The Seven Steps to Avoid Being a Money Moron

The Seven Steps to Avoid Being a Money Moron

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So there you are, at your companies Christmas party. You’re drinking terrible punch and snacking on food that was bought two hours earlier at a Costco. After a few minutes, a couple of the guys from accounting come over and start to chat you up. Normally, you’d scoff at the bean counters, but as it’s Christmas time you’ve felt a little bit of a pinch in the budget area. As such, you think that maybe it’s high time you listen to what these guys have to say about money. So you try to follow the conversation, but it’s “risk-adjusted return” this and “asset allocation” that. Suddenly, you make some comment about how you think the stock market is overvalued because your grandparents told you to stay in bonds.

Congratulations, you’re now the money moron.

Folks, no one EVER wants to be the idiot in the room. Fortunately for you, I’m come up with seven steps that the money geniuses in the world take to make sure that they’re taken care of financially.

Folks, I hate to break it to you, but you’re never going to get rich by pinching pennies. In fact, I dedicated almost 2,000 words to the subject. The fact remains that if you want to achieve wealth, and I mean real wealth, you’re going to have to do more than cut out lattes for a couple years. So how, you might ask, do you actually achieve this dream of becoming wealthy enough to tell pretty much anyone to fuck off?

You have to increase the amount of money you make. And while yes, there’s lots of data to support the fact that more education tends to lead to a higher salary, the Forbes 400 are not a group of men and women who toiled away at a salary for 35 years.

No, instead, they got out there, they started numerous business, increased their ability to earn exponentially, and made it so that their equity and earnings allowed them the kind of lifestyle they wanted (be it models and bottles or giving all their money back).

They say, “Imitation is the most sincere form of flattery”, so get out their and copy what these guys did to get rich! Starting a business is the “most” surefire way for you to attain financial freedom. Not that it comes without risks, but what’s more risky to you: starting your own business or wasting 35 years of your life working for someone else?

… I know where I land.

What’s my biggest asset? Besides my good looks, incomparable wit, and relentless modesty, it’s far away this blog. If you’re interested in starting you’re own blog in an attempt to get yourself out of the rat race, be sure you check out how to become to most bitchin’ blogger in the universe!

There’s a very typical life path that’s sort of expected, at least here in the United States. Grow up, go to college, grab a job, maybe a wife/husband, pop out 2.2 kids, and retire. And one of the main problems of that is the one time in our life that we don’t have to worry about making mistakes (i.e, before kids) is the one time we have the least amount of money, and therefore some of the highest financial risk.

After all, it’s hard to convince anyone that a 23 year-old straight out of college knows what he/she is doing when starting a restaurant, opening a bookstore, or starting their own magazine. But the main issue is we, as a generation, have been conditioned to think that we need to hold onto our job for dear life in order to be “successful”.

Well, fuck that.

Dear lord people, use what youth you have! The time before you have kids is the time you should be taking to make mistakes and take risks! So gamble a bit of money on that small cap stock, try your hand at making cupcakes for a living, and maybe, just maybe, someone will want to read your magazine about gardening techniques for Arizona!!! You’ve got something to lose, but not nearly as much as you will later in life!

Ready? Ok, here it is:

Revenue – Expenses = Income

There’s this misconception that there is a lot of math that’s required in finance, but really, even the tough stuff isn’t that bad. It’s not like watching an episode of The Big Bang Theory, which for me sometimes might as well be in Greek.

No, at the end of the day, this is really the only thing you need to understand: If you want to keep more of your money, you either have to make more of it, or cut down on where you’re spending it. Frankly, the easiest thing to do is just to spend less money, but there’s an inherent problem that should be obvious:

So remember; you can budget till you’re blue in the face, but getting that revenue up (business, higher salary, side hustle, etc.) is what’s REALLY going to make a difference!

While I’ve said numerous times that a million budgeting tips are never going to be enough to make you vastly wealthy, there is a VERY good reason for you to have a budget. And that reason is simply to make sure that your expenses aren’t getting away from you.

So when you’re making your budget, don’t focus on reducing the small things (like lattes) by $5. That shit won’t do anything for your bank account in the long term. But if you can lower your rent bill by a couple hundred dollars a month, then go for it. If you can kill your cable bill and rock some Netflix instead, then take the plunge. Look for really big wins in your budget, because those hundreds of dollars a month are the ones that are going to make a huge difference.

I’ll be the first to tell you how much negotiation sucks. To have to go in there and fight with someone tooth and nail over the price of a product is not my idea of a good time. And I always, ALWAYS leave the negotiating table in one of two ways: I feel like I either left money on the table or was working with someone to hard-headed to move on price. This is one of the main reasons why I HATE car salesmen.

But if there’s one thing I’ve learned about negotiation, it’s this: no one else will do it for you. So you need to get to a point where you’re comfortable at least asking for lower prices on goods and services. Maybe not every time you go to the grocery store, but you get my point.

The other part to step five is just because I use the word “Fight” doesn’t necessarily mean that I want you to negotiate. After all, a simple 10 minute search on Google can save you a buttload of money. So don’t just dive at the first price you see; be sure to take a few minutes and do some searches. Doing so can really save you some big bucks!

Here are some ways that you can start fighting for every last dollar:

Ebates – This one is a no brainer for you online shoppers out there. You go to ebates.com, click on whichever deal strikes your fancy (I’m looking at the 8% back on Nike), shop, and get your cash back in a matter of 2-3 days. For stuff that you want. That you already going to buy. This is an obvious win, people. Check it out today and get your $10 bonus!

Sofi – It’s often quoted by researchers much smarter than I that the next big debt bubble in the U.S. is student debt. Don’t be a part of the statistic when the bubble pops! The average student debt consolidator saves close to $300 per month on their loans when refinanced through Sofi! And that doesn’t even consider all the other loans and wealth management they provide. Check out Sofi today and start cutting away at those student loans!

Ask anyone who has a child this question: “When is a good time to have a baby?” I guarantee you that they’ll come back with, “There’s really never a good time.”

You’ll find that the same thing is true for starting a business. There’s really never a convenient time, but from everyone I’ve spoken to, they’ve only ever said this: I wish I had started earlier. The earlier you start, the more time you give yourself to work out the kinks, learn the new accounting system, find out what your customers like, and find a way to complete a sale.

So remember, when thinking about the best time to start raising up that revenue side of the equation, remember: the best time to start was yesterday. The second best time is right now.

Guys. I love money. I love the way I feel when I have it. When I have more of it, I feel better than when I have less. When I spend it, I feel bad. And when I don’t have any, I feel like shit.

But there’s a fundamental understanding about money that I’ve developed over the last few years that I think everyone could benefit from, and it’s this:

Don’t ever forget that money is only important because it allows you to do things for yourself and the ones you love. Though I’m sure it’s great to see that $1,000,000 in your bank account, or to see your net worth go from 8 to 9 figures, there will be nothing better than taking your wife/husband to that tour of England because it’s what they’ve always wanted. Or seeing your kids do a super cool science project, because you can afford to send them to the best schools. Or going to Vegas, and not having to worry about spending too much on a room.

It’s the opportunities, not the number, that makes money so important.

If you’re going to avoid looking like an idiot in front of friends/family/co-workers when it comes to money, then these 7 steps are a really good place to start. Obviously, this won’t allow you to talk about the Fed or the stock price of Apple with much finesse, but at least you’ll know how to talk about your money! Remember, to avoid being a money moron, you must:

1. Own some sort of business/stock/equity
2. Use your youth and take advantage of time
3. Memorize the only equation that matters
4. Budget like a Bad-Ass
5. Fight for the lowest price on all purchases
6. Start Yesterday (business, investing, etc.)
7. Don’t Forget Money’s Purpose

And just in case you’re nervous about this article not being enough, here are some other popular articles about raising your financial IQ:

Are there any other basics to money management that should be mentioned? Am I a money moron for missing one of them? Comment below!

Keep trying to crack the code,

Paul Andrews

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