3 Things 12-5
Thing One The Difference Between... There’s a short video created by a personal finance coach circulating on the internet. See the text transcribed below: “The difference between poor people, middle class, and rich people is not how much money they make. And it’s not even how much money they have. The difference between poor people, middle class people, and rich people is what they believe the purpose of money is. Poor people believe the purpose of money is to pay bills. So the only reason they go to work every day is so they can get some money on Friday and hand it over to somebody else. Middle class people think the primary purpose of money is to establish good credit so they can buy things they can’t afford and pay them off over time. Rich people understand that the primary purpose of money is to turn it into more money. So I’m going to take the money that I make, turn it into more money than I had, and then and only then can I be wealthy. I can only be wealthy if I hold onto my money long enough for it to get pregnant and have some babies. I want to take every hundred dollar bill I get and put it in the money maternity ward. That’s the mindset that is necessary to develop the skillset of investing.”
Thing Two Some Financial Trivia Did you know 35% of prime working-age adults (those between age 30 and age 55) have zero retirement savings set aside and that among the 65% that have put something aside, the average net balance is $73,000 (the median balance is $35,000)? And how about life insurance needs? Did you know nearly half of the people with life insurance only have coverage amounts of $100,000 or less and that 1 in 3 parents/families with children under 18 have no life insurance at all – even though they are the sole means of financial support for their children? And speaking of those $100,000–or-less policies, those are the kinds that you usually see in employer group plans. While they will likely cover the cost of a funeral, they are not going to replace years of lost income and they’re probably not going to pay off a mortgage or provide much help paying for college. And let’s not forget about debt. Did you know the average person pays “rent" on money” (more commonly known as interest) of $8,000 annually? That’s $8,000 – annually – that can’t be saved, invested, or used in any number of ways that would benefit you and yours rather than somebody else and theirs. Need some help? Know somebody who might? Contact us, we can help put a plan together.
Thing Three Just A Thought “Compound interest is the eighth wonder of the world. He who understands it, earns it. He who doesn’t, pays it.” — Albert Einstein