Event Cards that begin during Round 5 often have something to do with the type of asset they invested in during previous rounds (if they chose to invest, that is). For example, all of their real estate is rented and they receive bonus passive income J OR a company in which they own stock goes bankrupt and they have to turn in their asset (poker) chip and don’t receive passive income any moreL. They quickly learn to diversify among the Three Pillars.
Note: Event Cards are “pulled” throughout the game to create variables in the process and provide opportunities for additional lessons.
7. Save Early, Save Often
It is often touted that compound interest is the most important concept kids can learn. These days, it’s rare that individuals get wealthy from compound interest. Unless you’re a financial institution, credit card company, private lender of some sort, or invest in second mortgages, your wealth is no longer coming from compound interest.
Albert Einstein is praised for this comment, “The most powerful force in the universe is compound interest” but it’s actually compound growth that kids need to understand.
Participants learn that it’s not compound interest but compound growth effect of investing that helps people get rich and become financially free. By looking at investments in terms of the three pillars, they see how each produces wealth:
Stock Market – investors make money through the appreciation and depreciation of stocks (depending on the strategy used) and regular dividends that produce cash flow. Some of the growth may be interest if part of the money is invested in money market funds.
Business – investors make money because the value of the business appreciates and eventually the owner sells the business. The profits produce the cash flow necessary to live on. (We include business models such as internet businesses and network marketing residual income.)
Real Estate – investors make money on real estate from the appreciation of the real estate itself but, more importantly, financial freedom comes from having enough positive cash flow from rental property to more than cover the investor’s living expenses.
8. It’s Not How Much Money You Make That’s Important; It’s How Much You Keep
Adults have a tendency to think that having more money will solve all of their financial problems. In truth, it’s generally not more money that solves their problems but learning to better manage and invest the money they already have. Once that happens, yes, it’s great to learn how to increase the amount of money that is coming in.
Participants learn the importance of budgeting their money and the importance of not letting their accounts go to $0.
9. Money Is A Tool To Reach Your Dreams
More than any other substance on the planet, money makes people crazy. By and large, people have used money as a measure of self-worth, success, authority, and wellbeing ~ to mention just a few.
Participants learn that money is just a tool. Similar to needing a hammer and nails if you’re going to build a deck, money is an essential tool to build financial freedom and security.
10. Make Money Grow By Putting It To Work For You
Of all the investment principles, putting your money to work for you is both the most illusive and most challenging aspect of becoming financially free. It’s the investing piece that is so often left out because financial education instructors continue to be focused on what to do with the paycheck they assume all their students will eventually have. (One of the reasons this is prevalent is that the instructors themselves only know how to earn money by having a job.)
Participants learn that it’s the entrepreneur who becomes financially free the quickest. Those who started the business, invested in real estate or learned how to invest in stocks in a way that produced ongoing cash flow are the ones who have more money coming in than going out. In The Money Game, participants invest in the Three Pillars of Wealth and get to experience of receiving passive income from those investments on a monthly basis (well, unless one of our Event Cards changes things:).
So, there you go. Just some of what kids and teens learn in our financial education programs. There’s a whole lot more, of course, like how to meet and greet others, the power of judgements
To subscribe to this blog, just click here. Once or twice a week, you’ll receive my musings about financial education for kids and teens (and us big kids, too)! Please know that sometimes my ideas will invite you to think differently about money:-).
