The month of July for most American’s conjures up images of loud, flashy fireworks, friendly back yard BBQs and the thrilling sound of our national anthem, “Our country ’tis of these, sweet land of liberty, of thee I sing.” America was built on a solid foundation of freedom for all, with the additional caveat that all men and women were created equal. At least that seemed to be the original idea.
And yet, if you dissect the word liberty, which literally mean ‘free’, and then apply that concept to what we actually have today, you can see that there are millions of Americans who aren’t free at all.
You see, in order for one to be truly free, one must have the information and tools with which to create that freedom and in order to create freedom for oneself, one normally has to have at least a basic understanding of money, personal finances and the primary investment principles it requires to get free. You see, in the paradigm in which we currently function, freedom requires money, and financial freedom, i.e., the state of having more passive income coming into one’s life than the expenses that take money out of one’s life, generally requires learning how to make, manage and multiply one’s financial resources wisely.
In America, as with other countries, learning this critical information currently doesn’t come as a natural right of being born an American, or a Canadian, or a Mexican or a Frenchman, etc. Financial literacy, or better yet, financial intelligence, just isn’t, for some strange reason, something that’s valued as necessary to teach our youth in school. And often where it is taught, it’s budgeting and balancing check books that gets mentioned, not investing in passive income producing assets or thinking like a wealthy person or how to become financially free when you’re young instead of spending 40 plus years in a J.O.B. (just over broke as the saying goes) where you hopefully ‘accumulate’ enough money to ‘retire’ at some point. Why not teach kids the concept of financial ‘utilization’ instead. This is the idea that epitomizes the idea that luck is when preparation and opportunity collide. Gone are the days of a good, stable, secure job (which was boring anyway quite often) and here are the days of creating your own way.
The situation at present is that our children are not, for the most part, learning about money in school and the vast majority of children never learn about money at home. Why? Because their parents don’t understand money either and those that do, for whatever reason, are often uncomfortable talking to their kids about money. And the fact that such a small percentage of people actually understand the ‘language of money’ this exactly why the consumer debt number in America in 2007 reached an astronomical $2.5 trillion dollars. And for those of you who are wondering how many zeros that is, it looks like this: 2,500,000,000,000. According to the Federal Reserve, that’s $8,200 for every man, woman and child that lives in the US according to the Federal Reserve. And this does not include debt secured by real estate! This is happening because people are simply buying what I call Piddlycrap: stuff that either goes down in value once you buy it or has no value once you buy it (coffee may come to mind for some).
But something happens when the numbers get this big. There’s a shift in our ability to see this many zeros and make it real for some reason. It’s one thing to owe someone $1000 but quite another when that debt gets to, let’s say $100,000. When it’s $1000, the idea of adding on another $100 causes most people to at least consider what they are doing. The idea, however, of adding $100 to $100,000 often doesn’t seem like anything to think about at all. It’s a matter of contrast. The bigger the contrast, the smaller the reality. And this is exactly what’s happening when it comes to how many Americans view our government: the numbers are SO big that you just can’t wrap your head around them. It’s kind of like thinking about the Universe and how infinity is actually possible, or not.
So what do we do? Or rather, what can you do? Well, first and foremost, we must start setting a better example for our youth, from mom and dad all the way up to the highest branches of our government. You see, children learn first by example and they learn by example in three primary ways: by what they SEE you doing with money; by what they HEAR you saying about money; and by what they are EXPERIENCING in terms of money in their lives. Bottom line, start watching what you, and others who are in a position of influence with your children, are teaching your children about money in all areas of your life.
Secondly, start talking to your kids about money. It’s no different than sex or drugs. If you don’t talk about, you have no idea what they are learning, or from whom. WE have to get over the idea that money makes us who we are. Money is simply a tool to reach our dreams and an ability to help others and do good in the world. Money doesn’t make you happy, doesn’t make you pretty or sexy or cool or anything. Money does make you more of what you already are however (just something to think about).
How do you bring your kids into the ‘family money conversation?’ Well, let your kids help you with the bills, let them help you pay them online and write checks, balance the checkbook, work on the family budget. Don’t have one? Do one! Take your kids to your family financial planner if you have one, take them to your place of business, talk to them about your paycheck, your investments, your debt even. Let them see that it’s just something we all have to learn about and handle as adults if we’re going to be self-sufficient and free.
Thirdly, you must start to give your kids more practice with money BEFORE they move out and the mistakes cost them dearly, pun intended. College kids are leaving college with huge amounts of debt, even to the point of committing suicide over the debt they accumulate. For the most part, they simply don’t have the maturity or knowledge to handle the credit cards they are tempted with or the high cost of living or competing with their peers in terms of clothes, entertainment, vacations, phones and more.
This practice must start early and you must have a system. My new book, The Ultimate Allowance shows you how to take the money you’re already spending ON your kids and run it THROUGH them instead. Look, it’s like this. If your son or daughter came to you wanting to grow up a major league baseball player but you never gave him or her a ball, a glove, a bat, time to practice, a place to practice or heaven forbit, THE RULES, what’s the changes of him or her being successful and accomplishing the dream? Slim to none. And that’s exactly what we’re doing with our kids as a nation. We MUST start teaching them how to think like, and think differently, about money and creating wealth for themselves and others.
Parents number one job is to prepare their kids to live successfully on their own. If you put these three things in place: 1) set the best example you can; 2) talk to them about everything money; and 3) give them tons of practice while they’re young, you will dramatically increase your success rate of producing resourceful, self-reliant adults out of those youngsters of yours. And I know you want to do this or you wouldn’t have taken time to read this entire article.
Since 2002 I have been dedicated to teaching our youth, and their parents, the basic financial intelligence principles and rules to the money game that we don’t learn in school. I have taught all different races and cultures and genders and ages and everywhere I go, I find the same desire: people just want to know how to save and invest so they can make informed choices and decisions that will help them create a sense of freedom for themselves.
Isn’t that what this country is all about? Isn’t that where we started; a desire to be free? Isn’t that what Martin Luther King, Jr. was willing to give his life for? Isn’t that what we this nation stands for?
Then let’s make financial literacy mandatory in our schools and make financial intelligence a sought after commodity. It’s time to truly make it so everyone has access to the information and tools to create real freedom in their lives. Join me in this mission, won’t you? Visit me at Creativewealthintl.org or give me a call at 805-957-1024.