By Gina Plytas, May 2, 2019, Author of Kids Get Rich: https://getrichkids.com
Almost 15 years ago I read David Bach’s book The Automatic Millionaire and bought into his ‘one step plan to financial freedom.’ Simply put, this book was the financial wakeup call my husband, and I desperately needed. - It was a game-changer for us.
The Automatic Millionaire opened our eyes and gave us a tactical plan to achieve financial stability. It also inspired us to read other books on financial management like The Wealthy Barber by David Chilton, Rich Dad Poor Dad by Robert Kiyosaki, and, The Richest Man in Babylon by George Clason, to name a few.
For us, David Bach’s book, was the first step, the catalyst (you can say) on our road to financial literacy.
Let’s backtrack for a moment to set the scene that led me to buy the Automatic Millionaire book, at Zellers (a former Canadian Retailer) almost 15 years ago.
My husband George and I were in our early 30’s. Our incomes were on the rise, but we were making a lot of financial mistakes. Credit card debt, excessive spending and poor financial habits, were creating stress and preventing us from living our dreams.
Our Moment of Truth
I distinctly remember a crucial moment of truth for us was when I ordered a $20 pizza on my credit card, and it got declined. - I was a little embarrassed and a bit bewildered. This little incident caused me to think about how we were managing money and our lifestyle. I realized I didn’t have a good line of sight to our finances and frankly, neither did my husband. To be clear, our financial situation was not totally out of control; we weren’t losing our home or getting our electricity cut off, but WE were not on the path to prosperity. – We needed to find another way.
Does our story sound familiar? – Seriously, who hasn’t made a mistake or two with their finances.
It was right after this incident that I discovered the Automatic Millionaire. At the time it felt like I found the book by chance or just blind luck, but looking back, I’d say I found it right when we needed it. The timing was perfect.
The ‘Unforgettable Weekend’ We Completely Overhauled our Finances.
For starters, I began to read exerts from the book to my husband at night to get his perspective and determine if we were both in alignment to make some necessary financial changes. He was on board and in fact, suggested we dedicate an entire weekend to reading the book cover to cover to identify tactics we could implement immediately. - Not my favourite way to spend the weekend, but we both realized this was our call to action and jumped at the opportunity to put a plan in place.
5 Practical and Tactical Financial Strategies We Implemented Right Away
There were many great tips provided in the book, but below is a recap of what we did:
Our finances were in much better shape within 6 months, we had less stress, more peace of mind and within a year we had saved an additional $10K which greatly assisted us as we were expecting our first child, a baby girl (Maya) soon to be born.
Living the Life We Dreamed About
Getting financially educated was an incredibly important step for us as a couple and soon to be parents. We learned together, implemented a plan and saw almost immediate benefits.
Like I said, becoming financially literate was a game changer for us. It changed our perspective on money; it revolutionized our day-to-day finances, and it improved our quality of life.
David Bach’s ‘one-step plan to financial freedom’ and our decision to live differently, is what got us moving in the right direction. – And after we had our daughter Maya, two years later, we had our son, Jayden and it was off to contributing RESPs for their future education.
What We Learned
We learned a lot through this experience. And I’m proud of the plan we executed to improve our circumstances. - As time has passed though, life has changed, and we’ve updated our plan to meet the needs of our growing family. A financial plan can’t stay static; we continually review, assess and find better ways to optimize our finances.
Paying it Forward
So, all this learning (as a couple and as new parents), got us thinking … how can we teach our kids what we learned and help them avoid some of the financial mistakes we made?
When we were growing up, and even today, financial literacy is not really taught in school. And although we learned a few strategies from our parents, we didn’t get enough guidance on money and finances growing up.
Knowing this, as parents, we decided to find a way to consciously pay it forward. That’s when we decided that it was not only an opportunity but rather our responsibility to teach our kids a better way to live.
We couldn’t find a resource that pulled together all the key strategies we learned, so we wrote a book about it. KIDS GET RICH. It’s a guide for parents to teach their kids about success and finances. This is our way to help our kids (and maybe yours too!) to gain financial independence and freedom. – After all, if we don’t teach the next generation, who will?
Kids Get Rich, want to learn more?
By Gina Plytas, Author of Kids Get Rich: https://www.getrichkids.com/
Kathleen Elkins' article: 14 money lessons rich parents teach their kids is based on research by Steve Siebold, 'author and self-made millionaire,' who has spent countless hours studying habits of the super wealthy. I found her article intriguing, so I decided to dig more into the topic.
Among other great tips for parents, in Steve's book: secrets self-made millionaires teach their kids, he says the wealthy "choose prosperity over entertainment. The rich use their time differently than the average person ... The masses spend their time, while the rich invest in it. " and he concludes that if you: "Spend time basking in entertainment, you will struggle your entire life financially. Invest your time creating solutions to people's problems, and you'll never lose a minute sleep worrying about how to pay the mortgage".
Learn to Invest in YOU
Simply put, spending time learning is the best investment you can make in yourself. Reading, listening to audio recordings, attending seminars and meeting with mentors (people who have already done what you want to do) are key activities that will pay back rich dividends over time.
In Bonnie Low-Kramen's article, What Do You, Bill Gates, And Oprah Winfrey All Have in Common? she states the plain truth: We all have 24 hours in each day. "As rich and powerful as they are, even Bill and Oprah only get the same 24 hours you get. The difference is what you do with that time."
What a powerful lesson to learn and teach your kids, too.
The 5-Hour Rule
So (on average) how much time should you invest in personal growth and development each week? In his article, Michael Simmons writes Bill Gates, Warren Buffet and Oprah Winfrey All Use the 5-Hour Rule. "Top business leaders and entrepreneurs spend five hours a week doing deliberate learning."
Are you using the 5-hour rule today? I'm willing to wager most of us are not. So it's true, part of what makes them different, is how they use their time.
Make the Most Of Your Time
Recently, my husband and I had a discussion with our kids about how they use their time. Being in the digital age, there are more time wasters now, than ever. Kids and adults get hooked on Twitter, SnapChat, Instagram, Facebook and other social media for hours, each week. Seriously, who hasn't spent an entire weekend on social media or binge watching a favorite series on Netflix? It's perfectly fine to dedicate some time to these fun activities, but it's critically important to put a time cap on it.
For a couple of weeks, track how much time you are spending on these activities versus time spent learning new skills and developing interests. Think about how you can reinvest this time in you, and help your kids to use their time productively, too.
Adopt a Continuous Improvement Mindset
My husband and I recently published a book KIDS GET RICH: Teaching Children the Secrets to Wealth and Success and a key concept we cover in the Spirit of Advancement strategy, is teaching kids to adopt a continuous improvement mindset. It's about going beyond what kids learn in school today, and focuses on learning the practical skills needed for life.
'You can't get ahead by doing the minimum. To be in the top percentile in any chosen field, you must always keep learning and growing. Be curious. Read books, watch videos, listen to audio recordings and seek out mentors to increase your knowledge and specialized skills. Find others who have already done what you are trying to do and learn from them. The commitment to grow and learn, can't stop--ever. Show your kids how you do this and they will be inspired by watching you.'
You are your kids greatest role model. What they hear and watch you do, influences what they say and do. Analyze how you use your time and help your kids make the most of theirs.
Kids Get Rich, want to learn more?
Kids Get Rich is a guide for parents on how to teach kids the fundamentals: developing a success mindset, personal resiliency and money management strategies to build personal wealth.