There you are…faced one morning, noon, or evening…with the stark reality that you don’t have a clue how to manage your money, let alone how to prepare for the R word…Retirement.
How will YOUR older self be living?
Though the concept of retirement has recently moved aside and allowed the idea of financial freedom to pass it by, one basic fact hasn’t changed…one of these days you’re going to look in the mirror and see the older self that lives inside of you right now and that older self is going to be living the life you are currently preparing for him or her to live.
That visualization, for most people, isn’t a pleasant one. Tears, fears and anxiety often follow as you realize you aren’t doing what you need to be doing so that YOUR older person can live a nice, comfortably secure life without having to work for a living anymore.
Making The Decision To Change
The decision to change yourself, and in essence, your life, can be the hardest decision you ever make. It means giving up your excuses, your reasons, your comfort zone (which usually isn’t very comfortable). It means that you have to stop blaming others for your situation. It means giving up the way you currently ‘do money’ and taking on a whole new paradigm of making, saving, spending and investing money now and in the future.
It means changing your priorities, asking bigger questions, answering questions from friend and relatives who don’t understand why you’re changing or are jealous because they haven’t been able to make the same decision yet.
It means that once you make this decision to change, your whole life is going to morph into new and unfamiliar territory. This will ‘eventually’ be a wonderful thing, but it can be a little scary at first because you have to let go of what you know in order to move toward what you say you want for yourself.
What It Takes To Change
Let’s look at this change with a critical eye. What you’re saying is this…
“I want to go from a life of financial struggle and stress to a life filled with financial security and peace of mind.”
Did I get it right? Do I understand that this is truly want you want?
You’re sure? Absolutely sure?
OK, then let’s do it. Put on your sneakers and do a little stretching right now because we’re about to take off down an exciting new path and I have to say it may get a little bumpy, feel a little overwhelming, or out of control at times. But think of it as the greatest Disney ride on earth and someone (that would be you!) just gave you a once in a life-time chance to hop on and go for it.
Step #1: STOP COMPLAINING ABOUT WHERE YOU ARE!
Step #1 is in all caps for a reason. Have you ever noticed that things don’t change until you accept them the way they are? You can’t change things from the standpoint of hating them. It doesn’t work for some reason. Beside, people who complain all of the time are miserable to be around.
Complaining isn’t helpful. Complaining doesn’t move anyone forward. Complaining certainly isn’t positive in any way and the whole time you’re complaining you COULD have been learning something, fixing a situation, helping someone or in some other way being a positive contribution to life.
So, stop complaining already!
Did you notice the world just got better all of a sudden?
Step #2: Make A Commitment To Do What It Takes
Have you ever stood in line for a ride or a buffet and for whatever reason, stepped out of line? Unless you talked someone into ‘holding your place’ (which generally annoys people around you because those people STAYED in line), where do you have to go to get back into the line? Exactly…you have to go back to the end of the line and start over.
Now this isn’t to say that sometimes you find yourself in the WRONG line. Then it’s a matter of seeing it early on and changing lines. This is perfectly acceptable.
I’m talking about getting OUT of line or CHANGING lines over and over again because the line gets too hard to STAY in. All you end up doing is standing in line for the rest of your life. And the metaphor here is painful, at best. People who stand in line are generally people who are dependent on others for their well-being.
The payoff? When you’re in the RIGHT line for the RIGHT amount of time doing the RIGHT thing, what you finally get to experience is pure, unadulterated, amazing personal satisfaction that you DID IT YOURSELF. Finally, YOU are in charge. YOU have what you want. YOU get to live the life YOU designed.
And why is this finally happening? Because you did what it takes and stuck it out…no matter what. (OK, I hear you trying to complain or make up excuses. Back to Step #1 if this is you.)
Step #3: Start Noticing What Interests You
As you can tell, I don’t need to yell anymore. I have your attention and you’ve gotten through checkpoints #1 and #2 safely and surely. Good job!
Now that we’re ready to get the ball rolling, I want you to pay attention to what interests you in life. What are you doing when you forget to eat or drink or put off going to the restroom for hours. Whatever ‘this’ is, is the thing that you can do for the rest of your life (or at least a long while) and not refer to it as something you ‘have’ to do.
Most people have several activities or areas of interest that affect them this way. Some people don’t have any. The former have an easier road to travel but rest easy…if you’re in the later group, once you get past # 1 and #2, you’ll feel a shift inside and have a sense of peace about how you maneaver down the path to financial security and peace of mind.
Once you’ve discovered the interest that you want to focus on, become an EXPERT at it. Practice it, read everything you can on the subject, get a mentor, etc. Once you’re the expert, doors you had no idea that existed begin to open for you.
Ask Better Questions
Step #4: Ask A Simple Question
“Why is it so easy to turn _______________ (inset interest here) into a lucrative, enjoyable business that does good in the world?”
This is called an AFFORMATION. And no, it’s not affIRMation spelled incorrectly. AfFORMations are afFIRMations turned into questions. You see, my friend, Noah St. John, created Afformations when he realized years ago that one of the most important reasons people don’t get what they want is that they are asking the wrong questions.
Imagine asking yourself, “Why am I such a looser?” or “Why am I so clumsy?” or “Why am I always broke?” The Universe answers, “Well, because…….” And so it goes.
But with an Afformation, you learn to change those unsupportive questions into powerful supportive questions that, coupled with the right action, bring untold resources into your life.
Now go back to the question above and notice what you try to answer yourself. Take detailed notes and before long, you may be surprised to find you’re looking at the beginnings of a brand new business that will bring you rich rewards.
“Why am I so happy and my life is filled with peace and security?” Now THAT’s a great question!
Step #5: Get Excited About Everything You’re About To Learn
Let’s face it, sometimes we know what we should be doing but just aren’t doing it…yet. And sometimes you don’t know what you should be doing because either, 1) no one taught you, or 2) you didn’t realize you needed to know it yet.
Money is one of the topics most people don’t learn in school, and often don’t learn from their parents. Business is also a topic this isn’t mainstay in our school systems, yet, but it should be!
Since most of the energy in this county is focused on getting people employed, i.e., getting a J.O.B., most kids don’t leave school with a sense of what they can create outside of the job construct. But in actuality, this IS where wealth is normally created.
How do you learn what you need to learn to be successful? Oh, that’s easy and it doesn’t require going back to get yet another degree. Here are the simple, easy steps…
1) Go to the library and check out a bunch of books on money, investing and how to start and run businesses.
2) Take them home and start devouring them. Don’t just read them. Get a journal. Take copious notes. Think deeply on what you’re reading. Pause often and ask yourself how you can use this information to turn your interest into a profitable venture.
3) Take those books back to the library and repeat the process.
4) Keep your eyes pealed for workshops, seminars, meetings, networking events, adult education classes specific to your topic, etc. Attend the ones you can afford, offer to volunteer at the ones you can’t, ask for scholarships to the ones you really want to go to. You never know unless you ask!
Again, take copious notes and continue to ask questions and apply the information to your area of interest.
5) Research your topic on the internet. These days there is no reason or excuse to be ignorant on any topic. The internet contains more information than any of us every imagined would ever be available to us in our lifetime. At the click of your mouse, you can have before you, everything you need to know to finally be the CEO of your own life!
Step #6: Now Get Out There And Do Something
This is the most important step; well, this and knowing you CAN actually create the life you want. We’ve talked about mindset and belief systems a great deal so we’re not going to in this blog. If you still struggle with your financial self-esteem, please give yourself the gift of reading T. Harv Eker’s book, Secrets of the Millionaire Mind, and then attend his Millionaire Mind Intensive seminar. I promise doing these two things will set you on a path of unparalleled rewards.
(Warning to all you perfectionists out there. STOP thinking you have to have things perfect before you do them, sell them, launch them, teach them. You don’t…there’s no such thing as perfect, anyway. ‘Perfect’ is a distraction, an excuse, a reason for you not to have to change. Get over it.)
There really is only one thing standing between where you are and where you want to be, and that’s ACTION. You can visualize and afformationize and affirmationize and use the laws of attraction until you’re blue in the face and nothing will happen until you actually take some action toward what you want in life.
Step #7: Enjoy The Journey…No Matter What
As far as any of us really knows, we’re on this planet for one go ’round and none of us know how long that go ’round is going to be. So, you might as well enjoy the journey.
And if you decide you don’t want to enjoy it? Please do yourself, and the rest of us, a favor and at least get through Step #1.
I have found that many people, including me, do indeed learn from other people’s mistakes. I have also learned that it’s completely OK to be transparent with the people who believe in me and support me in what I do in the world.
I have noticed that when I do share the mistakes I make, that I get tons of comments and personal emails from those of you who have made similar mistakes and learned the same lessons. It is my feeling that the more we see that we are alike, the more we are able to have compassion for others and the more we are able to make a difference in the world.
THE SET UP
Room for Rent
About five weeks ago, my current renter gave notice that he was moving. His father, who lives in another country, had had a stroke and he needed to go see him. Since he was about to spend three months traveling around world and moving anyway, I told him it was fine to move out early and we disregarded the standard 30 days notice thing.
He was grateful, I had helped…it was all good. He had been a super renter and I was saddened by his leaving but excited that he was off to go see the world and that he was such a wonderful son to his father!
At this point, I needed another renter. You see, I made a CHOICE seven years ago to live in a larger house by the ocean here in Santa Barbara and have roommates rather than live in a smaller place by myself. My programs are all about our choices and taking 100% responsibility for the ramifications, both good and not so good.
Up until four weeks ago, I was pretty happy with that choice.
Because I am in the throes of building this financial literacy business, I made another choice to rent out BOTH of my spare bedrooms in order to live leaner and more comfortably while the business grows. I blogged about this a few weeks back and many of you sent wonderful emails thanking me for being ‘a real person’. Thanks for that!
So, five weeks ago, both of the rooms were vacant and I needed to find a couple of renters. Not usually a tough thing to do because I am close to the beach, the community college, and downtown. I did the usual things…put ads on CraigsList, posted a sign in my windows, etc.
ENTER THE PROTAGONIST
I get a call from Charles. He sounds fine. He ‘says’ he’s an engineer putting his daughter through med school and just needs to live simpler and cheaper. He’s in his 50’s. I buy this story as he says he’s also gone through a divorce and I know divorce has taken a bite out of many a man’s retirement plans and accounts.
He comes over, we talk, he looks at the room, loves it and we sign a rental agreement March 1. He moves in on the 3rd. This is when ‘stuff’ starts to happen.
He told me he was quitting smoking (I know…I can hear you thinking). I tell him he needs to smoke completely off the premises. We catch him several times in the back yard and on my patio and later on, on the balcony of his room. This is the first sign that he lacks respect for others.
He is up at all hours, sleeps during the day, ‘works’ very weird hours, or not. I begin to do research on the internet on drug use. His behavior reeks of meth use and I realize, because of my ignorance in this area, that I could have known this by his facial features. Sometimes ignorance is NOT bliss!
He doesn’t do anything I ask in terms of household rules and just keeps saying he’s sorry. I have to ask him several times to not wear his shoes on the carpet before he finally understands what that means.
In a genial conversation, he shares that he’s recently broken up with a woman who drove him mad (blaming victim enters here). He tells me he’s not going to tell her where he’s living but, two days later, she is here for dinner – drunk, reeking of smoke, and spending the night. Not OK – that’s also in the rental agreement. (Are you beginning to see where this is going?)
Over the past four weeks, things have disappeared…most noticeably in the food department but also in the lotion department (don’t even ask). The excuse? “Oh, we buy the same brand.”
This has happened numerous times now and, as you can imagine, none of us trust him in the least. He is moving out today if it’s the last thing I do and he’s already been warned I will go to the police and file a report of his stealing, and/or suspected drug use, if he’s not out by 3:00 PM!
I have never, in my life, felt so uncomfortable in my own home and it has been the most disconcerting experience.
THE LESSON
I could start this sentence out with WE…but I won’t. One of the most poignant distinctions I learned in one of T.Harv Eker’s courses, was that when we use the word ‘we’ as in the universal ‘we’, we really need to be using the word ‘me’ or ‘I’.
So here comes the lesson…
‘I’ have learned over the past four weeks that ‘I’ am perfectly capable of making a very poor choice, and I can completely disregard my gut instincts, when money is a motivating factor.
There, I said it. I let this sick man rent my room, and disturb my otherwise peaceful, glorious home environment, because I wanted help with the rent. I didn’t get enough references. I didn’t stop to check in with myself. I didn’t do all of the usual things I would have otherwise done in this situation…a very important situation at that. Choosing the right person to live in my home, under my roof, with me, is critical and it requires my utmost attention to how I am feeling ‘inside’ about it.
EMOTIONAL FINANCIAL CHOICES ARE USUALLY NOT WISE FINANCIAL CHOICES
So today, as you are reading this post, check in with yourself and ask yourself these three questions:
Where have you made poor choices where money was involved and what was the emotion behind the choice?
What choice might have been more supportive for your own sanity, safety, health and of course, happiness?
And lastly, how could you have been more able to make that better choice?
I hope this experience of mine, and the lesson that came from it, has been helpful (if somewhat entertaining). I appreciate the ability to share my life with you in ways that may inspire and motivate you to make better financial choices for yourself.
“Save a portion of your money for later,” you beg them, knowing better than they, that later comes sooner than we can ever dream. They look at you with that, “Ah, mom, enough with the save for later thing!”
You take a deep breath and release a heavy sigh, not knowing how to get your children to save money. As parents, we know all too well the ramifications of not saving…we’ve all been in situations where we wished we’d saved a little more or invested a little wiser. We know that our children must learn how to save their money, and a whole lot more, if they are going to ever create the life they want for themselves. One of the most common questions I get from parents who want to teach their kids about money is simply, “How DO I teach my children to save?”
There are some great answers to this question…but let’s look at the basic concept of SAVING first.
Saving Is An Unnatural Act
Saving only happens naturally when you realize there is a profound REASON to save…when you begin to understand the idea of anticipation, which is the expectation of something happening in the future. For children, they have difficulty with this concept…they are brilliant ‘in the moment’ and not very good at ‘in a minute.’
The other thing about saving is that we’re hard-wired NOT to save. We’re actually hard-wired for instant gratification and if you look back at when we were cavemen and cavewomen, it makes a lot of sense.
Imagine, there you are, spear in hand. You’ve gone out with ‘the guys’ to kill a buffalo. Just then, a big one walks by…you whisper to your hunting partner, “let’s wait for the next one.” He looks at you and says, “What are you, nuts? What next one?”
You see, back then, we needed to get the deer and pick the berries right then and there because our survival depended on it. And our brains evolved in such a way as to provide us with powerful chemicals that lead to positive, happy feelings when we ‘get it now’ instead of waiting until later.
For a great read on this subject, do a search for Time Magazine’s article, “Why Johnny can’t save for retirement.” You’ll begin to understand why marketing most products and services to us human beings is so easy.
Why Save Anyway?
It’s been well established that in order to teach people anything, they must believe the information is relevant to them somehow. Saving is one of those topics.
In order to get children to listen when it comes time to teach them to save, it’s important that they understand why it’s relevant to them. Let me tell you a little story…
Years ago there was a young man, about 15 years old. His name was Larry. Larry, being the bright, resourceful young man that he was, got himself a little job during the summer between 10th and 11th grades. He was so proud of himself…he got his first paycheck of $100 and showed it to his mom. He told her about all of the stuff he was excited to go buy with his first paycheck.
His mother, doing the best that she could, instructed, “Now Larry…you need to save some of your money for later when you’re older and want to retire. Every time you get a paycheck, just put $50 away. That’s all you need to do.”
Larry was old enough to understand the idea of retirement ~ after all, his grandparents were all retired, living what he had been told was “the good life.” Larry did some quick math in his head…
OK, $50 times twelve months is $600. $600 times ten years is $6000. Hum, times twenty years is $12,000. That’s not much money, he thought to himself. He decided, based on those quick calculations, to wait until he was making ‘real’ money to save for retirement. And off he went to spend his hard earned cash.
What Larry’s mother neglected to show him was how compound growth (not just compound interest) causes the value of money to grow exponentially over time, especially when you begin investing early. Larry might have been more interested if she’d shown him how $3000 a year invested for eight years from age 19 to 26 could grow to close to a million dollars (invested at 10%) by the time he was 60!
What Larry’s mother left out was the WHY! And kids, just like adults, need to see and understand the WHY behind what we ask them to do, or, as you already know, they will rarely do it…unless you make them. Wouldn’t it be sweeter to inspire them to save on their own because they understand the WHY behind it? Absolutely.
Understanding There IS A Later
So how do we teach children there is a “later” to save for? One way is to sit down and help them develop a life timeline and talk about how much money they might need during each stage.
Start by drawing a line on paper ~ put the word ‘birth’ on the left and ‘death’ on the right. Put 50 years old in the middle.
Birth — high school — college — get married — have kids —— work ————— retire ——- Death
0 age 50 ?
Then talk about the different phases they might go through during life…start with high school, the possibility of college, the working years, marriage, child-rearing, empty-nesting, retirement. Explain that this is just one idea of what life might look like for them and that their life will develop based on their choices and decisions they make as they go through life.
Ask them how old they’d like to be when they stop working for a living. Put this age on the time line as well and then figure backwards to start introducing the WHY of saving and investing to them. (This is a great exercise for you, as well.
Let’s say your son or daughter is ten years old. Let’s say they want to retire or be financially free by age 45. This means they have 35 years to prepare for retirement. Remember, this is THEIR timeline so if they want to stop working when they’re 45, it’s perfectly OK. Just figure the numbers so they can see how much money it will actually take for them to be financially free at 45.
Now ask them to figure out how much money it’s going to take to live the way they want to live when they’re 45 years old. Again, a great exercise for you to do at the same time. Let’s say they come up with a lifestyle that requires $5000 a month. Next, based on the standard model of financial planning, you need to help them figure out how much money they must have invested with a 6% return in order to receive that $5000 a month.
Though they may be too young to understand, this is a great time to introduce inflation and taxes. You don’t necessarily need to work these two figures into the equation but just mention that over time the price of things goes up and that they’ll probably have to pay taxes on the money they make each month before they end up with $5000. Bottom line…the five grand is their monthly net income.
OK, here’s the simple calculation for this scenario. They will need at least $1,000,000 invested with a steady rate of return of 6% (interest rate or growth rate) to yield approximately $5000 per month to live on.
Now comes the fun part. Take the $1,000,000 and divide it by the 35 years they have until they want to retire. You get roughly $29,000! Ask them if they think they can save $29,000 each year for 35 years (remember, they’re 10!).
You probably have their attention now.
Explain The Why
What’s next? This is the WHY you’ve been waiting for them to ask about. WHY they should start saving and investing early? This is when you bring out compound interest charts and explore how money grows over time and that the earlier they start, the better.
I’ve attached three pages from our Financial Freedom Playbook that you can download and chat with your kids about. Oh, and there are tons of investment calculators on the web where you and your children can explore how different amounts of money invested at different rates of return for different lengths of time multiplies.
Show Children The Unpleasant Alternatives To Being Financially Free
I’ve heard it said that people change for one of two reasons; to move AWAY from pain or move TOWARDS pleasure. Studies show that people are far more motivated to move AWAY from pain.
One of the things that many parents do (that isn’t always the wisest in the long run), is protect their children from the real world…the world where people are sick, dying, living in terrible conditions, don’t have enough to eat.
It’s a good idea to expose your children, in safe doses, to things that most of us would label as undesirable for ourselves and the ones we love. These types of experiences can have a profound effect on what a child chooses for him or herself and can help influence a child’s choices later.
Similar to the effect that taking a might-be juvenile delinquent into a jail cell (or, better yet, letting him sleep in one over night) might have on him, so might taking your children into a very poor, run down part of town have an impact on their financial choices and habits.
When my son was 12-years-old, I had the opportunity to take him through Tijuana, Mexico with two big strong men as our escorts. We drove for quite a long time with him looking out the window in disbelief, his soul not understanding what his eyes were showing him.
We talked later about this trip on many occasions and I believe to this day that it was a good experience for him as he had grown up under the wings of safety and good times in a little Oregon town until that moment. Sometimes seeing the REAL thing makes it more believable than when you see it on TV.
Expose Them To People Who Made, And Didn’t Make, Wise Financial Choices
We all know retired people who live well, having saved and invested for this time in their lives and are grateful to have the freedom to enjoy retirement the way they wish.
We also know a whole lot more who didn’t save and invest wisely and are now paying the price, still working part or full-time and continually feeling exhausted and financially stressed.
Find willing souls in both camps and ask these people to spend time with your children, and do this in the context of learning from others who have been there. You might be surprised at what motivates your son or daughter to make certain types of financial decisions later on. Some of my most memorable moments as a child were when I had the opportunity to ask my parents’ friends questions about their own lives.
Provide Saving And Investing Systems And Strategies For Them
Once you have your child’s attention and he begins to see the WHY behind saving and investing for his future, you’ll need to help guide him, giving him systems and strategies to use to be financially successful as an adult.
Many of you know The Money Jar system that we teach in our programs. It’s a way to allocate the money that comes into and goes out of our lives. It involves recognizing the many jobs that money actually has in our lives.
The Jar System is a great place for anyone to start wanting to develop great money habits. Click here to download our ebook, The Money Jars: Your Magical Money Management System.
Pay Them To Learn About Money
First, if you haven’t purchased The Ultimate Allowance book yet, please do yourself a favor and order your copy now. There’s a wealth of information in this book that will help you financially educate your child like a pro. The book shows you how to use the money you already spend ON your child to give them the practice they need to develop financial skills that will empower them forever.
Second, I actually do mean pay them to learn about money. Check out the list of financial books at www.innerwealthpublishing.com/booksgame.php. Order a few of them from Amazon and pay your son or daughter $10-$25 to read each one. Before you pay them, have them give you a book report and have a conversation with you about how they will use the information in each book.
I promise this may be the very best investment you ever make in your child’s education! After all, you do want them to move out and STAY out, right?
The Ball Is Now In Your Court
So, in summary, yes, teaching and inspiring our children to save and invest their money for a future they can’t even imagine yet, can be tricky and can take some parental creativity. But with a little planning on your part, and reading on their part, you might find that the process really isn’t as daunting as you think.
Feel free to give us a call or shoot us an email with questions. And please leave your comments here on the blog for others to read, enjoy and learn from as well.
And as always…this is just something else to think about…
One of the things I tell the folks who attend our life-altering Creative Wealth Train-the-Trainer workshop is that I need them not to put me on a pedestal. It might seem like a strange thing to say right off the bat, but here’s why I say it…
I want them to know that we all make mistakes and it’s OK to make them. That I am no different and I am the person I am because of those mistakes and what I’ve learned from them.
I want them to know that their best work will come from mistakes they have made and lessons they have learned.
I want them to know that they will become better teachers when they learn to teach from a profound place of authenticity and honesty…no matter what the topic.
I want them to know my background, that I’m not perfect, that I’m still learning and that that’s all there really is in life…learning and growing (well, in addition to love and chocolate, of course).
I couldn’t agree with him more! After all, how do you think we all get good at what we’re good at? We had to learn, just like the next guy and we were prompted to learn by mistakes, lack of education, missing pieces, emotional or physical pain, and a whole host of other motivators that move us to take on the challenges we take on.
Life Lessons you can’t afford to ignore
So I was sitting here pondering what to share with you today and what came bubbling to the surface were the many lessons I have learned, and am STILL learning, about money, and especially, business. So if you’ll humor me…here goes.
Lesson #1: Never, never, never fall in love with your idea.
It WILL morph many times and what ends up working may not look at all like what you started out with.
Lesson #2: Get advice.
Get LOTS of advice. And then get MORE advice after that.
Lesson #3: STOP with the too many projects thing!
This is one of my biggest challenges. I am delighted and fascinated by so many things and the thing that I am best at and love the most is creating. My mind never stops thinking up new ways to do things and the projects that are on my ‘back burner’ could fill up the ARK!
I am challenged by this almost every day and it is difficult to put my creative juices ‘on hold’ simply because I need to focus on marketing the amazing programs and products that already exist.
What I do to force myself to focus now is to remember that unless millions of people and children experience our unique brand of financial education, I can’t make the difference I truly want to make in the world.
Oh, and I have developed a ‘to do’ list system that keeps me focused. I guess that’s lesson 3A:-)!
Lesson #4: Finish what you start.
Need I say more?
Lesson #5: You can never do enough planning.
Budgetary planning, marketing planning, PR planning, packing for camp planning, future planning! Even though I teach children and adults about setting goals, and know they are important for many most, it’s important to understand yourself in relationship to goals in general.
I set goals often for myself (I do practice what I preach:-) but the idea (and ability) of setting LONG term goals has always alluded me. I’m great at setting short term goals deadlines and completing projects on time; I just don’t ‘get’ the long term thing. Never have…never will.
What I want to share with you about goals is this…what has helped me is learning a long time ago that some people are goal-oriented and others are process-oriented. I am a pure process-oriented person and once I understood and accepted that, I was able to joyfully wrinkle my nose at the idea of setting long term goals. I’d invite you to do the same if you are a process-oriented human. Your life will instantly become more enjoyable.
Note: There’s a great book called Goal Free Living that you might enjoy. It brought me peace and sanity!
Lesson #6: Make sure you ALWAYS and forever listen to your gut.
In the beginning, when I started the first Money Camp for Kids program in 2002, I chose to go the nonprofit route. And I always had this sensation that something just didn’t jive for me there. After all, here I was teaching kids to start businesses, be little (and BIG) entrepreneurs, be their own BOSSes, create passive income vehicles and there I was, writing grants (which I never did very well because I could barley stomach the idea) and doing programs for less than they were worth. I had fallen into what I call the “Non-profit Myth”…that’s the myth that because something is considered ‘doing good’ in the world, it somehow should be given away and not paid for. YUK.
Two years ago I switched gears to build an empire for ME because after all, I was teaching kids to be responsible for themselves and being one of the most responsible people on the planet, I wasn’t able to do that for myself with the nonprofit. My gut feels much better now running it as a for profit corporation. I will make it or fail as a result of my own doing…it’s not dependent on anyone giving me funding for this or for that. I prefer it this way.
Note: the nonprofit does still exist, however, as we use it to collect scholarships for low-income families. This is how it SHOULD have been used from the beginning. (Hidden lesson:-)
Oh, how I wish I’d learned this earlier. I’m one of those who knows how to do it all so…I do it all! Stupido beyond belief. Don’t do that. There are so many people around the world willing and wanting to do all myriad of tasks for you for very little so you (I) can do what we should be doing: working ON the business and not IN the business. I’m praying I didn’t learn this lesson too late.
Lesson #8: Don’t put all your financial eggs into one basket, or your business.
I teach this. I practice it with my retirement accounts. I’ve learned many financial lessons over the past several years the hard way. Lessons like:
Don’t buy real estate in Arizona when the market is high (I was naive and didn’t know what questions to ask…I was trying to do what I was taught…real estate is a great investment, right?) and especially don’t buy it when your best friend says, “You know, there’s something about this deal…”
Don’t assume your financial advisor WILL get you out of the market on time. He didn’t. I took all my money back and invested it in stocks that I knew and understood (I’m an Apple girl…what can I say:-). What he lost in a heart beat I have made back in a year. I like being in charge of my own investments.
It’s important to pay yourself something out of your business and know how long you can go on how little before you find yourself looking for ‘work’ in order to keep the business going. When the business needs cash to grow, like Creative Wealth does now, it’s important to understand your own limits. I’m examining them now. We should all examine our own limits on a regular basis.
Lesson #9: It’s perfectly perfect to enroll those who have come to your programs, loved them and taken away value to help you with projects in the future.
My best friend and partner, Steve Gordon (the impetus behind our new coloring book) has told me for years to ask previous attendees to help volunteer at events, help with marketing and more. And I’m happy to say that I have learned this lesson well and that many of you show up and help regularly. Thank you for that. And thank you Steve for continuing to suggest it until I ‘got it’!
Lesson #10: Know when to quit.
You know the saying “Winners never quit and quitters never win”? Well, I’ve been pondering this saying for a long time now, and I’ve even talked about it before in articles. I think it’s ‘bullpucky’ as they say and here’s why…
Winners–people who accomplish things they set out to accomplish–quit all the time. However, there’s a big difference between quitting because you just don’t want to work hard anymore and choosing to quit because you realize an idea just isn’t going to work and to continue pursuing it would be financial, emotional, spiritual and mental suicide.
Quitting can be the exact right thing to do.
One of my favorite passions (I have so many of them…see Lesson #3) is to invite people to ‘think differently’ about things. To ask them to question WHY they believe what they believe and to inquire within themselves as to how a particular belief serves…or rather DOESN’T serve…them. More often than not, the context through and by which we live our lives isn’t a context we’ve consciously choosen for ourselves. We’ve inherited this context from our parents, our friends, the media, our teachers, our culture and more.
So what have I REALLY learned since starting down this path to teach myself, as others, about money, personal finance and wealth?
That when you do something that helps other people, it’s hard to call it work and at the same time, that work can take over your life and is not necessarily the best thing for you in the end.
That the only thing that really matters is that we consciously, with full awareness, learn to choose how to SPEND our days here on earth. How are you SPENDING yours?
That it’s OK to ask for help when you need it.
I’m going to end this with a reminder that as I am just a girl who had an idea and acted upon it and has learned lots of lessons and continues to do so. And YOU are just a guy or girl in the exact same place. I enjoy it. I hope you do as well.
“I’ll put some money away if there’s any left over.”
This is most people’s attempt at saving money for their future. Only problem is…there’s rarely any money left over.
This is also called the Not Having A Plan method of financial planning. The end result is that you end up 60 years old without a pot to ‘—-‘ in (as mom would say) wondering what the heck went wrong.
Pay Yourself First
Pay Yourself First
Here’s where Pay Yourself First comes in. It’s THE MOST IMPORTANT wealth principle you can learn and the most important money habit you can learn to do, right behind Financial Freedom is Your Choice, which we’ll get to later.
Paying Yourself First means that every time a dollar bill flows through your hands from an outside source, you take a little piece of it and put it away and by putting it away we mean Save it, Invest it, Buy assets…anything that will help create an income stream for you when you no longer wish to, or need to, trade your time and energy for money (i.e., work at a J.O.B.).
Paying Yourself First means that before you pay your rent or mortgage, buy those organic veggies, pay for the cell phone and the car, you take a piece out and pay yourself. Consider it a bill from your future self!
Consider this for a moment…are you or aren’t you planning on being an old fart one day (that applies equally to both sexes by the way!)? If you are, have you considered that this older version of yourself is counting on you to prepare for his or her future right now? They want you to do the right thing NOW so you can do whatever you want when you get to be them later.
So stop for a moment and close your eyes (after reading this whole paragraph, of course:-). Picture in your mind your older self. Really get some detail…what do you look like, where are you living, how are you living, how is your health, what color is your hair, are there pets, are you alone or with a partner?
Just let whatever you see sink in. Now, ask your older self what he or she would have you do right now to prepare for that day in the future. Just listen and hear what they suggest. (NOW you can close your eyes:-).
For a nice visualization for this process, Download here.
Paying yourself first is one of the most important habits you can establish with your money. So much so that every adult who didn’t do this starting at a young age says they wish they had.
Paying yourself first means that…
• You’re establishing saving for yourself as a priority. You know that you are the only one responsible for your own future and you’re willing to do whatever it takes to make sure that older version of yourself is well provided for.
• You’re establishing the oldest, most time-tested financial habit on the face of the planet. In George Clason’s 1926 classic, The Richest Man in Babylon, his main teaching is to take a few dollars and put them away. It’s how the wealthy get, and stay, that way.
Here’s a simple but straightforward video from Brian Tracy on the power of Paying Yourself First…
HOW to pay yourself first can look like many things...
• Have money deducted from your employer’s retirement plan (401k, 403b, etc.) if they offer one. Enroll in this plan as soon as you start work. Even if you don’t have a clue what to invest this money in yet, get in the habit of having the money deducted so you are living on less. Then, take the time to do some research or hire a financial planner who you pay for advice to help you determine which mutual funds to invest the money in.
• Start a Roth IRA. It’s one of the smartest things anyone can do, especially a young person! If you have a teen, get one started for them as well but remember that the money contributed to this account must be what is called Earned Income. If you have a business where you can pay them a paycheck for doing actual work for you, this money can be contributed into the child’s Roth IRA. Starting early so that the power of compound growth has a long time to impact this account can make a million dollar difference when your child is 60.
• Open your own Investment Account in an online trading company like TDAmeritrade.com or Scotttrade.com or Fidelity.com. Choose one with the system that is easiest for you and look for a quality education component.
• For lack of any better plan, open a high interest savings account at an online bank like ING Direct or FNBO Direct. Set up automatic transfers out of your regular bank account or directly from your paycheck if you can.
How much should be put away…
The standard answer to this question is 10% of your net pay. The BEST answer is “it depends.”
It depends on whether you’re a male or a female. Women live longer, earn less, have fewer years of earning power (kids and aging parents), are widowed more frequently and end up divorced more often raising children. Women would be wise to pay themselves 12-15% or more each month.
Men can start with the classic 10% figure and modify as needed.
The more you put away now, the quicker you can be financially free later.
Remember, Paying Yourself First is the most important bill you pay each and every month. Do it now while you have the time and the energy.
If you’re like many people, you trudge from one task to the next; rarely considering that the life you crave so desperately is only a realization away.Most people are completely oblivious to the power that’s available.
The power to create the life you want is enormous! By simply flipping the right switch it’s possible to ignite the machinery that moves your life from your own personal level of desperation to a life filled with love, purpose, warm fuzzies, all while realizing the fulfillment of your life’s most passionate desires.
Wise people throughout history have learned how to break their own cycle of self-imposed slavery by mastering the following Five Degrees of Freedom.
1) Freedom of Environment
2) Freedom of Family and community
3) Freedom of Money
4) Freedom of Thought
5) Freedom from Meaning
Let’s explore the freedoms one at a time…
1) Freedom of Environment
The first degree of Freedom happens when we’re born in a country, state, city or neighborhood that has, as its basis for existence, support for basic human rights: freedom to say what we want, write what we think, sing what we feel, read what appeals to us, print what we can imagine, act upon our choices and be free to experience the natural effects of those choices.
This degree of Freedom includes our right to pursue happiness, have access to basics such as clean water, clean air, access to education, transportation, the ability to travel about and the security to move freely without threat.
2) Freedom of Family and Community
The second degree of Freedom comes when you’re born, or adopted, into a family that lives in a community of people that loves you, cares about your growth as an individual, empowers you to be your best and to step up and be a leader of your world.
This type of freedom includes the space and encouragement for you to grow into who you’re meant to be in this world.
3) Freedom of Money
The third degree of Freedom comes from being able to develop the financial resources that enable you to do anything and everything you wish as an adult. You have this freedom because you learned how to make, manage and multiply your money wisely.
This freedom includes knowing how to leverage your time, energy and money to make more money. You choose what you do and when you do it. You also recognize that this type of freedom manifests itself in a larger way when what you doincludes helping others.
4) Freedom of Thought
The fourth degree of Freedom comes from developing a deep knowing that the first three degrees of FREEDOM are insignificant without freedom of thought. Freedom of thought means not only recognizing that you have complete control over choosing your thoughts but you also realizing that you have 100% responsibility for all of your thought.
Some people have been locked up in jail or in concentration camps for years at a time came to realize that as long as they were able to control their thoughts, they were free.
Many human beings never experience this freedom. They never realize they are making it all up; that THEY alone have the power to change what’s happening by simply changing the paradigm though which they SEE the world. Most people are slaves to the world they live in rather than becoming masters of their own universes.
5) Freedom from Meaning
The last, and ultimately the most powerful degree of Freedom comes in two parts.
The first part comes from understanding that nothing has meaning except the meaning you give it. In other words, you understand that your entire experience comes from the meaning you give things.
Human beings are meaning-making machines. The problem is that we often ascribe meaning to things, people, events and situations that cause us to have negative, unsupportive emotions. When you begin to realize that the chair you’re sitting in has no meaning and then the car you’re driving in has no meaning, and finally, everything else in the world ultimate has no meaning aside from the meaning you’re giving it, you begin to see how you can simply choose meaning that brings incredible the love, peace and warm fuzzies you desire.
The second part of this freedom comes when you have the ability to make this lack of meaning perfectly OK. This is when you finally begin to smile and wonder why everything is the way it is instead of knowing how things should be. This is when you finally decide that since you’re making it all up anyway, you might as well make it mean something wonderful.
When developing the last three degrees of freedom, you realize that rather than incessantly recycling old, out-dated thoughts, you have a ability to creatively choose new thoughts starting with I AM statements: I am healthy, I am well, I am so darn sexy I can hardly stand it.
Many people have not yet recognized that the drama that defines their lives begins in their minds each day. Each evening you go to bed, close your eyes and go to sleep to rest the skin you’re in. Each morning you have the power, the ability and the FREEDOM to choose which part in the grand play you’re going to assume and how you’re going to participate in that part, i.e., partially or fully.
Each day you have the FREEDOM to get up and choose to be happy, get up and make a difference, move about your world in awe of its beauty, slow down long enough to appreciate what you DO have instead of complain about what you do NOT have.
Each day you have the FREEDOM to breath, smile and touch someone’s life in a profound way. But you only have this FREEDOM if you realize it’s completely up to you.
A very wise person once said, “If I’d known that life was a do-it-yourself project, I’d started on it a long time ago!”
Let this day be more than just another Fourth of July, rather,let it become your INDEPENDENCE Day and celebrate all of YOUR freedoms.
It’s been well established that in order to teach people anything, they must believe the information is relevant to them somehow. Saving is one of those topics.
