I’m getting old- which can be a good thing or a bad thing. I tend to look at it positively because with age comes experience. I am at the age now where my decisions, and those around me, are starting to bear fruit.
In the world of relationships, those who got married and had kids early are hopefully reaping these choices’ benefits. It feels good to turn 40 years old and have kids that are starting to become adults. Many people are starting families at this age. There are pros and cons to both scenarios, but as long as people are happy and healthy, life is good.
In the world of finance, you will also get to see the fruits of people’s early choices at this age. Many people went to college, others went into the military, and some did neither. We are starting to see a new crop of entrepreneurs using social platforms and content creation to build wealth early in life.
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But which way is the right way? What is the road to wealth that will ensure complete satisfaction for your entire life? Well, I can’t answer that question for you, but in general, becoming financially educated is the way to a fulfilled life.
Before I explain how financial education can lead to your “best life,” let’s take a detour on our road to wealth. There are many off-ramps (phases), and people decide to pull off the road, leaving them disappointed in life. Understanding where these off-ramps are will help you stay focused and avoid getting pulled off the road. By focusing on wealth creation, you can ensure your family’s financial future. It is important to note that this is only the road to wealth, not the road to happiness. That is an entirely separate road that I may talk about at a later date.
“I need a job” Phase. Getting a job is the first phase on the road to wealth. When your parents tell you to get a job, they put you into this phase. During this phase, you will do any work to get paid, usually at a low hourly rate. I started working at McDonald’s at age 16 (in 1997) for $4.25 an hour. Hell, that was more than most states because I was working in California.
Hopefully, during this phase, you realize that working a minimum wage job is not the road to wealth. Some people never learn this lesson and continue to perform these jobs. I am not here to judge anyone, but I am glad I realized that I needed more in life. If you learn to bypass this off-ramp, you will continue to college, the military, or a vocational school.
“I have a career” Phase. Look Mom, I have a career! Now that you have passed the “job” phase, you progress towards the career phase. We all start in our careers thinking that this is the answer to our wealth questions. A career can be a surprisingly good wealth generator; however, young people will need mentorship and guidance early on.
Mentorship is Dead
If I had started investing early in my military career, say the year 1999, I would be a millionaire many times over right now. That is why parents should teach this financial lesson to their children at very early ages.
We must be careful about careers and wealth. They can be traps in disguise. There is the promise of big promotions and high pay, but things may not be as rosy behind the scenes. As we climb the corporate ladder, our time becomes more stressful and hectic. We will start to manage people and projects, and if our lifestyle has become too complicated, we could be trapped.
“I am middle class” Phase. Being middle class is the most dangerous off-ramp on the road to wealth. If there is one pitbull to avoid, this is the one. I wrote an article on it called “Living a Middle-Class Life is Stressful.” If you work for a living, you are not middle class. If you quit working, and all your money stops, you are not middle class.
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The new middle class has passive income investments that pay them at all times, even when they sleep. Some of these assets are dividend-paying stocks, royalties, and real estate. Yes, if your parents were not wealthy (most of us), you started your career with no assets.
The only financial purpose of holding a job is to build enough assets to become financially independent. You may get some other enjoyment from your job, but you will need to buy assets with the money- that’s the top priority.
The trap of believing you are middle class is that instead of buying assets, you can buy liabilities. When you trust in your job, you will start to purchase things that take money from your pocket. My favorite author, Robert Kiyosaki of “Rich Dad Poor Dad” fame, says that assets put money in your pocket and liabilities take money from your pocket.
The middle class will buy huge homes, fancy cars, expensive vacations, etc. All paid for with debt and employment income (the worst kind). Read “Taxes 101: The Three Types of Income” for more. Very few people can see through this debt-fueled lifestyle and decide to continue on the road to wealth.
Print Your Own Money
“Debt-free journey” Phase. The few who decide to avoid the middle-class trap will then have to go on a debt-free journey. America teaches us that working for income and buying liabilities with debt is the only way. However, it is just a way for America to fuel its consumerism agenda. I digress.
Most of us have debt to pay off. We were lied to and now have to repay our financial burden. There are two main ways to pay off debt, and this is where the road will start to diverge. Most people will “earn and save” their way to becoming debt-free. They will continue to work, increase spending awareness, and cut expenses.
The second way to pay down debt is the “learn and expand” method. I can also call this the financial education method because the more you learn, the richer you become. The few people who decide this method will start to build multiple streams of income, read wealth books, and make decisions based on these new teachings.
Cash Flow 101: How Much Money Do You Need For Your Dream Retirement?
The financial education method is easy. The hard part is starting on this path- because we were lied to during the “middle class” phase. The world teaches us that our off-time is our free time and to do whatever we want. If we’re going to binge Netflix for three straight days, that’s our prerogative. We don’t look at learning and reading favorably with this mindset, especially in our valuable free time.
I took the financial education route, and I have loved it. While I have learned about finances, my mind has expanded to new heights. I started with a scarcity mindset- the world was full of a limited amount of money (please read “Scarcity vs. Abundance”). Now I have an abundance mindset- the world has an unlimited amount of money. And all this money is mine for the taking. All I have to do is learn and make decisions based on these teachings.
Financial education’s funny thing is that it compounds (Read the book “The Compound Effect”). Self-education is not like formal education because there is no set path. You are the driver on the road to wealth.
For example, if you read a book on taxes, a book on business, and a book on real estate, you can decide on a route forward from these readings. If you choose to buy real estate, start an Airbnb business, and utilize the tax benefits- you have compounded all this information into one purchase. The simpler term is “connecting the dots.” The compounding effect can happen in all we do in life, and when we connect the dots, it is magical. Your bank account will be a reflection of your financial education.
5 Takeaways from “I Will Teach You to be Rich”
“The Decision” Phase. The last phase on the road is also the most difficult. It is so hard because most people do not know that it exists. Most people stop at the debt-free off-ramp. They decide to live meager, humble lives with nothing exhilarating happening. There is nothing wrong with having a budget and sticking with it for the rest of your life. I’d prefer to live a life of extravagance. However, I know that I have to learn (not earn) my way to this lifestyle.
“The Decision” is to bypass the debt-free off-ramp and continue on the road to wealth. When you have enough money to be comfortable, you still buy a rental property or start a business. It is not about the additional money; it is about putting your learnings into action. That is the ultimate challenge of your mind- to make things appear.
If you have children, I implore you to continue on the road of wealth. America teaches us that our children need to figure everything out by themselves. That is how they become grown-ups. Don’t be fooled by these lairs. They are the same people who are charging $100,000 for a four-year college, giving our children 17% interest rates on credit cards and then paying them $12/hr with a college degree.
Wealth is a Mindset
It is in America’s best interest for us to dump our children to the side of the road. If we work with our children, by buying houses together, starting businesses together, and investing together, corporations lose- we win. If I have a paid-off home and my son and his family move into it, the profiteers lose. They don’t get another house purchase or rental income. It all stays in our family; we build wealth together- we travel on the road to wealth together.
The final decision is up to you. I see the future, and it is not bright for our children unless we stay involved. For our children to take us seriously, having success in business, employment, real estate, and investments- will command their respect. If we stay in our tiny safe bubbles, chances are our children will too. These corporations are not places that are children will want to work at for 20-30 years, as we did. The future holds a lot of uncertainty; the least we can do is be a solid rock- an inexhaustible source of information and assistance. To become this person, we need to become financially educated.
Where will you exist on the road to wealth? Are you happy being middle class, buying liabilities? Will you become debt-free and stay within your budget for the rest of your life? Or will you decide to compound your financial intelligence, build multiple streams of income by learning about investments, business, and real estate? Who do you want to be for your children?
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Disclosure: I am not a financial advisor or money manager, and any knowledge is given as guidance and not direct actionable investment advice. I am an Amazon Affiliate. Please research any investment vehicles that are being considered. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.
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