Few things shock me anymore, when it comes to finances. More than two thirds of Americans live paycheck to paycheck. Only 42% of Canadians can answer 3 simple financial literacy questions. Let’s start teaching our youth that financial planning is essential because you can either learn to control money or money will control you.
In homebuilding, God blessed the work of our hands. Now I mentor and teach others about personal finance. I acquired my wisdom the slow steady way over many years. I have no financial services product to sell or vested interest. But where do you turn to encourage, motivate and inspire your kids before they feel lost, hopeless, or in over their heads?
For me the wisest and richest man who ever lived, King Solomon provides illumination.
In the house of the wise are stores of choice food and oil but a foolish man devours all he has.
The book of Proverbs is filled of principles for life. God wants us to save for a rainy day and to live within our means. Our culture does not guide us well in this area and there is a huge difference between people with a high income and people with high net worth. A difference that everyone including kids must understand!
J.D. Rockefeller, one of the richest men of the more modern era explained it this way. “If you want to become really wealthy, you must have your money work for you. The amount you get paid for your personal effort is relatively small compared with the amount of money you can earn by having your money make money.”
The Wealthy Barber: the Common Sense Guide to Successful Financial Planning by David Chilton applies these two critical concepts. A great personal finance guide that teaches basic concepts using a fictional tale of Roy a small town barber who has become a millionaire.
The Wealthy Barber gives a great overview of the powers of living within your means and the power of compound interest. It’s sold over 2 million copies since it was published in 1989. The Wealthy Barber teaches everyone 7 keys of successful financial planning:
- The Ten Percent Solution: It is a “Pay Yourself first” rule.
“Wealth beyond your wildest dreams is possible if you follow the golden rule: Invest 10% of all you make for long-term growth.”
- Wills, Life Insurance and Responsibility: Estate planning is simple. Yet over half of us do not have a will. The importance of having a will cannot be overstated. Eliminate the fear and the emotion over these issues and take action.
- Planning For Retirement; learn not to rely on the government to take care of you. Learn how to simply and easily take care of yourself.
- Home, Sweet Home: This is an outside the box realistic view on the topic of homeownership. It may not be right for you. “Paying rent is no more throwing your money away than buying food or clothing is. You need shelter. It’s one of the three basic necessities of life. Renting is one way to acquire that shelter and, in some cases, it’s a very intelligent way.”
- Savvy Saving; Real wealth comes from savings not income. Pay yourself first and then live frugally.
- Income Tax: Saving for retirement, done in tax-advantaged ways, costs far less than you’d think.
- Graduation; Learn about emergency funds and how to save for college. “Your biggest asset, by far, is your earning power. “
David Chilton inspires people to take action by demystifying financial planning. The Wealthy Barber teaches everyone 7 keys of financial planning. Consider paying your kids $20, $50 or even $100 for a one-page 25-sentence book report of this resource. It could be the best money you ever invest.
Attitude Ponder if you’re preparing your children for financial independence.
Action Order The Wealthy Barber and be entertained while learning about financial planning.
Question Are you living and teaching wisdom in personal finance?