Have you ever wondered how you will accumulate your first million dollars in net worth? Do you ever wonder what Billionaires like Oprah Winfrey, Bill Gates, Warren Buffet or even new-rich folks like Paris Hilton or Kim Kardashian have in common? As of this last week, I think I know. Not only that, I think I can figure out how to teach it to anyone.
The Recession is what started it all for me. Major companies were shaken up, and billions of wealth lost. Households were prosperous only a few years before, but suddenly faced homelessness. Since then low salaries, student loans and increasing cost of living have pushed down our discretionary income. New grads can barely make it in jobs that supported luxurious lifestyles just a ten years ago.
When I Started To Doubt
Years before I began this site, I figured out that the advice given to young adults these days about money is wrong, insufficient, or very poorly expressed. It’s the same stuff that what was said 10 years ago, 20 years ago, and even 30 years ago. This is in spite of the obvious fact that a lot has changed since then in the world of money. Our most recognized personal finance “gurus” have been in business for that same period and were therefore still saying the same things to millions of their followers. Is it any surprise that most people still struggle financially?
I also became skeptical of personal finance advice on television, radio, magazines and other media. Two thirds of American adults are over 40, so most of the content is meant to be relevant to them. As the economy ages, this will only get worse. Very rarely do TV or Radio shows encourage people to increase their earnings, and it usually requires giving up your weekends to a part-time job, or paying thousands for another college degree. Whether we like it or not, the mission of media companies to sustain an audience for advertisers results in very little educational value.
Many Certified Public Accountants and Financial Advisors are also saying the same things as they said 30 years ago and I can’t fault them. We are trained on how to make more money with money — how the initial investment will be earned is beyond our scope. If you Google the terms “Student Loan CPA” today, you will only find me. It appears that the most respected financial profession (CPAs) has not yet recognized student loans as a major topic of discussion. There are many books written by my peers about retirement accounts, investing, purchasing homes etc but pretty much nothing about the largest debt being carried by a generation of people. Why might this be? I expect it’s because the most profitable clients for the finance profession are aged 41 to 60 – except for the Mark Zuckerberg’s of the world.
How The Journey Began
In the midst of all this chaos, I developed a thesis of sorts. I felt that there had to be one framework that a young person can use to build a positive net worth (from negative), while maximizing satisfaction along the way.
Such a framework is required to show young people graduating college with student loans and/or earning low wages how to make something out of nothing, continue to make more over time, and not sacrifice their sanity in the process. The framework should be specifically tailored to people currently in their teens through their late thirties – i.e. it might NOT work for older people. A framework is important because it will serve as a “bible” or “constitution”, answering all financial questions, while prioritizing financial issues such as investing, taxes, salaries, savings-strategies, etc.
I believed in 2009 that I was uniquely positioned to research this topic. More than my education or CPA license, I just thought it would be fun. I also knew that it be multidisciplinary and keep me busy for a very long time. Since I couldn’t spend much money on leisure, I needed a bottomless pit to jump into which would be free or low-cost. I began researching this almost daily from late 2009. Since then I have read all sorts of books, magazines, blogs, etc with this purpose in mind. On Monday June 11, 2012 I had a major breakthrough.
I believe that I have found out ONE concept that encompasses all the things that the wealthiest people have in common. I cannot share this information right now because I haven’t yet figured out how to teach this concept. It is a well known concept in the financial world, but I don’t think it has ever been applied to personal financial planning outside the realm of investment management. I hope to develop it further to answer questions about how we should earn, spend, save, and invest money. You will of course see bits of it on this blog, and if you take a good look at my financial principles, you might start to get a sense of it.
I could be wrong and my ideas be completely useless – but that’s a risk I can accept. I know that along the way we will all learn something useful from this blog, so I can’t lose. As I write this teaser, I know that all of you will not believe my ambitious claims, and that is okay. I know it sounds too good to be true. My main reason for writing this is to express this undertaking out loud, and ask for your help.
What do you recommend for me to read, watch, or listen to as I go forward? (Please comment with books, blogs, magazines, anything you think will inspire me – even if it is not “financial” in nature)