Mastery of Money for Students

Adam Carroll

• Publisher: BookPress Publishing
• Year: 2019
• ISBN:
  9781947305014
• Edition: 1
• Topic: Personal Development
• Subtopic: Personal Finance

The knowledge and ability to make, manage, save, and invest money is critical to your overall success in life. "Mastery of Money For Students" is an easy-to-read, story-filled journey through the fundamental building blocks of pursuing Mastery. Your financial future is entirely up to one person––YOU. The earlier you start on the path to understanding money, the faster you'll experience your own version of success.

"An investment in knowledge always pays the best interest." –– Ben Franklin

CHAPTER

  1  

Introduction

Here’s a bold prediction. Reading this book will mark the beginning of a long and prosperous life, if you take it seriously.

Students everywhere are being introduced to this book, and some will think of it as more homework—just another 138 pages they have to finish before Friday. But, those who treat this book as their financial wake-up call will find the pages hold more than just stories and ideas to pursue the mastery of money. This book contains fundamental, foundational wisdom that EVERY person must understand if they are to achieve financial success in their lives.

• If you’re a part of a school system where personal finance is a required course, consider yourself lucky.

• If your parents are the kind of people who talk to you about money, consider yourself luckier.

• If, by chance, you’ve read other books on making, saving, managing, or investing money, you are WAY ahead of the game and this book will be a booster shot to your financial future. You can consider yourself the luckiest.

The majority of students today go through their secondary education years without ever learning the key foundational principles that are taught in the pages of Mastery of Money for Students. Most of them pursue higher education, waste precious time and money in the process of “finding” themselves, and over-borrow on student loans to fund a four-to six-year party. They then graduate into a job that doesn’t give them the life they imagined because they never imagined having tens of thousands of dollars of debt.

But not you. You’re different. Because you hold this book in your hands and you intend to take it seriously, you’re on a different path. The opportunity before you could be life-changing.

This book will guide you on that path, giving you an understanding of money and why it will play an integral part in your life as you progress through your teenage years, 20s, and beyond. It’s possible for someone of modest income to reach financial independence by their 30s IF they apply Mastery of Money principles. By the end of these 138 pages, you’ll understand that money is as important or more so than reading, writing, and simple arithmetic.

The bottom line is that you’ll use this information for the rest of your life. (Hopefully you’ll read and write that long too, but pursuing the Mastery of Money makes those things tremendously easier as well.) And remember, the pursuit of mastery is something that happens throughout your life. This should be just the beginning of your journey.

You’ll notice as you read through the following chapters that the key elements, vocabulary, and ideas are bolded. You can glance through the book after reading through once and identify all the concepts that need to be reviewed.

The research and background for this book came from hundreds of conversations with students just like you. As a financial educator, over the past decade I’ve spoken to well over 250,000 people in college and high school audiences, spreading the message about how to pursue the Mastery of Money. I’ve found there are three kinds of people in the crowd: students, tourists, and inmates.

• Students show up because they want to learn something from me.

• Tourists are there because they came with a friend or heard there was free food.

• Inmates are forced to be there, usually getting extra credit for showing up.

I hope you show up as a student while reading this book. I hope you understand the words on these pages were written by someone who cares deeply about your ability to achieve whatever you want in life. It’s up to you to understand, to practice, and ultimately to live out the principles in this book and continue your own pursuit in the Mastery of Money.

PART 1

The Foundation

Look up the word “foundation” in the dictionary and one of the definitions is “an underlying basis or principle of something.” Part One of Mastery of Money for Students will provide you with the underlying basis for which this book was written, an understanding of why this information is important for you, and some suggestions on how best to apply the following chapters to your life.

CHAPTER

2

You Are Expensive

One Monday morning in a classroom in an affluent Texas town, after settling the students down and handing them each a small spiral-bound notebook, the teacher asked each of the students to make a list of everything they wore that day.

The students gave vacant looks, trying to figure out what the teacher was up to. One student raised her hand and asked, “You want us to list our clothes?”

“Yes, we’ll start with what you’re wearing. And I want everything listed from your shoes and socks to your earrings.” The teacher turned back to the papers on her desk as if to say, “Get to it.”

The students listed their items of clothing in the spiral-bound notebooks—Nike tennis shoes, white socks, blue jeans, sweatshirt. About four minutes into the exercise, the teacher said, “Make sure you list everything—Underwear, belts, watches, necklaces, bras.” At this point the guys pointed at each other and laughed.

Once the teacher settled down the juvenile humor, she asked them to add to the list any surgeries like getting tonsils or an appendix removed, any dental work like fillings or crowns, any orthodontics like braces or headgear, if they wore glasses or contacts, or if they ever had corrective devices like knee braces. She told them to write those down below the list of clothing they wore that day.

Once everyone stopped writing, the teacher then turned to athletics, music, and other extracurricular activities. “Below your braces and glasses, list the sports you’re involved in, musical instruments you play, and any other activity you might be in like drama or debate.”

By this point, the students were curious about the teacher’s angle and were making guesses about the purpose of the exercise. One of the students chimed in with, “I suppose you’ll want what we ate for breakfast next.”

“Exactly,” was the teacher’s response. “And what you typically have for lunch and dinner on an ordinary day.”

Most of the class thought this was an exercise meant to waste a portion of class. However, the teacher had other plans.

“By now you should have a long list of things you’re wearing, procedures you’ve undergone, activities you’re a part of, and food you might eat on any given day,” she told them. “The next step is to put a retail price on everything. Next to your list, I want you to write a realistic price you’d pay for what you’re wearing, what your braces cost, how much your activities are, and how much your food costs. If you need help assigning a price to your items, just work with the people around you. Oh, and we’ll be doing this exercise every day for the next week.”

As you might expect, there was a bit of grumbling about the fact they’d have to do this exercise every day, and one student asked, “I’m fine with recording all of this if you will tell us what the point is?”

“The point,” the teacher said dryly, “is to establish the fact that YOU ARE EXPENSIVE.”

For an entire week, the students in this Texas class carried around a small spiral-bound notebook and documented the clothing they wore each day, the food they ate, the activities in which they participated, the gas they consumed, and the cell phone bill attached to their phones. Every expense that might be incurred on their behalf went into the notebook, even if it was questionable.

At the end of the week, the students tallied up how much they cost their parents for that week. The results ranged from a few hundred dollars to thousands of dollars, and when cars, phones, camps, and vacations were added, the numbers jumped to tens of thousands.

According to CNN Money, the average cost to raise a child from birth to 18 is $245,000.¹ To deliver a baby at a hospital today has a price tag between $20,000 and $50,000 (health insurance usually covers some of this)—kind of makes that one week look like chump change, doesn’t it?

Let’s take it one step further…

For your parents to fork out the full $245,000 in aftertax dollars, they would have to make 30-40% more than that before income taxes are taken out. That means the total amount of income needed to raise you from age zero to 18 is closer to $325,000. No wonder they feed you Totino’s Party Pizzas and Top Ramen.

See for Yourself….

1. Take a personal inventory of what you’re currently wearing and assign a retail value to it. Be sure to include everything from top to bottom.

2. Next, add up all the surgeries, dental work, orthodontia, glasses or contacts, etc.

3. Now, estimate the cost of your extracurricular activities, camps, etc.

4. Finally, estimate how much you consume in food on a daily basis.

Add all of these figures up to get a sense of how much you cost your parents. Keep in mind this is ONE DAY (granted, we’re including things like braces, glasses, and extra-curriculars, but you get the point). If you add in your phone service, your car payments and/or insurance, and anything else covered by Mom and Dad, you should feel compelled to give them a big hug when you see them next.

The point of this story and the exercise above is not to make you feel guilty nor to make you swear off lunch and wear a garbage bag to school to save a buck. The point is to illustrate that even though you may not be aware of it, life costs a LOT of money. Even as a student, there is a significant cost to living your life.

For a majority of students, their parents cover the bulk of their daily expenses. When you have no awareness of how much was spent to make you look as good as you do, you might assume it’s a small amount. As you have now learned, that is not so.

Realizing that life is expensive is a central principle for the Mastery of Money Student. Your understanding of the costs associated with progressing toward adulthood will help you make some very important decisions in the near future. The expenses you’ll incur from this point forward will only grow—they rarely shrink.

Do yourself a favor and thank your parents tonight for working so hard on your behalf. They’ll probably fall off their chairs at dinner. It’ll be awesome.

CHAPTER

3

Your Financial Success
is Entirely Up to You

Carlos was a college student who approached me at a university event. He had waited around for quite some time to chat with me and I could tell he was eager to share his story. After exchanging names and some pleasantries, I asked him what he took away from my presentation.

“Basically, I learned that I’ve been doing the right things for quite some time,” was his reply.

“That’s great to hear, Carlos. Where and how did you learn about money?” I asked.

“I would say from my parents, but ultimately it was on my own. When I was 15, my Dad sat me down and told me they’d give me food, shelter, and $50 a month, but the rest was up to me.”

He piqued my curiosity, so I asked him,...

Table of contents

• Cover Page
• Title Page
• Copyright Page
• Dedication
• Contents
• Acknowledgments
• Chapter 1: Introduction
• Part 1: The Foundation
• Part 2: The Basics
• Part 3: Taking Action
• Notes