May 20, 2020

The talk (on money)

By Dale Alexander

A little background on Dale Alexander, a friend of Goodwin Investment Advisory.

Dale has been blessed to pour inspiration and motivation into others for 30 years. He is a well-known employee benefits broker and advisor. Dale combines his passions with speaking opportunities to impact others’ lives and attitudes. His stages have included numerous corporations, association conferences, school convocations and the Main Platform at the Million Dollar Round Table (MDRT) Annual Meeting.

If you meet Dale, you will never forget his passion for everything he does, from riding his skateboard on his hands with his kids, to his love of sweet tea! He believes he is here solely to change lives, and after hearing his message, he hopes you will believe you are too. Dale serves on the Boards of Camp Highland and Growing Leaders and is an Elder for North Point Ministries.

Money. Where we spend it defines what is important to us.

It is up to you. What kind of life do you want?

Money thoughts – true or false?

  1. “If you look rich, you probably are rich.” False – Check out the book, “The Millionaire Next Door” (link)
  2. “If you want to play on the team, go to the gym. If you want to own the team, go to the library.” True – What you’re reading or studying will be an indicator to your success.
  3. “Financial success isn’t buying more stuff. It’s learning to live on less than you make.” True.
  4. “If I could make a lot, I would give a lot.” Hopefully that is true for you but studying Americans, this is false.
  5. “Money makes a good person better and a bad person worse.” True – Truett Cathy, founder of Chick-fil-a made this statement. It is true that money is a magnifier of what is already inside of us.
  6. “Most Americans are rich.” True and false – from an international perspective, the answer is true (our cars have their own rooms). From a national perspective, we are poor.

The Average American Family:

What does the Average American family look like financially?

  • 30% of Americans (about 1 out of every 3) households have less than $1,000 saved!
  • Average household debt, not counting home mortgage…$38,000 (credit cards, car payment, college loans). Stay as far away from debt as you can because debt robs your future.
  • Average HOUSEHOLD income… $64,000
  • Average net worth… $97,000
  • About two paychecks away from bankruptcy. 7 out of 10 Americans say they deal with financial stress.

Follow these principles:

  1. The SINGLE greatest financial decision you will ever make

Before you get your first paycheck you should decide to live off of 70% / save 20% / give 10%. From your first check make sure you save 20 percent and give 10 percent.

Set your standard of living now.

“You don’t have a standard of living established yet. Whatever you accept as your standard of living, THAT is your reality.” David Helton

And this chance only comes ONCE! Don’t try to live up to the highlight reel of others.

If you already are making money, start now with any new money that you make to follow this principle.

  1. Why should I give?
  • Many people are suffering today with anger, loneliness, anxiety and depression.
  • The world tells us to serve ourselves. (The greatest lie)
  • The greatest way to eliminate hopelessness and despair in our lives is through serving, becoming second to others.
  • When you have a purpose of serving and giving, life gets a new perspective.
  • It is impossible to feel hopeless when you are giving hope.
  1. What are investment options, and what do they mean?
  • Cash

checking account, savings account (least amount of return)

  • Bonds

loan money to a company for an interest rate they pay you back in the future

  • Stocks

Own a small piece of a company

  • Real estate

Investment in a tangible asset.

Where most wealth is created.

  1. Is the stock market risky?
  • Let professional managers manage your money. $1.00 invested in 1926 could now be between $7,000 and $32,000 today, depending on how it was invested – even through the great depression and wars.
  • Historically, stock market returns become more consistent and predictable when measured over longer time periods.
  • Smaller companies typically outperform the larger companies long term.
  1. What are your two biggest advantages of being young?
  • You have an opportunity to make these choices now that will benefit your future.
  • Start investing in a mutual fund as soon as you can – First, build $1,000 in your emergency fund, then start investing in a mutual fund.
  • Go to a financial advisor once you have your emergency fund saved. They are professionals who can help you select investments appropriate for your individual situation. Just remember all investments carry some degree of risk, and past performance is no guarantee for future results. It’s good to have someone who is helping you to determine the right investments for you.
  • Join a matching 401k from your employer as soon as you are able and max out your match with Roth IRA or a Traditional IRA.
  1. The magic of compound interest:
  • Trust and let it accumulate
  • The earlier you start, the more you accumulate

Books to read:

  • The Total Money Makeover – Dave Ramsey
  • The Automatic Millionaire – David Bach
  • The Millionaire Next Door – Thomas Stanley, William Danko
  • The Wealthy Barber – David Chilton

Schedule an intro call with Goodwin Investment Advisory.