Ever found yourself explaining the concept of money to a child and realized just how complex that conversation can be? That's where we start our journey in the latest episode—peeling back the layers of this everyday tool that wields extraordinary power over our lives and society. Together, we dissect the evolution of financial systems, from the rise of Bitcoin to the pitfalls of "keeping up with the Joneses." We expose the paradox of high earners living paycheck to paycheck and advocate for the necessity of financial education, fundamentally reshaping the way we think about, earn, and spend our money.
Money's a chameleon, ever-changing in society's hands, and this episode doesn't shy away from the uncomfortable truths—how dreams can be distorted by debt, how financial institutions influence our lives, and why it's essential to balance formal education with financial literacy. Delving deeper, we consider the role of experts like accountants in navigating these waters, underscoring the importance of making proactive, informed decisions. It's a candid discussion that promises to leave you with a new perspective on the dollars in your wallet and the sense in your bank account.
By the end of our discussion, we aim to redefine the value and importance of money in your life. We're not just talking about making more money, but using it as a tool to truly enrich your experiences. With tales of cultural shifts, the illusion of materialistic happiness, and the pursuit of an authentic life, we close this episode with heartfelt gratitude for our listeners around the globe. Join us as we embark on a path less traveled—one where money serves purpose and passion, rather than just purchasing power.
Ever found yourself explaining the concept of money to a child and realized just how complex that conversation can be? That's where we start our journey in the latest episode—peeling back the layers of this everyday tool that wields extraordinary power over our lives and society. Together, we dissect the evolution of financial systems, from the rise of Bitcoin to the pitfalls of "keeping up with the Joneses." We expose the paradox of high earners living paycheck to paycheck and advocate for the necessity of financial education, fundamentally reshaping the way we think about, earn, and spend our money.
Money's a chameleon, ever-changing in society's hands, and this episode doesn't shy away from the uncomfortable truths—how dreams can be distorted by debt, how financial institutions influence our lives, and why it's essential to balance formal education with financial literacy. Delving deeper, we consider the role of experts like accountants in navigating these waters, underscoring the importance of making proactive, informed decisions. It's a candid discussion that promises to leave you with a new perspective on the dollars in your wallet and the sense in your bank account.
By the end of our discussion, we aim to redefine the value and importance of money in your life. We're not just talking about making more money, but using it as a tool to truly enrich your experiences. With tales of cultural shifts, the illusion of materialistic happiness, and the pursuit of an authentic life, we close this episode with heartfelt gratitude for our listeners around the globe. Join us as we embark on a path less traveled—one where money serves purpose and passion, rather than just purchasing power.
What about magnificent ones? I have a curious question to ask you what is your definition of money? What does money mean to you? I know that we use money to do things. We use money to go places, we use money to pay for our subscriptions or what have you? Taxes build schools, taxes create bridges, and such Taxation is just the use of money by the government and what have you. However, what is money to you? Seriously, for me, money is a tool.
Speaker 1:
According to the dictionary, money is a medium of exchange. Money is a concept that's constantly changing. If you look in recent times, we have things like Bitcoin. Remember one time, a long time ago, in order to send money to people, you had to use a wire transfer right, and that could take days, weeks, months and now we have things like Zell. We have PayPal, we have Cash App, venmo. The tools that we use to transport money are constantly evolving. The concept of money is constantly evolving and our use is for it right. So now we have. Obviously, there's always been things such as stocks and bonds. Gold is not money, but it is a form of exchange as well. Gold has value, diamonds have value, and you can use those things the same way that you can use money, but depending on the situation, of course.
Speaker 1:
So I was trying to explain what money is to a toddler I guess the toddler between the ages of five and six I think that's toddler stage and I thought that was a very interesting question because I'd never asked myself what is money? You know, we just use it, but we never really ponder anything about it Other than oh, am I going to save money? Do I need money? How much money do I have? How much money do I need to travel here? How to map out my budget? How much debt do I have? Do we think of money in those contexts? Do we ever ask ourselves what is money? I mean, if we don't understand what something is, how do we know that we're using it to its fullest extent? How do we know that we're maximizing its use? You know how I find money to be a very fascinating concept, and I was not even the one that sparked that within myself, someone else did.
Speaker 1:
I think children can think of things that adults simply can't Like. We just lack that abstract mind that is needed to ask certain questions because we've been boxed in for so long, and then we think in a very linear fashion deal that we get and life is just too black and white. Oh, we use money to pay for things and pay bills and we leave it that and that is simply just an oversimplification. Money is so much more than that. You know.
Speaker 1:
Why is it that someone can make a hundred thousand dollars a year and, at the end of you know, each month? A person that makes a hundred thousand dollars a year is in the hole, right, you could have someone that makes fifty thousand dollars a year and yet at the end of every month, they have a surplus of money. One would think, the more money that you make, the more money that you have, but that in itself is quite unique, right? Because think about it. How is it possible that there are so many people that make six to seven figures a year that they're still living paycheck to paycheck, right? You know, we all tell ourselves like what is rich? Some people. Three hundred thousand dollars a year is rich. You know, one million dollars a year is rich. Yes, someone could make that, you know, as a salary, but that doesn't mean that they have more money than you. At the end of the day, right, even if you're making fifty thousand dollars a year, you could have your net to be more than someone that makes ten million dollars a year. That's their growth, right?
Speaker 1:
Yet when we're talking about ten million dollars a year, like, how can someone make ten million dollars a year and be broke? And how can someone make fifty thousand dollars a year? And they're the ones that are actually after them? Like, money means different things to different people. Some people have a certain attachment to money and it causes them to, you know, have the keeping up with the Joneses effect. Oh, I am now making a million dollars a year. Therefore, I have to buy a million dollar home which they don't actually own, right, they get a mortgage, so they have to pay the bank for that home Then. So their house isn't paid off, so now that's a liability. And then they're like oh, I have to buy this car. That's a hundred thousand dollars a year. I'm sorry, that costs a hundred thousand dollars. And that's another thing that now they also don't own. Now they're making payments, so they have again to be making ten million dollars a year and that money is depleting fast. Okay, now they have to pay taxes or property taxes from the Homeowners Association, and they blinked and now they're dead. And now they're living paycheck to paycheck. You live in a great area. The cost of living is more expensive, so now food is also more, so it costs more to do basic things such as eat, and entertainment costs more. Many people aren't equipped with the tools that they need to properly and effectively utilize my food.
Speaker 1:
You know, sometimes we say things that we believe to be true because we've been conditioned to think that way. Right, you know, like the moment that we turn 18, you constantly hear oh, you need to establish credit, and things like no credit is worse than bad credit. I mean, bad credit is the worst thing that you could possibly have, because it means that you've done damage to your credit. If you have no credit, that means you can establish credit in some way, shape or form. Right, the fact of the matter is we forget to mention, when we talk about credit sometimes, how people are drowning in credit card debt, and the fact of the matter is most parents forget to educate their children on the dangers of not being able to manage their finances. Parents will tell their kids so many things in life, but they never truly teach their kids about finances, and so they make the same mistakes that their parents made.
Speaker 1:
I was fortunate enough fortunate enough to have parents that did educate me on finances and understood what taxes were at a very young age, and you had a budget and things of that nature. I've always been financially sound and financially educated. But how many people had that same experience? You know Not many people do. What is it that you know?
Speaker 1:
Some people think that they can save and become a millionaire, and that simply isn't true. You have to invest to become a millionaire. If you buy, you know, a rental property, that's an investment, right? If you put money in the bank and a savings account, you're not going to get a return on your money. Your money does nothing for it. Your money does not work for you. So how could you possibly become a millionaire simply by stashing your pennies in the bank? You get less than one percent return annually, so that's not going to benefit you. Another thing is you know it takes money to make money, but some investments are very, very bad investments, like going to college.
Speaker 1:
College isn't for everybody, and I think that too many people go to college simply because they want to make other people happy. They don't know what they want to do and so they take the path of going to college and you're going to go to college not know what you want. How can you possibly succeed in something if you're aimlessly moving forward? Chances are you're not. Going to College is an expense, right, and college is also a business. So if you make the decision to go to college, who are you going to college? You know you can't get a refund if you don't like the classes that you've decided to take. You know there's no. Hey, I would like to return this degree. You know, back for the money that I spent here for the last four years. That does not happen. You can do that with an iPhone, you can even do that with your car, but you're only going to get back a fraction of what you paid for it. The moment that you drive off that lot, you've already lost 25% of its value.
Speaker 1:
So finance is something that if you don't understand the value of money, you don't understand finances. If you don't understand finances, then you're probably in deep crap financially. You're probably drowning in credit card debt, student loans and such, and those are very murky waters to navigate because in many cases, parents are also financially ignorant as well and they create kids who are also financially ignorant and, as opposed to being honest with their children about the pitfalls of not knowing how to utilize money as a tool, they simply perpetuate that culture of oh yeah, get this car, buy this house, and not tell them that it could really, really damage their future because you're doing something, because it's a routine. It's a routine to go to college, graduate college, get married by house that is a routine, not a bad routine. But what about when you want to go on a vacation and now you can't afford to go on a vacation because you're drowning in debt? You have a mortgage to pay. You have a card note that you need to pay. Here's a better one. What about when you're sick and you're drowning in debt and you have no healthcare? What do you do then? See, there is a value in understanding how money works. So if you're not financially literate, you're lost and you're going to continue to make very, very poor decisions as time goes on.
Speaker 1:
You know, I think that society forces the idea of college on kids and parents force the idea of college on kids, right, and at the end of the day, who has to bear the burden of that student loan? Whose wages get garnished for not being able to pay your student loan. It's not society, it's not your parents, it's yours. So why is it that we make certain things seem like it's just what we say, but not tell people about the fine print that goes with it? Oh, you go to school for an education, for a piece of paper that says hey, you went to school, you showed up and you can do XYZ thing. Right, but not. Oh, this is really an investment and it's going to take about 20 years to pay this thing off. And, by the way, while you're trying to pay this thing off, there's a lot of things you won't be able to do because so much of your resources are going to be diverted to paying this little piece of paper off. That's the part that parents forget to tell their kids about. Right, oh, you'll have a higher earning potential in life, oh, cool. But what if that industry collapses? Or what if the market simply gets saturated right to the point where this one job that used to pay six figures, now it pays $40,000 a year? Why? Because there's not a need for it anymore. It's become less and less needed by society. Certain career paths they don't get phased out by technology. Are those things that we're telling kids before they go to college. Hey, just because you love this thing doesn't mean you should go to college for it. Maybe you should do this as a hotline. That's a wise decision.
Speaker 1:
I titled this what is Money, but obviously, what money is and what money does and the positions in life that money can take. You are truly profound right. You can go to college and still not learn anything and still have to pay that bill, okay. You can not go to college and become a plumber and make six figures a year. I see why some people say that money is the root of all evil, and I see why some people say that money is simply just a tool. Like any tool, if you use it incorrectly, it can backfire and it can hurt you. Right? So you have to educate yourself as much as possible and do the best you can with the limited amount of knowledge that you have.
Speaker 1:
I would say that in this era, if you want to learn more about money, you can go to college. You find yourself not knowing how to properly, I guess, educate yourself. Do the YouTube thing right. Go on YouTube. You look up, you know the latest fashion trends and such online. Well, why not do that when it comes to money. I get that. It's boring and it's not glamorous, but it's your future. It's something that's going to affect you, to have a hold on you for a great period of time. You know, I love this quote that when you master yourself, you master your environment, and I also like that.
Speaker 1:
The follow-up quote to that is if you understand something, then you do not fear it, and if you do not fear it then you can conquer it. And money is the same way. I think many people don't fear what money could potentially do to them. If you borrow money, you have to pay interest size. People don't even know what interest is. People don't know what compounding interest is. You know, they don't understand what taxes are. They think that if they work five hours and they're paid, you know $10 an hour they're going to get $50. And then they get their paycheck and they're like why is it that I'm only getting $38? Because no one taught them that. And so the other thing that surprises me is someone who will spend money before they even have it. So they're in a hole before they even get paid. So they're broke before they even get paid. So they're like they'll say to themselves well, I'm getting this food bonus. And so they decide to buy this expensive car. And now, the money that they thought they were going to get they did not get, but guess what? They still have to pay that bill.
Speaker 1:
What are we doing as a society? Why are we getting progressively dumber as time moves forward? Why is it that the things that we should know, that should be common knowledge, we know absolutely nothing about? Do you remember growing up? You'd hear things about the American dream, you know? Last year I found myself saying what's the American dream anyway? Here is something that I wrote in college about the American dream. The American dream is the belief that all individuals have the opportunity to work for a better life, a life of awkward social mobility and a fair shot to attain wealth through hard work and perseverance. Along with these opportunities includes owning a home, go to college and be relatively debt free. And just for the measure, let us add up the concept of the white ticket fence, a golden retriever, a minivan and 2.5 filth.
Speaker 1:
This version of the standard American dream was the period, the time period of the boomers. Directly after World War II, america was experiencing an unprecedented level of wealth. Banks were giving out low interest loans to start a business, buy a home or attend college. Another nice perk at this time was when your money was in the bank. It was growing and accumulating wealth. Because interest works in your finger In the bank. By putting money in there, you were actually making money. Now that's not the case. As I said earlier, you make less than 1%. So if the idea of the American dream is that you're able to own a home, go to college and have college paid off and have 2.5 kids, how many people are living the American dream? Because not many people own a home, not many people are able to pay off college and not many people are relatively debt free. They're deep, deep, deep and deep crap debt. And last I checked, america is not experiencing some unprecedented wealth and the banks aren't giving out amazing interest Interest rates for putting money in the bank. Instead, banks are like hey, let's use this thing called fractional reserve, where we're just going to lend money that we don't have and just charge a bunch of interest rates to then make people go further in debt. And when the banks fail, guess what? They use the taxpayers' dollars to bail them out.
Speaker 1:
I'm not advocating for any political party. I'm just simply stating the facts and the realities of what is that Government allows banks to take advantage of young children by giving them credit cards they know they don't understand. The schools don't educate kids on finances. Parents are none the wiser, and so we create this system in which a lot of people are making poor decisions because they simply are not educated in the realm of finances, and they're making very, very poor financial decisions and then they end up losing everything. And who saves them?
Speaker 1:
You know, when you're a highly educated person and you're living paycheck to paycheck and you don't understand why you have medical bills to pay and you don't need any thought that because you know. Sure, let's just say that you're a scientist. You're a scientist, but you're not an accountant. Right? You can invent some space ex-rocket or something, it doesn't matter because sure, you're the person that did that. But at the same time, you fear like an affording where you live, because you don't understand finances, because no one caught you yet you can solve these amazing equations on how to send a rocket in space. It's not our fault why we're not educated in this, that everyone is an expert. I'm not an expert. I have an accountant that handles a lot of my dealing, but what I can do is, if there's a limited amount of knowledge that I have, I can choose to learn more and evolve in advance with time, and we all have that ability.
Speaker 1:
It's not where we started, it's where we finished. We are in this position, but it doesn't even have to stay in this position. It's never too late to learn. So long as you're willing to, you can learn. You know you won't be Bill Gates rich, but surely you can be at a level in which you can sustain yourself and you can navigate certain situations to not be in. And yet Maybe, iida, you'll know that, hey, this loan is going to break me in the wrong one. Maybe I should just skip chip fillet for three years. Maybe I shouldn't go to you know, a Taylor Swift concert this month. Maybe I simply should just live within my means, make some sacrifices, buy some stocks, learn about how it works. You know, maybe you won't get a million dollars, but maybe you can make fifty dollars. And after you learn how to make fifty dollars now, you can make a hundred dollars. You know you start small and you go big.
Speaker 1:
You know our generation doesn't. You know we don't get pensions right. We get these dumb things that are called 401Ks. Now, 401k is not a guarantee. A pension was a guarantee. So you retire and when you retire, you're guaranteed to get, you know, a certain amount of money right Until the day you die, and then you would get social security. So for a lot of people, they made more money when they retired than in their, you know, prime working years. You know, for our generation, again, like I said, we get these things called 401Ks. But what is that anyway? Right, you get, this is our, our retirement package, which absolutely sucks because you could have a million dollars in your 401K right now. If the market crashes, right this moment, you know what happens to that million dollars it disappears seemingly overnight. So that's not a guarantee. So we have no guarantee.
Speaker 1:
Our generation, so our generation has to diversify. We need to own some assets, buy some gold. You know, not not advocating for that for anyone, but you should definitely diversify, like your portfolio. Just because you have a 401K does not mean that will be your savings raise. Just because you have a savings, that does not mean that you know that you can't potentially get injured and that slavings will be depleted and seemingly out of nowhere. So a diverse portfolio is always the way to go. You know there's a say never put all of your ex in one basket.
Speaker 1:
I, when I was thinking of how to go about this particular topic, I was trying to be politically neutral and stay in the middle, to not seem as though I was advocating for any political party in particular. But seriously though, you know finances are. You know finances are a part of life and we should understand what money is. And when we understand what money is, then we can use money the ways that it should be used. A bank uses money like a weapon, right, a lot of people use money as a weapon. You know those who have it. You know you can use. You know they use money to basically extort from people. They're like, hey, you borrowed $1 from us, we're going to get $5 for every $1 that we lend out. We don't have the ability to do that, right, but the bank does.
Speaker 1:
Now, the bank contributes to a lot of terrible things that happen in society, you know, such as the housing market. The bank contributes. They would give loans to people who they know they shouldn't give loans to, and that's how, you know, 2008 recession happened. And then what did we do? The government paid people, aka the banks to fail. They got these amazing, you know, $100 million packages to retire after causing many people to lose their homes, but they get to use money in ways, again, like I said, that regular humans can't.
Speaker 1:
And I think that's why things like Bitcoin is so fascinating, because it belongs to no one person right Like the government can't just fill in and just shut it down. There's so many people that around the world that utilizes it and you know it's not a centralized banking system, it's decentralized and so many people can invest in it. You know it's relatively stable. But, more importantly, it shows that money is evolving and our usage for it is also evolving. I mean so. I mean even with NFTs. I absolutely hate those things, but those things weren't always around. They're relatively new in the era of technology, but look at the impact of it so far. Look at how it's become this generational thing. I mean, even if you looked at two years ago, when so many people decided to just put, you know, their stimulus money into Robin Hood and they saw amazing returns, it's amazing what happens when we decide to learn things. You know all the people on Reddit that decided to buy GameStop. You know stocks and can invest in many other things. That was a fad in history.
Speaker 1:
But why can't we, as individuals, make the decision to take power to our own hands and become the master of our finances? Do our research, not just because it's on Facebook or YouTube or, you know, tiktok? Why can't we take the power into our own hands and control our destiny, our financial destiny, that is, why can't we become the master of money, as opposed to having money be the master of us? You know, why do we feel the need to go to Starbucks every day? Because we watch, you know, a commercial over and over, and over and over again. Because we want to start by. So maybe we could, you know, watch things that tell us to save, save, save, save, save, invest, invest, invest, invest. Then force us to make better financial decisions in the long run. That will have a net positive, you know, to our lives.
Speaker 1:
I don't know how to make this topic concise because it's so broad. How is it that money can bleed into so many different aspects of our lives? I mean, think about how many people get divorced because they can't. You know what. I'm going to finish this thing up for a second and just, you know, speak. You know there was a time where there once was a negative stigma to those who were in debt, right, like socially, when people were in debt, you know it was strong upon. I mean, that person that was in debt was financially irresponsible, you know.
Speaker 1:
And in today's day and age, being in debt has become, like, so normalized that so many people think it's a natural state of being right, like there's so many people that want instinct gratification for everything. They don't know how to work hard and they take it easily out in many things and in a credit card they think makes their problems go away and it's simply just. It's like adding fuel to gasoline or fuel to the fire, as they say. You know they go. Oh, I need new shoes. Sure Shoes are a necessary step, right, but do they have to be Versace shoes? Really, really, there's no negative, you know ramifications of having, you know, versace shoes when you only make $12 an hour. Right, it's like this.
Speaker 1:
This instinct gratification, this need to constantly please others, are leading people to you know, their own financial demise. And if you're 20 years old and you still have 60 years of life, you know 64 years of life on average. It's a still life. Can you imagine being, you know, 80 years old and you can't afford your medication. You don't know where you're going to live. You can't even live the years in which you should be taking things slow or just, you know, simply enjoying the fruits of your labor. You can't. You're 80 years old with a part-time job. Think about how many people are of retirement age, that they're retired but they have to work a part-time job in order to sustain themselves, and that's not even by choice. They've been out working because they have nothing better to do. They're working because they have to survive. You know, too many people in our age are millennials or Gen Z's.
Speaker 1:
We allow our friends, our family or society to determine the choices that we make, and we're just like, we're puppets that are on our string. You know, our friend buys a new car. We have to buy a new car. Our parents bought a big house when they were 34, so we have to buy a big house when we were 34. For what, like? Why are we doing that Like? What's the goal? You know what is the end goal. What are we trying to accomplish? You know, you're sure.
Speaker 1:
You know a credit card is money that is available for you to spend, but it's not your actual money. You know you don't own it and you will never own credit because it does not belong to you. It belongs to someone else and that person has strings attached to that credit. So when you're out there you have to ask yourself do I need this? Why do I need this? Am I doing it for everyone else? Am I buying this for everyone else to show off? Am I doing this thing to make myself seem like I'm successful? Because if you're doing, if you're living life for everyone else, then you're not really living. And if you're buying things to fill some void that you have inside, then you might as well just pay for a therapist At least. Then you're improving and you're building and you're becoming stronger and better. But spending money for money's sake does not leave you anywhere.
Speaker 1:
Money is a tool. Use it to travel the world and learn something about culture and food and people and language, but do so correctly. Learn to budget and learn the value of money and sometimes learn to deny yourself certain things. And maybe you need that thing, but maybe you don't need it right now and you have to recognize where you stand to let your next step. Isn't you stepping off into a financial hole? Life isn't fair and we all want things that make us feel good in life, but it's also so much more rewarding when you work really hard for that particular thing and you treat yourself every now and then, as opposed to treating yourself every week, because then it becomes an addiction. Right Now it becomes a habit. Now you have to put it on Instagram, now you have to put it on Facebook and now you have to keep doing it because you're like oh, when I put my Versace shoes on Facebook, I got 10,000 likes, so let me just keep doing this because Facebook feels good.
Speaker 1:
Learn to be content now, because happiness is not a permanent state of being. Happiness is a temporary chemical reaction in our brains. That's all that happens is it's being content and being fulfilled at something that lasts an extraordinary amount of time. Value your time and use money as a tool that it is. I feel like this is more of a structure of rent versus anything else, but this is a topic that, again, I was completely taken off guard by it, because I was trying to explain to the toddler what money was. I couldn't give them my true definition of it.
Speaker 1:
It's one of those things that you know in your brain because of how you live your life, you've never had to vocalize that particular thing, but now I have to vocalize it, and by me vocalizing it I have to look inward, and in doing so, I thought about a lot of things. In financial decisions, I've made it in financial decisions that I see negatively affect other people, and it just made me a little frustrated, and that's why the content came out the way that it is, and I'm not ashamed of it. In fact, I'm happy, and sometimes it's good to just not be on script. So thank you again, magnificent Ones, for tuning in and have an amazing day wherever you are, whatever time zone that you're in. Thank you for the amazing support. It's nice to say that my podcast is international and that people from all over the world and all over the United States and North America are listening. So thank you, thank you, thank you, thank you for making this what it is.