Money is SymbolicFull Article
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Money is symbolic.
Sure, it’s a store of value and a medium of exchange. But above all, it’s a symbol. It’s how people evaluate if they’re succeeding or failing.
What is a symbol? It’s a visible representation of something that’s invisible.
Think about it—can you see success? Not really. It’s an abstract idea.
But what do you see when you imagine a successful person? Cars, houses, clothes, and zeros in a bank account.
Those are the symbols of success. And make no mistake—money is the central symbol of success.
How do you feel when your bank looks full? Awesome! You get a quick rush, and your step’s just a touch lighter.
But what about when you’re in debt or when you can’t make ends meet? Not so great. You feel stressed and anxious, like you’re not good enough.
That’s because money is a visible representation of your success or failure. It’s a way to keep score.
You see that loaded bank account, and you think “Everything looks good! I’ve really got my act together.”
You see an empty bank account, and you think “What have I been doing? I’ve really messed up my finances.”
Here’s the sticking point—the symbolic nature of money is great for motivation. It’s terrible for guiding decisions.
Why? Because it can easily lead you to making moves that give you the appearance of wealth without being wealthy. You start buying things far beyond your budget to symbolize wealth you don’t actually have. It’s the fast-track to living paycheck-to-paycheck.
But as motivation? That’s where its power lies. Think about that bump you get when you see your net worth climb. Use that feeling as fuel to keep pushing when you hit roadblocks and obstacles.
So what does money mean to you? Is it a scorecard? A way to motivate yourself? Or something else entirely?
How you answer that question will determine whether money is a powerful tool or a dangerous weapon in your life.
So you’re ready to start budgeting. Congratulations! It’s a big step towards building wealth.
If you’re not sure where to start, you’ve come to the right place! Keep reading to discover all the steps you need to build a budget.
Know Your Balance Sheet. Companies maintain and review their “balance sheets” regularly. Balance sheets show assets, liabilities, and equity. Business owners probably wouldn’t be able run their companies successfully for very long without knowing this information and tracking it over time.
You also have a balance sheet, whether you realize it or not. Assets are the things you have, like a car, house, or cash. Liabilities are your debts, like auto loans or outstanding bills you need to pay. Equity is how much of your assets are technically really yours. For example, if you live in a $100,000 house but carry $35,000 on the mortgage, your equity is 65% of the house, or $65,000. 65% of the house is yours and 35% is still owned by the bank.
Pro tip: Why is this important to know? If you’re making a decision to move to a new house, you need to know how much money will be left over from the sale for the new place. Make sure to speak with a representative of your mortgage company and your realtor to get an idea of how much you might have to put towards the new house from the sale of the old one.
Break Everything Down To become efficient at managing your cash flow, start by breaking your spending down into categories. The level of granularity and detail you want to track is up to you. (Note: If you’re just starting out budgeting, don’t get too caught up in the details. For example, for the “Food” category of your budget, you might want to only concern yourself with your total expense for food, not how much you’re spending on macaroni and cheese vs. spaghetti.)
If you typically spend $400 a month on food, that’s important to know. As you get more comfortable with budgeting and watching your dollars, it’s even better to know that half of that $400 is being spent at coffee shops and restaurants. This information may help you eliminate unnecessary expenditures in the next step.
What you spend your money on is ultimately your decision, but lacking knowledge about where it’s spent may lead to murky expectations. Sure, it’s just $10 at the sandwich shop today, but if you spend that 5 days a week on the regular, that expenditure may fade into background noise. You might not realize all those hoagies are the equivalent of your health insurance premium. Try this: Instead of spending $10 on your regular meal, ask yourself if you can find an acceptable alternative for less by switching restaurants.
Once you have a good idea of what you’re spending each month, you’ll need to know exactly how much you make (after taxes) to set realistic goals. This would be your net income, not gross income, since you will pay taxes.
Set Realistic Goals and Readjust. Now that you know what your balance sheet looks like and what your cash flow situation is, you can set realistic goals with your budget. Rank your expenses in order of necessity. At the top of the list would be essential expenses – like rent, utilities, food, and transit. You might not have much control over the rent or your car payment right now, but consider preparing food at home to help save money.
Look for ways you can cut back on utilities, like turning the temperature down a few degrees in the winter or up a few degrees in the summer.
After the essentials would come items like clothes, office supplies, gifts, entertainment, vacation, etc. Rank these in order of importance to you. Consider shopping for clothes at a consignment shop, or checking out a dollar store for bargains on school or office supplies.
Ideally, at the end of the month you should be coming out with money leftover that can be put into an emergency fund. Keep filling your emergency fund until it can cover 3 to 6 months of income.
If you find your budget is too restrictive in one area, you can allocate more to it. (But you’ll need to reduce the money flowing into other areas in the process to keep your bottom line the same.) Ranking expenses will help you determine where you can siphon off money.
Commit To It. Now that you have a realistic budget that contains your essentials, your non-essentials, and your savings goals, stick to it! Building a budget is a process. It may take some time to get the hang of it, but you’ll thank yourself in the long run.
Numbers never lie, and when it comes to statistics on financial literacy, the results are staggering.
In 2020, financial illiteracy cost Americans $415 billion.¹ That’s $1,634 per adult. What difference would $1,600 make for your financial situation?
But what is financial literacy? How do you know if you’re financially literate? It’s much more than simply knowing the contents of your bank account, setting a budget, and checking in a couple times a month. Here’s a simple definition: “Financial literacy is the ability to understand and effectively use various financial skills, including personal financial management, budgeting, and investing.”²
Making responsible financial decisions based on knowledge and research are the foundation of understanding your finances and how to manage them. When it comes to financial literacy, you can’t afford not to be knowledgeable.
So whether you’re a master of your money or your money masters you, anyone can benefit from becoming more financially literate. Here are a few ways you can do just that.
Consider How You Think About Money. Everyone has ideas about financial management. Though we may not realize it, we often learn and absorb financial habits and mentalities about money before we’re even aware of what money is. Our ideas about money are shaped by how we grow up, where we grow up, and how our parents or guardians manage their finances. Regardless of whether you grew up rich, poor, or somewhere in between, checking in with yourself about how you think about money is the first step to becoming financially literate.
Here are a few questions to ask yourself:
- Am I saving anything for the future?
- Is all debt bad?
- Do I use credit cards to pay for most, if not all, of my purchases?
Monitor Your Spending Habits. This part of the process can be painful if you’re not used to tracking where your money goes. There can be a certain level of shame associated with spending habits, especially if you’ve collected some debt. But it’s important to understand that money is an intensely personal subject, and that if you’re working to improve your financial literacy, there is no reason to feel ashamed!
Taking a long, hard look at your spending habits is a vital step toward controlling your finances. Becoming aware of how you spend, how much you spend, and what you spend your money on will help you understand your weaknesses, your strengths, and what you need to change. Categorizing your budget into things you need, things you want, and things you have to save up for is a great place to start.
Commit to a Lifestyle of Learning. Becoming financially literate doesn’t happen overnight, so don’t feel overwhelmed if you’re just starting to make some changes. There isn’t one book, one website, or one seminar you can attend that will give you all the keys to financial literacy. Instead, think of it as a lifestyle change. Similar to transforming unhealthy eating habits into healthy ones, becoming financially literate happens over time. As you learn more, tweak parts of your financial routine that aren’t working for you, and gain more experience managing your money, you’ll improve your financial literacy. Commit to learning how to handle your finances, and continuously look for ways you can educate yourself and grow. It’s a lifelong process!
¹ “Survey Results: Deficits in Financial Literacy Cost Americans $415 Billion in 2020,” PR Newswire, Jan 7, 2021, https://www.prnewswire.com/news-releases/survey-results-deficits-in-financial-literacy-cost-americans-415-billion-in-2020-301201971.html
² “Financial Literacy,” Jason Fernando, Investopedia, Sep 10, 2021, https://www.investopedia.com/terms/f/financial-literacy.asp
Debt is an unfortunate reality for most people in America.
The average household owes $6,006 in credit card debt alone and the total amount of outstanding consumer debt in the US totals over $15.24 trillion.¹ It’s linked to fatigue, anxiety, and depression.² It’s a burden, both emotionally and financially.
So it’s completely understandable that people want to get rid of their debt, no matter the cost.
But the story doesn’t end when you pay off your last credit card. In fact, it’s only the beginning.
Sure, it feels great to be debt-free. You no longer have to worry about making minimum payments or being late on a payment. You can finally start saving for your future and taking care of yourself. But being debt-free doesn’t mean you’re “free.” It means you’re ready to start building wealth, and chasing true financial independence.
When you’re debt-free, it feels like a weight has been lifted off your shoulders. You can finally breathe easy and start planning for your future. But what people don’t realize is that being debt-free is only the beginning.
For example, when you first beat debt, are you instantly prepared to cover emergencies? Most likely not. The bulk of your financial power has most likely gone towards eliminating debt, not creating an emergency fund. And that means you’re still vulnerable to more debt in the future—without cash to cover expenses, you’ll need credit.
The same is likely true for retirement. Simply eliminating debt doesn’t mean you’ll retire wealthy. It certainly positions you to retire wealthy. But you must start saving, leveraging the power of compound interest, and more to make your dreams a reality.
But now that you’ve conquered debt, that’s exactly what you can do! You now have the cash flow needed to start saving for your future. You can finally take control of your money and make it work for you, instead of the other way around.
So don’t think of being debt-free as the finish line. It’s not. It’s simply the starting point on your journey to financial independence. From here, the sky’s the limit.
¹ “2021 American Household Credit Card Debt Study,” Erin El Issa, Nerdwallet, Jan 11, 2022, https://www.nerdwallet.com/blog/average-credit-card-debt-household/ ² “Data Shows Strong Link Between Financial Wellness and Mental Health,” Enrich, Mar 24, 2021, https://www.enrich.org/blog/data-shows-strong-link-between-financial-wellness-and-mental-health
“For to every one who has will more be given, and he will have abundance; but from him who has not, even what he has will be taken away.” — Matthew 25:29, RSV.
Put another way—the rich get richer, the poor get poorer.
This is the Matthew Effect, named for the biblical passage above. It’s a phenomenon that’s been proven time and time again. Simply put, advantages beget more advantages, and disadvantages beget more disadvantages.
Here’s an example…
Two kids play pickup basketball with some friends. Neither has played before. Athletically, they’re similar with a key difference—one can jump just slightly higher than the other.
So what happens? The better jumper gets slightly more points than the other kid. Not a big deal, right?
Wrong. He gets the ball more than his friend. That means he gets more time dribbling, shooting, and jumping. At first, it’s not much. But over the next few weeks, he’s significantly more confident than his buddy. And it all started with a slight advantage.
The takeaway? Advantages are force multipliers. They snowball.
That can seem discouraging. After all, it looks like other people have far more advantages than we do.
But above all, it should be encouraging. You have advantages. They may be small. You may not even recognize them. But they’re there. You just need to start using them.
It also means that the opportunities you pursue will dictate your outcomes. Make no mistake—following a system, model, and path that gives you the advantage will transform your future.
So what are you waiting for? Start chasing advantages!
People often think of money as a source of stress and anxiety.
And while it’s true that money problems can cause a lot of stress, did you know that financial instability can also lead to health problems?
The research is clear—money woes cause health problems.
Negative wealth shocks (losing 75% of your wealth or more) increase mortality risk over 20 years by 50%.¹
The impact grows more pronounced with age. A Yale study tracked older people recovering from heart attacks. They discovered that heart attack survivors with financial problems were 60% more likely to die within 6 months of leaving the hospital.²
Researchers don’t understand the causal relationship between finances and mortality, but here are a few educated guesses…
Losing money is stressful. And stress has been linked to everything from heart disease to cancer.
Losing money reduces access to medical care. Quality care slips out of financial reach. Even little things like transportation to appointments can become unaffordable.
Losing money can cause a low-quality diet. A combination of stress and living in low-income areas make junk food far more convenient and appealing.
The takeaway? Money problems take a toll on your health. That’s why financial stability should be a top priority for everyone. If you’re struggling to make ends meet, don’t despair. There are steps you can take to get your finances in order. And when you do, you’ll be on your way to better health, too!
¹ “Financial Ruin Can Be Hazardous To Your Health,” Rob Stein, NPR, April 3, 2018, https://www.npr.org/sections/health-shots/2018/04/03/598881797/financial-ruin-can-be-hazardous-to-your-health
² “In Older Adults, Money Problems Linked to Higher Risk of Death Following Heart Attack,” Ashley P. Taylor, Yale School of Medicine, Feb 23, 2022, https://medicine.yale.edu/news-article/in-older-adults-money-problems-linked-to-higher-risk-of-death-following-heart-attack-study/
³ “Stress Can’t Actually Kill You — but How You Deal (or Don’t) Matters,” Lauren Sharkey, Healthline, Apr 28, 2020, https://www.healthline.com/health/mental-health/can-stress-kill-you
The most dangerous money mistakes are the ones you don’t notice.
Are buying cars you can’t afford and living paycheck-to-paycheck dangerous? Of course! But they’re obvious. Hard to miss. They’re like a voice yelling into a megaphone “Hey! Something’s not right.”
But what about money mistakes that aren’t so obvious? Or even worse, money mistakes disguised as money wisdom?
Those may not devastate your bank account in one swoop. But they often go unaddressed. And overtime, they add up.
So here are money mistakes you might not have noticed.
Penny pinching. Sure, it sounds like a great idea in theory. But when you’re constantly scrimping and saving, it’s tough to enjoy life. What’s the point of working so hard if you can’t even enjoy your money?
Plus, penny pinching can stop you from taking calculated risks that could save your money from stagnation.
So instead of penny pinching, try moderation instead. You may find yourself far more inspired to budget and save then if you commit to complete frugality.
Under and over filling your emergency fund. A lot of people make the mistake of not having an emergency fund at all. It leaves them vulnerable to unexpected expenses and financial emergencies.
When you have too much money in your emergency fund, it’s tough to make any real progress on your long-term financial goals. A good chunk of your net worth gets sunk into money that’s not growing.
The solution? Save up 3 to 6 months of income in an easily accessible account, no more. Use that money to cover emergencies. If it runs low, refill it.
Once your emergency fund is full stocked, devote your income to building wealth.
Leaving goals undefined. It’s tough to achieve a goal you don’t have. And it’s even tougher to achieve a goal that’s fuzzy and undefined.
That uncertainty makes it easy to fudge good financial habits. You don’t see how lapses impact your big picture because you don’t have a big picture,
So when it comes to your money, be specific. Write out your goals and make sure they’re measurable. That way, you can track your progress and ensure you’re on the right track.
Be on the lookout for these dangerous money mistakes. They may seem innocuous, but they can add up over time and stop you from reaching your financial goals. Stay vigilant and steer clear of these traps!
Worried about money? Tell someone.
And that doesn’t mean anxious chit-chat or throwaway lines about how money’s tight. Those are attempts at starting a conversation, hoping that the other person notices how you feel.
What you need is to sit down and talk with someone you trust. Someone you can be honest with. Someone who will listen without judgment.
When it comes to money, most of us are our own worst critic. We’re ashamed to admit that we don’t have enough, or that we’re struggling to make ends meet.
And shame loves silence. That’s because silence keeps you confused. It allows negative thoughts, often unfounded, to bounce around and fester and grow.
But something amazing happens when you talk to someone who listens—as the words leave your mouth, your perspective changes.
Maybe you feel relief. Maybe you feel re-energized. Maybe you see your fears in a different light.
Once you’ve actually brought your worries into the open, you’ll find the clarity you need to make a plan. And that plan further soothes your worries.
Make no mistake—talking honestly is hard. It demands vulnerability. That doesn’t happen with everyone. Only a few people will give you the sense of safety and comfort you need to speak openly.
But once you find those people, they become your rocks. They empower you to conquer your fear. They help you calm your worries and achieve financial peace of mind. And it all starts with talking.
If you need a space to talk about your finances, judgment free, contact me. I’m more than happy to hear your story and help you make a plan for a better future.
Are you one of those people who always seem to be putting off tasks?
It makes sense. Life is hectic. Schedules are full. Sometimes, it seems like you hardly have a second to brush your teeth or have a real conversation. And so important decisions get pushed further and further into the future.
That’s fine in some cases. Do you need to decide how to organize your garage right now, at this very moment? No.
But with your finances, procrastination can cause disaster. Why? Because time is the secret ingredient for building wealth. The sooner you start saving, the greater your money’s growth potential. Likewise, the sooner you get your debt under control, the more manageable it becomes.
And with your money, the stakes couldn’t be higher. After all, it’s your future prosperity and well-being that’s at stake. Procrastination is downright dangerous.
That urgency, however, doesn’t make it easier to start saving. In fact, you may have noticed that finances suffer more from procrastination than anything else.
There’s a very good reason for that. Procrastination is driven, above all else, by perfectionism. Failing feels awful, especially when you know the stakes are high. Your brain sees the discomfort of trying to master your finances and failing, and decides that it would feel safer to not try at all.
It’s a critical miscalculation. Attempting to master your finances at least moves you closer to your goals. Procrastinating doesn’t.
Think of it like this—50% success is infinitely better than 0% success.
The key to beating procrastinating, then, is to conquer the perfectionist mindset and fear of failure. It’s no small feat. Those habits of mind are often deeply ingrained. They won’t vanish overnight. But there are some simple steps you can take, like…
Break big goals down into tiny steps. This relieves the overwhelm that many feel when facing important tasks. As you knock out those small steps, you’ll feel empowered to keep moving forward.
Don’t go it alone. Procrastination thrives in isolation. Seek out a friend, loved one, or co-worker to hold you accountable and share the load—even if it’s just a weekly check-in to see how each other are doing.
Work in short, uninterrupted bursts. Set a timer. Put down the phone. Work. After about 15 minutes, you’ll notice something strange happening. Time starts to either speed up or slow down. Distracting thoughts vanish. The lines between you, your focus, and the task at hand start to evaporate. You feel awesome. This is called a flow state, and it’s the key to productivity. Make it your friend, and you’ll notice that procrastination becomes rarer and rarer.
Now that you know the cause of procrastination, try these tips for yourself. Set a 30 minute timer. Then, break your finances into tiny action steps like checking your bank account, automating saving, and budgeting. Work on each item in a quick burst until you’ve made some progress. Then, talk to a friend about your results!
Just like that, you’ve made serious headway towards beating procrastination and building wealth. Look at you go!
Financial literacy starts at home. And that’s why the crusade to disrupt the financial industry must begin with families.
Parents influence their kids more than anyone or anything else. It’s a fact. Your response to conflict, your career, your relationships, your hobbies, your values, your politics, the core of who you are is all shaped by your parents.
The same is true of your attitude towards money.
Research has shown that most people start learning about money by age 3. By age 7, their attitudes about money are set.
What do you remember between ages 3 and 7? Probably very little on the conscious level. But deep down, you remember almost everything.
You remember if your parents had frugal or flippant attitudes about money.
You remember if your parents fought about money.
You remember if you persuading your parents to buy things… or if your words fell on deaf ears.
You feel all those things when money comes up in conversation. When your stress vanishes after buying a new toy. Or your heart sinks when you check your bank account. Or you get a head-rush of discomfort when your coworker starts talking about their paycheck size.
Here’s another fact—no one is happy with the financial education they got growing up. 83% of parents wish they had learned more about money when they were kids. They’re eager to avoid the mistakes of their parents. But there’s just one problem…
Do they actually know how money works?
It’s unlikely. A 2020 global survey revealed that only 15% of young adults were financially literate.1 Translation—85% of parents, through no fault of their own, are poised to repeat their parents’ mistakes.
That’s why reaching families with financial education is foundational to our mission. If parents get a financial education, their children are far better positioned to build wealth. And if families can learn how money works together, they can remove emotional obstacles and grow closer together, as well.
That’s why financial education is central to my mission. Because once families know how money works, they’re far less likely to be taken advantage of. They start making decisions that favor their futures, not someone else’s.
And when that happens to enough families, the financial industry will never be the same.
¹ “Why it’s so hard to talk about money, according to a financial coach who does it every day,” Megan DeMatteo, CNBC Select, Jan 24 2022 https://www.cnbc.com/select/why-its-hard-to-talk-about-money/
² “The New Social Contract: Young adults reinventing life, work, and retirement,” AEGON, 2020 https://www.aegon.com/contentassets/793cbad3cfa442d8b5ff8f7174cf330e/young-adult-report-2020.pdf
Budgeting is essential. But what if you don’t know where to start?
Whether you’re new to the world of budgets or you just want some help, this article will get you started on the right foot. There’s no one way that works for everyone, but these different methods can give you an idea of where to begin.
Method 1: The old fashion way. First, write down your total monthly take home pay. Next, break down your monthly spending into categories and write down how much you spend on each. Add those numbers together. Then, subtract that number from your take home pay.
The advantage of this method is that it’s rewarding. You get to see your budget grow from the ground up. It connects you to your money like few other projects will.
It can, however, be frustrating. You’ll run into snags, miscalculations, and old fashion human error. And that can nip your budget in the bud.
Method 2: Pre-made spreadsheets. This is an easy way to create a customized budget. There are countless templates from Google Drive, Microsoft Office, the Federal Trade Commission, Nerdwallet, and more!
Unfortunately, they still require some legwork. You may need to customize your budget to your specific needs. And they don’t sync with your bank account, meaning you’ll need to manually input your monthly spending.
Method 3: Budget apps. They come in a variety of different flavors, but they all serve a common purpose—make budgeting as simple as possible.
Typically, these apps handle the categorizing and all the math. You simple enter your monthly income, log your spending into categories, and let the app work its magic.
Not all budgeting apps are the same. Some require you to manually enter your spending, while others sync with your bank accounts. Some are free. Some cost money.
Here are a few of the most popular budgeting apps to investigate…
Mint (most popular)
YNAB (You Need a Budget) (Syncs with accounts, cost $84/year)
PocketGuard (Designed for overspenders)
Honeydue (Designed for couples)
There’s not one particular way to begin budgeting. It all depends on your personal needs and what you’re comfortable with.
With so many options, you should be able to find the perfect method for you.
What do you think? Do you have a simple budget? How did you start it?
Are you one of those people who assumes that you’ll never be wealthy?
It’s a common mindset, and it keeps many from reaching their financial goals. But the truth is, anyone can create wealth. You don’t have to be born into money or have some special talent. It all comes down to making a commitment to start building your fortune today.
So why do so many people put off creating wealth until later in life? There are many reasons, but chief among them is fear.
What if, instead of building wealth, you save your money in the wrong place and lose everything?
What if you can’t access money when you need it?
What if I confirm this deep seated suspicion that I don’t know what I’m doing?
But here’s the truth— you’re better positioned to start building wealth today than you ever will again. That’s because your money has more time to grow and compound today than it will in the future.
That’s especially true in your 20s and 30s. But it’s also true if you’re 45 or 55. The best time to build wealth is right now, this very moment.
So what can you do? How can you leverage this moment to start building wealth? Here are a few simple financial concepts you can use right away.
Create an emergency fund. I know it seems counterintuitive, especially if your credit is in shambles or you have many other debts to pay off. But the truth is, building an emergency fund is one of the best ways to begin building wealth, because it gives you a margin of safety. If you have money saved for a rainy day, you won’t have to turn to expensive credit cards or high interest loans when life throws you a curveball. Instead, you can take care of things with your own savings and move on.
Automate saving right now. The best way to start building wealth is to put something away every month. Forget about how much you’re putting away or your interest rate. For now, just put something away, even if it’s just $5. You can work with a financial professional to boost those numbers later on. The important thing is to start now.
If you want to learn more about how to start building wealth today, let’s chat. I’d love to help you set some goals and create a plan for getting there. We all deserve financial security, regardless of our age or income level. So let’s find out how we can get started today.
You’ve probably heard the phrase “knowledge is power” before. In fact, you may have even said it yourself from time to time.
And it’s true. Knowledge is power because it shows you how to act. The more informed your actions, the more likely they are to be fruitful and effective.
Here’s another quote you’ve probably heard and said a few times—“Know thyself.”
Why? Because there’s no greater power than power over yourself. The more you know yourself, the more able you’ll be to shape your actions, your habits, and your destiny.
This couldn’t be more relevant when it comes to financial matters. The more you know about your financial habits and tendencies, the better equipped you’ll be to control your financial future.
Here are some ways to know thy financial self.
Notice your emotions.
Like any other part of your personality, emotions can affect money. They’re especially important because they can cause you to act in ways that are counterproductive financially.
For example, have you ever felt anxious about checking your bank account?
Or felt a craving to blow money to destress?
Or swelled with pride when you see how much you’ve saved?
Those are all emotions, and they’re all related to money.
So the next time you’re spending money, or checking your bank account, or pinching pennies, take a moment. Breath. Notice how you’re feeling. Those emotions can give you valuable information that will help you make better financial decisions in the future.
Notice your thoughts. Feelings almost always lead to thoughts. For instance, anxiety about looking at your bank account could lead to thoughts like this…
“Can I afford that? Oh, I bet I can’t. I WAY overspent the other day at… whatever, I never have enough money. I keep meaning to spend less, but I just can’t stop myself. Why do I even bother?”
See what happened? A feeling of anxiety led to a negative thought—that you can’t control your finances.
So what do you think about money? And that doesn’t mean the “opinions” about money that you share when you’re chatting with friends. It means the thoughts that flow through your mind when ever you encounter money in daily life.
Take a few moments right now and notice those thoughts. Are they positive? Are they negative? Are they just neutral?
Notice your actions. Just like feelings almost always lead to thoughts, so do thoughts almost always lead to action.
Those actions might be to ignore, or repress, or get angry, or give in. But one way or another, thoughts will result in actions.
This is where budgeting helps. It’s like creating a journal of your actions, which are a window into your thoughts, your feelings, and who you are.
Notice lots of stress spending, snack buying, or binge shopping? That can reveal a facet of your financial self—maybe you think that spending will relieve feelings of stress and anxiety.
Or maybe you notice lots of thrifting and penny-pinching. That could reveal either a resourcefulness in hard times, or worry about going without.
Or maybe you notice wild, untamed spending. Perhaps this shows that you don’t prioritize money, and think of it as a tool to make you feel good.
The more you know about your financial self, the better equipped you’ll be to control your finances. You’ll see habits that you need to curb, and habits you need to cultivate.
Simple advice, but it goes a long way. Knowledge is power!
Money comes from solving problems.
Think about any business. It could be a lemonade stand. It could be Amazon.
Each of those businesses solves a problem.
The lemonade stand solves the problem of feeling dehydrated on a hot summer day. How? With a refreshing mix of sugar, citrus, and water. One sip, and you’re a new person. It’s a feeling people will pay big money to achieve.
Amazon solved a problem people didn’t even know existed—the inconvenience of shopping in stores. It turns out that driving from location to location is a time consuming hassle. Amazon eliminated that problem entirely with an all-encompassing online marketplace. And they’ve been richly rewarded—just look at Jeff Bezos’s net worth!
Your current job is likely solving a problem for your boss. You have skills that your boss needs to their business work, but that they don’t have the time to develop or apply. And in return for solving that problem for 40 hours per week, they give you a salary.
The takeaway? Don’t just develop skills—identify problems. Once you see obstacles, you can leverage your skills to overcome them. That’s where money comes from.
Sick and tired of borrowing money from financial institutions? Well, no longer! You can now borrow money directly from your peers.
That’s right—with the magic of the internet, you can be in debt to faceless strangers instead of faceless institutions.
One moment while I get my tongue out of my cheek…
But seriously, peer-to-peer lending—or P2P—is exploding. It’s grown from a $3.5 billion market in 2013 to a $67.93 billion market in 2019.¹
Why? Because P2P lending seems like a decentralized alternative to traditional banks and credit unions.
Here’s how it works…
P2P lending platforms serve as a meeting point for borrowers and lenders.
Lenders give the platform cash that gets loaned out at interest.
Borrowers apply for loans to cover a variety of expenses.
Lenders earn money as borrowers pay back their debt.
No middlemen. Just straightforward lending and borrowing.
Think of it as crowdfunding, but for debt.
And make no mistake—there’s a P2P lending platform for every loan type under the sun, including…
• Wedding loans • Car loans • Business loans • Consolidation loans
But here’s the catch—debt is debt.
The IRS. A bookie. A banker. Your neighbor. It doesn’t matter who you owe (unless they’re criminals). What matters is how much of your cash flow is being consumed by debt.
Can P2P lending platforms offer competitive interest rates? Sure! But they can also offer ridiculous interest rates, just like everyone else.
Can P2P lending platforms offer lenders opportunities to earn compound interest? Of course! But they also come with risks.
In other words, P2P lending is not a revolution in the financial system. In fact, two leading P2P platforms have actually become banks.²
Rather, they’re simply options for borrowing and lending to consider with your financial professional.
¹ “19 P2P Investing Statistics You Need to Know for 2021,” Swaper, Feb 22, 2021 https://swaper.com/blog/p2p-investing-statistics/
² “Peer-to-peer lending’s demise is cautionary tale,” Liam Proud, Reuters, Dec 13, 2021 https://www.reuters.com/markets/asia/peer-to-peer-lendings-demise-is-cautionary-tale-2021-12-13/
You walk out of the office like a brand new person.
That’s because you’ve done it—you’re going to be earning a lot more money with that raise. The first thing that pops in your head? All the fancy new things you can afford.
Dates. Your apartment. Vacation. They’re all going to be better now that you’ve got that extra money coming in.
And to be fair, all of those things CAN get substantially fancier after your income increases.
But one thing may not change—you still might end up living paycheck to paycheck.
Why? Because your lifestyle became more extravagant as your income increased. Instead of using the boost in cash flow to build wealth, it all went to new toys.
This phenomenon is called “lifestyle inflation”. It’s why you might know people who earn plenty of money and have nice houses, but still seem to struggle with their finances. The greater the income, the higher the stress. As Biggie put it, “Mo’ Money, Mo’ Problems.”
The takeaway? The next time you get a raise, do nothing. Act like nothing has changed. Go celebrate at your favorite restaurant. Keep saving for your new treat. But you’ll thank yourself if you devote the lion’s share of your new income to either reducing debt or building wealth.
Rest assured, there will be plenty of time to enjoy the fruits of your labor in the future. But for now, keep your eyes on the most important prize—building wealth for you and your family’s future.
Without careful planning, your money will never go the distance for your retirement.
Well, unless you win the powerball or stumble upon buried treasure.
The simple fact is that retirement can last a long, long time and often be expensive. According to the Federal Reserve, the average American can expect a retirement of almost 20 years, requiring $1.2 million.¹
How long would it take you to save $1.2 million? Even if you could stash away your entire paycheck, it would likely take over a decade. Factor in the daily costs of living, and decades may become centuries.
Unless, of course, you leverage two simple strategies…
Strategy One: Maximize the power of compound interest.
Strategy Two: Start saving today.
These are time-proven strategies that anyone can leverage. And they can mean the difference between your savings running out of steam or lasting as long as you do.
Let’s start with strategy one: Maximize the power of compound interest…
Compound interest can supercharge your savings. Instead of taking centuries, you have the potential to reach your retirement goals just in time!
That’s because compounding unleashes a virtuous cycle. The money you save grows on its own over time.
But here’s where the magic happens—the more money you have compounding, the greater its growth potential becomes. Even a fraction of your paycheck can eventually compound into the wealth you may need for retirement.
Think of it like changing gears on a bike. Savings alone is first gear—good enough for going down hills or casual jaunts through the neighborhood.
But for reaching greater goals, you need more power. Compound interest is those extra gears—it’s an advantage that can radically improve your performance.
That leads straight into the next strategy: Start saving today.
The longer your money compounds, the greater potential it has for growth. To prove this, let’s crunch the numbers…
Let’s say you can save $500 per month. You find an account that compounds 10% annually.
After 20 years, you’ll have saved $120,000 and grown an additional $223,650 for a grand total of $343,650. Not bad!
But what if you wait another 11 years? Your money will more than triple—you’ll have $1,091,660!
The takeaway? A few years could be the difference between reaching your retirement goals and coming up short. The sooner you start, the greater potential you have to get where you want to go.
No more sporadic saving when you feel the panic. No more burying your head in the sand because you don’t know what the future holds. No more fear that your finances won’t cross the finish line.
These simple strategies can help you go the distance and retire with confidence. Contact me if you want to learn more about building wealth!
¹ “Retirement costs: Estimating what it costs to retire comfortably in every state,” Samuel Stebbins, USA Today, Feb 11, 2021, https://www.usatoday.com/story/money/2021/02/11/retirement-costs-comfortable-in-every-state-life-expectancy/115432956/
Wealth, simply put, is the stockpile of resources you have at your disposal.
The rarer the resource, the “wealthier” you are.
On a surface level, that definition conforms to the common stereotypes of wealth. Can we all agree that a stacked bank account is a rare and precious resource?
But dig a little deeper, and you’ll find that wealth takes many shapes and forms.
Your knack for finding the right word at the right time?
Your secret talent for creating with your hands?
Your indestructible support network that’s there for you, no matter what?
Those are all resources. Those are all rare. Those are all wealth. They just don’t have a dollar value… yet.
To be fair, you shouldn’t monetize all of your assets, especially if those assets are people. Leveraging your network for money is something that must be done with the utmost care and respect, if at all.
But the fact remains that you likely possess an abundance of resources that could be converted into increased cash flow. Your talents, your ability, and your time are all precious assets that have the potential to boost your income.
The takeaway? When you break it down, you’re wealthier than you may think. The real question is, how will you monetize the resources you’ve been given?
Automating your finances can take the pain out of wealth-building behavior.
You know how it goes. The thought flashes through your mind—”I need to start saving money!”
And then… well, that’s it. You read a few articles on saving and try to spend less, but after a week or two your mind has moved on.
Why? Because all forms of positive change are energy intensive, at least at first. And your brain, smart as it is, likes conserving energy.
So to jump-start saving, you need to take several one time actions that are borderline thoughtless.
Enter automation. It’s a small step with massive return potential.
It’s simple… • Log in to your online banking account • Set up a deposit • Choose to make the deposit recurring instead of one time
Like that, you’ve set the stage for dozens of wealth-building actions well into the future.
And what did it take? A few taps over a few minutes.
So what are you waiting for? Automate your savings right now. I’ll wait! Even if it’s $5 per month, it’s a step in the right direction—to build wealth for your future!
It’s official—Americans aren’t going back to work.
Even though there were 10 million job openings in June of 2021.¹
If you’ve been out and about, you’ve seen firsthand that jobs aren’t getting filled.
You may have noticed the signs at your local grocery store. Or the longer wait at your favorite restaurant. Or slower service from businesses you depend on.
They all stem from the same source. Americans aren’t rushing back to work.
But why? The COVID-19 pandemic caused mass unemployment and havoc for millions of American families. Wouldn’t they want to start earning money again, ASAP?
It’s not the unemployment benefits holding them back. For many, those dried up months ago, and the numbers still haven’t budged.²
And again, it’s not that there aren’t jobs. There are millions of opportunities out there!
Here’s an idea—many people have woken up to the fact that most jobs suck.
Most jobs leave you completely at the mercy of your boss. If they mismanage the business, your job’s in danger. If you want a bigger bonus, your job’s in danger. If another pandemic breaks out, your job’s in danger.
They give you no control over your hours, your income, your location, or your future.
Who would want to go back to that?
Instead, Americans are looking for a better opportunity. They want control of their future, their wealth, and their hours. They want to replace the insecurity of a 9 to 5 with more reliable sources of income.
If they see an opportunity that checks those boxes, they’ll be willing to re-enter the workforce.
Americans are looking for a better path. The million dollar question is, who will provide it for them?
¹ “Many Americans aren’t going back to work, but it’s not for the reason you might expect,” Paul Brandus, MarketWatch, Aug 14, 2021, https://www.marketwatch.com/story/many-americans-arent-going-back-to-work-but-its-not-for-the-reason-you-might-expect-11628772985
² “What states are ending federal unemployment benefits early? See who has cut the extra $300 a week,” Charisse Jones, USA Today, Jul 1, 2021, https://www.usatoday.com/story/money/2021/07/01/unemployment-benefits-covid-federal-aid-ending-early-many-states/7815341002/