Simple Success Podcast - What Is Financial Education?
Hello, everyone, this is John, and the Simple Success podcast, financial life coaching from a happiness perspective, I could chant like a Buddhist monk, or something like that. Or I could just answer questions for you and help you do the greatest thing that you could ever do in your life. And that's what we're going to do. We're going to start today with a question that lots of people ask, what is financial education? Well, that can be a lot of things, a lot of different people. Let's say for example, you want to know about the importance of financial education, or what is often referred to here, this is a popular topic all the time now, financial literacy.
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How important is that?
Well, it's critically important. How many times have you had listed a bunch of also asked.com questions here? How many times have you stopped to reconsider a possible investment? Or not just an investment, not just a financial thing? Remember, this is financial life coaching from a happiness perspective? How many times have you stopped yourself from doing anything, whether it was investing or up something else? Because you didn't have 100% confidence in what you were about to do. I would wager that's almost every time because that's true for me. So, it's got to be true for most people. point being is you have to account for that and get over it. Get a return. Start small. Let me give you a great example. If I were to tell you to go out and invest $40. In six weeks from now, my advice to you is going to be sell that thing. For $48. Let's not get into numbers yet. Let's just get into your personal perspective. Based on other things in life, we're going to do what in psychology is known as framing. And you can take from this because psychology is in everything. If you did exactly that, bought something for $40. Six weeks later, sold it for $48. Without getting into the time-frame, you would have you can look at that many different ways. The way most people are likely to look at it is to say, Okay, I put it $40 I got bag $8 $48. I put it $40 I got back $48. That leaves me $8. Change, profit. Six weeks go by, I get $8. Big deal. Can't buy anything for that. That's one third or one fourth of a pizza for crying out loud. Now, let's change the perspective. Let's flip the script.
Here's what we're going to say.
On day one, I want you to invest $40. After six weeks, I'm going to get you a guaranteed 20% ROI. Did I just pique your interest? Of course, I did. Because a 20%. ROI is pretty good. As you'll learn if you don't already know, a reasonable rate of return, despite what Wall Street gurus might tell you, is seven to 10%. We'll get into that detail later. But based on that, and certainly based on what the bank's been paying you for the past couple of years on your savings account, a 20% ROI sounds pretty good. Here's the psychology. Putting up $40. And getting back 48 is exactly the same thing as a 20% ROI. Honestly, we're not getting into the timeframe. So, anybody who wants to pick me apart on that is welcome to do so. But there's nothing to pick apart given that caveat. It's no different. That's what I want you to do. So, if you are not comfortable with putting up $100 or $1,000, or a million dollars or a billion dollars, let's say you don't have that, because most people don't, I don't, you can still play the exact same game in a small and comfortable way. And we'll talk about how the point here is get out there and do it. We'll also later talk about something called the knowing doing gap, which is when you know how to solve a problem, and yet you don't actually take the action because of one of any number of different possible reasons. So we'll get into that. So, remember, financial education? Why is it important? Is the math class? Not really? I mean, it certainly is. But my goal is to make it fun. How can you get that financial education, that's what I'm here to do? I'm here to tell you about it. And I want to know your opinion. You'll be the recipient of some surveys from time to time. And there'll be a few segments that we'll want to cover while we're here. One is one, I'm going to call, thanks to a good friend of mine named Mark, a rabbit hole segment.
I, like many of us have a tendency to go down rabbit holes. I'm happy to explain what that means. You probably already know; I express that to my friend. I expressed that to my friend Mark last week. And she said, she has exactly the same tendency. And she had talked to an advisor that she had at university, who told her to simply talk to the rabbit. So, there'll be a segment on that. If I feel like I'm going well, there may not be a regular segment on that. Well, that's going on under development. But whenever I feel like that's coming on, you may hear a sound indicating that we're about to go into a top to the rabbit segment. So, listen for that coming up. another segment is going to be a mantra segment, I want you to understand it, I'm going to explain what it is right now. Give you an example. A mantra is saving is you investing in you. That was a mantra, I believe in it, it is absolutely true. And I will explain that when we get into detail.
"Saving is you investing in you" - John Brandy
Another segment we're considering is the explain and flip segment, such as a common concept that's out there. Let's take it or to explain it. And let's turn it around to do something to help you accomplish what you want to do. That's the explain to folks’ segment instead of for example, a common phrase you hear don't invest money can't afford to lose. I will explain the opposite side of that, which is invest money in what you believe in. And I'll tell you why that's different and why the differences are hugely important. And last but not least, we're going to we're going to do a transparency segment because I really dislike it when you I really just like it when misinformation is displayed when misinformation is distributed, I don't presume that I will be right 100% of the time. But I guarantee you that you can I try what I've tried because I've tried it myself first before I suggest to you always been my policy. Don't just say you do it, do it.
We're also going to post roles and word cloud. And I'll tell you all about part one as well questions in