It’s graduation time of year again and a great time to ask yourself: What would be the best gift you could you give your children when they graduate from college or head out on their own as a young adult?
How about a nice fat nest egg to get them started? We built a $25,000 stock portfolio for each of our children that we gave them when they each graduated from college-debt free! We are just ordinary people that accomplished this and you can do it too!
Click belowto view my You Tube video showing exactly how we did it and you can do it too:
When our children were born and people wanted to get a gift for the baby, we asked family & friends to give us the gift of money that we would invest for them. We felt this was a much wiser choice than some new toy that would soon be worn out or in which they would lose interest.
We set up a very low cost stock index mutual fund (such as the S&P 500 Index Fund) along with a general stock mutual fund for each child and started investing.
When the children were old enough to start working, we wanted to really encourage their frugal living and investing, so we made them an offer they could not refuse!
For every dollar they contributed to their savings, we would match it–so they would double the amount of money they had to invest!
That gave them extra incentive to work hard & save a large percentage of what they were earning or receiving as gifts!
We knew that compound interest is a powerful force that can reap huge benefits and we wanted them to benefit from it!
We set up a spreadsheet that we reviewed with them periodically to demonstrate how much richer they were getting. They became much more enthusiastic about saving their hard earned money after they started to see how their investments were earning them “free money” they didn’t have to earn by working.
On the day each of our children graduated from college, debt free, we switched the entire portfolio into their name!
They EACH had a nest egg of over $25,000 to begin their adult lives at 22 years of age!
That’s a whole lot better than a bunch of smashed up old toys and NO money!
Wouldn’t that be a fabulous graduation present for your children or grandchildren too?
There was a great personal finance article in today’s Wall Street Journal called “When I was Your Age“.
The article features prominent people recalling the best—and worst— financial advice they received as new college graduates.
I believe you can learn almost everything you want to know from people that have already done it successfully!
Included in the survey were David Bach, author of the best-selling FinishRich books, Paula Deen, restaurant owner, author and Food Network host, and Robert Kiyosaki, businessman and author of the best-selling “Rich Dad, Poor Dad” books.
David Bach told how he had learned the value of hard work and purchasing a home while in his 20’s. I agree wholeheartedly with what he said regarding how hard work and saving in your 20s and 30s can determine your future! Amen to that!
Ask all the broke 50 and 60 year old people if they regret not saving and investing when they were young, now that they are running out of time to build their wealth!
Paula Deen learned the value of heeding the advice todo what you love–which was cooking! Look at what a fabulous success she has made of that!
Mary L. Schapiro, chairman of the U.S. Securities and Exchange Commission, said her parents warned her about getting into debt. She listened to them on that point, but regrets not getting into the habit of saving right away. Her advice to grads is to fully understand the implications of debt and what it will take to repay the loan.
Probably my favorite is from Carrie Schwab-Pomerantz, president of the Charles Schwab Foundation. She said the best advice she heard was to live frugally and save for a rainy day. She suggestsliving off 90% of your income and save the other 10%. I would aim for saving more than that!
If there were 8 simple rules you could follow that would help you build a fortune and a satisfying life, would you be interested to learn about them?
Just in time for Summer reading, I recently came across a very inspiring book written by Dwight R Lee and Richard B McKenzie called “Getting Rich in America“.
I highly recommend this book because the focus of the book is on “ordinary people” like you and me, people of modest means and talents and how they “made it” through simple steps taken without sacrificing their quality of life.
I believe wholeheartedly in the idea that if you want to accomplish something, model someone that has already done it. This book uses real life examples of people that have accumulated enough money to be financially independent and tells you how to do that too!
They went from Frugal to Rich!
Here are the 8 Simple Rules featured in the book:
1. Think of America as the Land of Choices
2. Take Compound Interest Seriously
3. Resist Temptation
4. Get a Good Education
5. Get Married and Stay Married
6. Take Care of Yourself
7. Take Prudent Risks
8. Strive for Balance
The quote from Ben Franklin at the front of the book explains it well. “The way to wealth is as plain as the way to market. It depends chiefly on 2 words, industry and frugality: that is neither waste time nor money, but make the best use of both. Without industry and frugality, nothing will do; and with them-everything!”
So basically, that means work hard and be frugal! If you save your money and invest, it will build wealth!
Look at these thought provoking questions the authors pose to help you on your way to getting rich!
Buy it used onAmazon.com or request it for FREE at your local library!
If you could pick up a prescription and get a $25 gift card for FREE at the same time, would you be interested? Would you like drugstores to be fighting for your business and giving you more FREE $25 cards? That’s what happened to me and I’ll tell you how you can do this too!
Recently I saw a sign in the window of a local Rite Aid drugstore that said you could get a FREE $25 gift card for any transferred prescription. The pharmacist told me I just needed to give them the prescription number and location of the pharmacy that had my prescription–and they would handle the rest.
I gave them my info and later picked up my prescription and got my FREE $25 Rite AidGift card! That gives me FREE MONEY, so I can invest that money instead!
Actually, you can transfer up to 4 prescriptions and receive a total of $100 worth of FREE Gift Cards! What a deal!
A week later, out of the blue, I received a $25 check from Walgreens in the mail that I could redeem if I transferred a prescription to them! I believe that was in response to my transferring a prescription away from their store.
Being a person that always loves FREE MONEY, I did just that! I now have $50 worth of FREE gift cards I can use to buy anything I want. The cards do have some restrictions. You cannot use the gift cards to pay for prescriptions or co-pays, stamps, tobacco, and other items.
But–anything else in the store you need including cosmetics, household supplies, even food you get for FREE!
I took the $50 I would have spent on these drugstore items and I invested it in the Vanguard S&P 500 Index Fund–to make myself MORE MONEY!
Use this calculator to see how that $50 will grow over time and how it will help you build wealth! Every little bit helps!
According to recent news reports, the average American family has credit card debt of over $8,000. You will NEVER get wealthy carrying this kind of debt, because your money is going to paying off your past rather than building your future! Let’s create a plan to get rid of it NOW.
Did you know that when you have this type of debt, the magic of compound interest is working against you, rather than for you? Face it, you are making the credit card companies rich–not yourself! That should the incentive to get moving on this!
Start to turn things around right now and gain some financial peace of mind.
First and most importantly, STOP using your credit cards now! Don’t make things any worse than they already are! The next step is to determine what money is coming in and what is going out each month. Where do you stand on both sides of that equation?
Let’s look at the income side of things. How much do you have coming in each month? Add up all salary and wages, child support and any other income you receive.
Then, determine what you have going out each month. Be honest! In order to see exactly what you owe, add up all credit card bills and the all bills paid through your checkbook. Once you you know exactly what is coming in and what is going out, you can develop a spending plan. If you find you are spending more than you have coming in, you are not alone! It is reported that over 40% of American families spend more than they earn each month!
Once you know exactly where you stand, you can focus on the 2 basic sources for the cash you need to pay off debt: spend less of what you currently earn or make more money. We’ll examine the ways to do both of those in Part 2.
When our children were born and people wanted to get a gift for the baby, we asked everyone to give the baby the gift of money that we would invest for them.
We knew the immense power compound interest would have over time and wanted our offspring to take advantage of that fabulous wealth builder. Most people honored our wishes! We set up a stock index mutual fund along with a general stock mutual fund for each child and start investing.
When the children were old enough to start working, we wanted to really encourage their frugal living and investing, so we made them an offer they could not refuse! We said for every dollar they contributed to their savings, we would match it–so they would double the amount of money they had to invest!
We set up a spreadsheet that we reviewed with them periodically to demonstrate how much richer they were getting. They became much more enthusiastic about saving their hard earned money after they started to see how their investments were earning them “free money” they didn’t have to earn by working.
On the day our children graduated from college, we switched the entire portfolio into their name! They EACH had a nest egg of over $25,000 to begin their adult lives at 22 years of age!
That’s a whole lot better than a bunch of smashed up old toys and NO money!
Wouldn’t that be a fabulous graduation present for your child too?
When our children graduated from college, we reflected on what words of wisdom we could share to guide them on their own journey towards financial prosperity. We believe it could be boiled down to these 4 simple steps.
#1. Define how you want your life to look. Be very specific. Do a dream board where you gather pictures from magazines and create a photo montage of your future life. Show the dollar amount you want, the family you aspire to, career goals, homes you will buy, the fabulous travel you intend to do, etc. Now that you know what you are aiming for, you should set concrete financial goals to get there. Set a 1 year, 5 year and long range goal and start working hard and saving to achieve it!
# 2. Pay Yourself First. The minute you land a job, enroll in the company’s 401-K program and contribute the maximum amount. You have 40 years for the money to grow, so allow the power of compound interest to work for you and reap the huge benefits of all those years of growth. Alfred Einstein said compound interest is the 8th wonder of the world! If you are serious about becoming wealthy, you must save a much larger percentage of your income than the average American. Start with saving and investing 20% and go up from there! Do you want to be rich or don’t you? You will not get wealthy by spending all your money on junk. Learn to cook and make your coffee at home. Ok, splurge once in a while.
#3. Only buy appreciating assets, whenever possible– NOT depreciating assets. That means only buy things that will generally go UP in value over time- that is things like houses, stocks, mutual funds, etc. You can buy them now at fire sale prices (unless you think the world is coming to an end.) Do not buy loads of designer clothing and shoes, fancy overpriced cars, etc. You are not Don Trump! Don’t try to live like you are! You have a much better chance of getting wealthy if you defer gratification and wait to buy all those fun toys when you actually have the money to afford them! Now is the time to save and build up your nest egg. We know this is contrary to what most people do! That’s why most people have NO money!
# 4. Take care of your body! What good will wealth do for you if your health is a wreck? Eat less, exercise more, reduce stress. That’s the best investment you will ever make!
