This book was an accident.
A calamity of errors in my mid twenties forced me to make major financial changes in my life. These changes didn't happen overnight, but were a slow accumulation of real-world education, action, and determination. And the only way for me to deal with these changes was to write about them. The widening gap between where I wanted to be financially and the reality of my financial position produced an inescapable internal battle, one that I chose to fight. Something was fundamentally wrong with my finances, and I knew it.
My exasperation eventually forced me to examine my finances as a whole, and I came to the sudden realization that I needed a financial makeover. At that moment, I decided to completely overhaul how I thought about money.
If you are reading this book, the chances are that you are feeling some similar sentiments. Let me take a guess: You are living paycheck to paycheck, you have credit card debt, you have student loans to pay off, your savings are laughable, and you wince at the term “401(k).” You understand that you are behind.
This is how I felt too. How far behind exactly, I didn't know. What I did know was that I was going to stop living on the edge of financial collapse. Luckily, as a certified public accountant (CPA) I was educated with the tools for financial success.
Armed with an abundance of classroom knowledge, I was working in the world's financial capital, New York City, but disregarding any financial prudence. Instead of focusing on fixing my finances and building my wealth (like I knew that I should be), I was scrambling to get by, trying to keep up with the Joneses, and ignoring my savings.
In other words, I was feeling very American.
After several years of working hard, with virtually nothing to show for it, I decided to make a change and turn professional with my money; once I did this, I was on the path to the rich life. After that critical decision my life changed for the better, and I discovered the secrets of the wealthy. That is what I want to share with you in this book.
My money makeover started when I decided to take hold of my future and learn everything I could about money. Stuck in a situation that was not producing what I wanted, I chose to redirect my life and head in the right direction. You can too. There is always time to change the road you are on.
The six-step program laid out in this book will take you from being a broke Millennial to a rich Millennial. How fast that happens is up to you. By eliminating debt, creating a budget, learning how to buy big-ticket items, and saving for the future you will finally start to dominate your finances.
You are blessed with choices every day. Make the decision today that you are going to achieve financial greatness and enter the money makeover. The six-step program in this book helped to change my life, and I guarantee it will change yours too.
Let's get going.
There seems to be an element of inevitability in the way our lives play out. The success sequence of previous generations—spouse, house, kids, and lifelong careers—is broken. The slow decay of this success sequence has crept its way into our daily life, and by osmosis, our financial expectations. A collision of economic and cultural systemic problems has reached a tipping point, brought on by stagnant incomes, exacerbating credit card debt, astronomical student loans, ridiculous housing prices, and low retirement savings. These trends have sadly become the new normal, especially for Millennials.
Researchers are beginning to notice. In a fascinating study, Annamaria Lusardi, a professor at The George Washington University School of Business, investigated the financial consistency of young Americans between the ages of twenty-three and thirty-five years old. With more than 5,500 observations, the study revealed significant findings among young people, including their attitudes toward finances and apparent inability to handle them.
Think about those statistics for a second. Seriously, let them sink it.
As one of the largest and most diverse generations in US history, Millennials will make a significant impact on the United States. As a highly educated, optimistic, and ethnically diverse group of people, we consist of millions of young adults born between the late 1970s and the mid-1990s. With confidence on our side, we are able and willing to take on the economic challenges of our time, even after the Great Recession of 2008.
The problem is, Millennials face unprecedented financial hurdles, which has researchers worried. Says Annamaria Lusardi, “Looking at the data from the most recent National Financial Capability Study, we are concerned about their unprecedented levels of student debt and their overconfidence in financial matters.”2 In other words, Millennials face a challenge that we are overconfident we can eliminate. This presents a major problem.
As the brilliant English physicist Stephen Hawking said, “The greatest enemy of knowledge is not ignorance, it is the illusion of knowledge.”3 Overconfidence has the tendency to put blinders on the greatest of us, and when this overconfidence deals in matters with which we are unfamiliar, such as how to handle our money (clearly demonstrated in Lusardi's study), the results can be catastrophic.
There is good news though. Millennials are avid learners, and we understand there is always more to learn. This is particularly true with money. If we want to dig ourselves out of this hole and progress toward the life we want, it must begin with action. You do not have to shoulder the burdens of the new normal. After all, who the hell wants to be normal?
Starting anything new can be challenging. When confronted with the option of something new or better, people often refer to the status quo. As we saw earlier, the status quo puts people in an incredibly unhealthy financial position. It leaves people feeling stuck and burdened. And the only way to move forward, the way toward progress and promise, is to get unstuck.
The act of getting unstuck starts when you leave all your previous excuses behind. Own everything about your finances and do not fall prey to the typical excuses:
Transforming your relationship with money shouldn't be difficult. Yes, it will require some work, but learning to manage your money and your financial life will not be an intellectually taxing experience, only a test of determination.
If you allow it, money can be your best friend. Money is awesomely flexible, hardworking, diligent, and loyal. What people perceive to be hard about money is their behavior with money.
Living the rich life is not as advertised on television. The rich life requires a dedicated focus and a new kind of behavior with money. The rich life requires keeping money around, not giving it away. The rich life involves putting money to work instead of letting it remain idle. The rich life involves progress and moving forward. The rich life starts with getting unstuck.
The rich think differently. They know the secrets of life that have unlocked their ability to eradicate debt and put their money to work. They have an uncanny ability to decipher the important elements of any major financial transaction. They think deeply about how and when to make big purchases, and they question their emotions and assumptions before making major financial decisions. When doing all of this, rich people use the following rules to guide them toward success:
If you want to be rich, then act rich.
Most Americans behave in precisely the opposite manner. They have a warped mental image of “the rich life” fueled by too much television and social media. I have a name for this perception: “the filtered life.” It distorts everything.
The filtered life involves items of extreme luxury being flaunted as everyday experiences, such as fancy cars, expensive jewelry, constant travel, and giant houses. This level of consumption leaves the rest of us scratching our heads, wondering what we are doing wrong. It should come as no surprise that most people correlate this type of hyper-spending with wealth. Nothing could be further from the truth.
The typical American millionaire does not act like a Kardashian. Instead, these millionaires lead a profoundly unsexy and frugal lifestyle. They typically do not spend lots of money on suits, watches, or other nonproductive purchases. In fact, in the groundbreaking book The Millionaire Next Door, authors Thomas Stanley and William Danko reveal that more than half of American millionaires have never paid more than $140 for shoes, $235 for a wristwatch, or $400 for a suit.4 Then why does the media continue to push images of wealth and consumption in today's society? Because it is sexy, and sex always sells.
Being unsexy, however, is the quickest way to get rich. But do not just take it from me. If you want to be rich, then you should focus on the words of billionaire venture capitalist Chris Sacca, who told Entrepreneur magazine, “My best piece of advice for the quickest way to get rich is to not spend any of your money.” Additionally, Sacca noted, “People get out ahead of themselves in debt with spending on all of their desires.”5
This simple, yet profound, point highlights a major problem: The financial hurdles we face are often created by our actions. As Americans, we tend to acquire debt and thereby encumber our path to wealth.
Sacca also touches on one of the most fortified routes to the rich life: living well below your means. Staying out of debt, downsizing your lifestyle, and earning more money will allow you to accumulate savings at an exponential rate. The formula is proven. And once you start making your money work for you, instead of you working for your money, you will understand what being wealthy truly means.
It is time to hit the reset button. Start over. Begin again.
The problem is that you were not taught much about personal finances in school. Even as a CPA, I didn't receive this knowledge in my formal education. It wasn't until I started living in the real world that I learned how to master my money.
Not many people have been shown the path to success. Everyone is focused on the result of being wealthy, having money to spend, but not the process itself. Consequently, few people adopt the right habits, hacks, and rules to increase their wealth quickly. Financial freedom can be engineered. And I will show you how.
If you want to turn around your finances, then start the Millennial Money Makeover. Adopting this mental outlook and way of life will pay for itself tenfold and also give you:
The prescription for lifelong financial success can be attained by anyone. If you have the determination to be a financial rock star, then take control of your financial life.
Decide to begin your money makeover today.
Millennial Money Makeover is built on the fundamental belief that everyone can turn around their finances and lead the rich life. To achieve that goal, a foundation in money principles is critical for long-term success.
The following list is a set of guiding principles to help you stay the course. They are not bound by time, location, or station. You can lean on these principles whenever you feel tempted to purchase beyond your means or question whether you are making the correct financial decision. These principles are forged in the crucible of modern Millennial life. They serve as a constant force in the swirling wind of fickle financial advice. Keep them close and read them often.
You will find these principles selectively scattered throughout this book. They are placed in key areas to reinforce the mindset that you have the power to control your financial future. Follow these principles, and they will be integrated into the fabric of your daily financial habits.
Life is a collection of small decisions, and you have made an important one today. Dive in completely and embrace the full money makeover.
This book will teach you about yourself.
You will learn that you have everything it takes to master your money and live the life you have always wanted. It will teach you that you have more willpower than you think and that deep within you a change is already taking place. The money makeover will change your financial outlook forever. All you have to do is follow a simple step-by-step sequence that will build up your riches and set you up for lifelong financial success.
In this book, you will learn the six steps to turn your finances around and gain true wealth.
This book is jam-packed with information from entrepreneurs, authors, and professors about how to become prepared for any financial situation. This book will teach you all that you need to know about interest rates, how to pay off debt insanely fast, the proper way to invest, the best way to buy a house, and countless other secrets of the wealthy.
The secret to getting rich is out. With a dedicated focus and willingness to follow the money makeover, anyone can be a financial success. The money makeover begins with a decision—one that you have already made.