School Stories 5 - Investments - Personal Finance 1 of 5

NOTE: I planned to write one blog post and include the handy information that we learned during the personal finance portion of my Investments class. I thought that if it got long, I would maybe divide it into two posts. It actually ended up being five posts. Instead of posting a book for you to read today, I’m going to schedule the posts for the next four days.

We finished the personal finance portion of my Investments class. It started with us watching an episode of Oprah where she had a bunch of ordinary people who had accumulated a lot of wealth on the show. There was this old lady who had saved her whole life, and she only made $18,000/year as a librarian, but she had about half a million dollars to retire with. Another girl had started saving as a kid, and she put basically everything she made in savings, and was going to retire with a million dollars at like 25 years old. And they had financial advisors on the show offering suggestions, and a bunch of stuff.

And there were eight tips from Ric Edelman on how to become wealthy. But they were all tips that made more sense if you were already investing. (Like “ordinary people who invest and become wealthy rarely move from one investment to another” and “ordinary people who invest and become wealthy don’t pay attention to the media”). So if you want to find out about that, you can Google it.

And then in class, we discussed that stuff, and we talked about ways to save money to invest (which seems more practical, I think), and how to start a budget, and how to eliminate debt. Here are some highlights from the class discussion after the movie:

- It’s important to just start saving. Open a mutual account with $100 and put in $25 when you can, and that’s better than doing nothing. It will add up.

- Everyone has needs and wants. If you’re in debt, your list of wants needs to get shorter.

- If you find your self-worth in buying stuff, you’ll never bet wealthy.

- “If it’s on your ass, it’s not an asset.” (One of the ladies on Oprah said that, and they kept repeating it after that. The idea is, if you’re spending money on clothes and other consumable things, those things don’t last and don’t contribute to your wealth.)

- Saving money doesn’t mean that you have to give up everything good. Identify what makes your life pleasant, and keep those things. (Our professor was saying that after watching the Oprah thing with her husband, she joked with him about them getting rid of DirectTV, which was one of the suggestions on the show. He said he would fast every Wednesday so that they could keep it. For them it’s something that they just plan into their budget, like boating, which is another thing that they really enjoy.)

- The first thing you should do each month is save.

- It’s very important that the whole family be involved in the family’s finance. On the show they mentioned that there had been a survey of three year olds, and a bunch? most? of them thought that money comes from ATMs. My professor said they taught her three year old that mom and dad have to work for them to have money. She told us that one time he wanted something and was like “Mom, go to work so you can buy me this.”

- It’s not so important how much money you make; it’s more important that you’re diligent and consistent about saving.

- Our professor said her sister attended Utah State. There was a guy there who didn’t pay rent while he was doing school. He camped up the canyon, and when it was cold, he slept on campus in front of some vents that blew warm air. He ate from cans. And when he graduated, he had no loans or anything; school was all paid for. Our professor said that it was something she would never do, but it was an interesting example of someone who had found a way to pay for school, anyway.

- Are you setting goals and achieving them? That creates happiness and shows your self worth. If your goal is just to have money, you’ll never have enough; there are plenty of celebrities with a lot of money that are unhappy.