Money Management for 18 - 26 Year-Olds with Personal Finance and Investing Productivity | Cal Hyslop MBA, University Instructor | Skillshare

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teacher avatar Cal Hyslop MBA, University Instructor, Work Harder on Yourself than Your Job!

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Lessons in This Class

7 Lessons (46m)
    • 1. Welcome to Financial Management for those just Getting Started!

    • 2. An Introduction to Personal Finance

    • 3. Why Master Your Finances

    • 4. The Art of Budgeting

    • 5. Savings Strategy

    • 6. Investment Eye-Opener

    • 7. Let's Wrap It Up

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  1. Envelope Budgeting Made Simple -
  2. Create a Personal Budget from Scratch -
  3. Core 12 Life Skills -

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Cal Hyslop MBA, University Instructor

Work Harder on Yourself than Your Job!


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1. Welcome to Financial Management for those just Getting Started!: Hi. Welcome to money management for those just getting started, where in this beginners finance course, not only will you find out why it's crucial that you start controlling your money before it controls you, thes lessons will also show you how to get more money in the bank and how to build a brighter financial future. My name is Cal Hislop, and I'll be your guide. Through this course, I have an MBA from the United States, have lived and worked in the USA and Asia and have been a university instructor since 2007 for the second ranked university in South Korea. And this is one of many crucial lessons I have compiled for you to help you become more successful and happier in life. By the end of this course, you will have your own budgeting, spread chic and the ability to start controlling your own budget, a better understanding of how and where to save your money and the ability to harness the power of compound interest, which will make your money grow exponentially. The ideal student for this course is anyone either starting out in university or in their careers and wants to take control of their finances. If you don't have a financial plan and you're not confident with how to make your money make more money than this classes for you, so start today. 2. An Introduction to Personal Finance: hi and welcome to our third lesson in our course. This core lesson is about your personal finances and how to control your money and not let money control you. I'd like to start off as usual. Our quote of the day, which is personal finance, is 80% behavior and 20% knowledge. What does that mean? It means that you don't really need to know the details. The fundamentals necessarily of finance per se. However, you just need to know Ah, few basics on how to behave, what to do in certain situations so that your money grows. This core lesson is going to start out as usual with our introduction and mystery question . Then we'll move on to why learn money management and why learn about how to control your personal finances? Next will go on to personal budgeting. We'll talk about the core basics about how to budget, and I'll provide you a Budget Excel spreadsheet so you can start the process and get a feel on how to actually create and use a budget for yourself. Then we'll talk about savings, your options for savings and what strategy maybe you should take, which is of course up to you, then we'll go into what I like to call an investing eye opener. And as you might know it, eye Opener is something that gets you interested in. Maybe there's a little bit of a wow factor, something that you didn't know. Hopefully, something that will maybe motivate you to start saving and perhaps investing and finally will wrap things up with the mystery question. Answer. So I'd like to begin by introducing you to a pretty famous book. It's called The Richest Man in Battle On. And if you look up here in the top left hand corner here, it says more than two million books sold. That should give you an idea of the success of this particular book. And what I like about this book is that this book covers a Siris of short stories that take place in and around the city of Babylon, the ancient city of Babylon, which is considered the richest city in biblical history. The book teaches strength Ford lessons that attempt to show that the secrets of wealth building or unchanging and remains still applicability today, even though they were once used in history. While none of the concepts are likely to be earth shattering for you. They do encapsulate the fundamentals that are the basics to money management and personal finance. So the question that I want to ask you is, What do you think are some of the best ways to build your wealth and what are you doing now ? Or what have you been doing to control your personal assets, your personal income, and build well for the future? One of the most interesting sections of this book talks about what are considered the Five Rules of Gold, and we'll get into all five of these at the end of this core lesson. But I want to start by introducing Rule Number one, which is called Pay Yourself First and I'm curious. Can you guess what pay yourself first means? Keep that in mind as we go throughout the lesson. Try to answer that question as we progress and you'll notice around the midsection of this core lesson. I'll bring up the first rule of pay yourself first and explain what it actually is. Keep in mind what could pay yourself first, actually mean and do you think you've done that are doing it And what do you think might be the other four Rules of gold? Okay, with that in mind, let's go ahead and go on to the next section. Why should you be interested in personal finances and money management? 3. Why Master Your Finances: So why should money management and personal finances be interesting to you? Well, have you ever questioned why doesn't university teach money management and why usually at home do parents not teach the basics and fundamentals and or the details? Of course, of personal finances, this is an interesting question to ask. Have you learned any particular classes on personal finance in university or or high school or in school? Generally? And how about your parents? Have they really sat down and talked to you about how to control your personal finances for the future? Well, if not, why not? It's so important, isn't it? Well, schools tend to mostly teach subjects related to students majors. Schools also seem to think that this is a personal choice and the responsibility of the parents. That's a mistake. Homes either don't know what to teach. Don't take the time to teach or feel that that the topic of money is taboo. That's also a mistake. Whatever the reasons are, it is still undeniable that being able to manage personal finances is crucial to a person success. So how does learning, money management and personal finance help you? Number one reduce stress and conflict, struggling to pay the bills, not having enough money at the end of the month, Not having enough money to pay for the things you need and want can really be stressful. And once you're married, stressing out about money could lead to even more problems with the relationship. Mary Couples have even reported that the number one cause of arguments, believe it or not, is money. People even get divorced because of money issues. Furthermore, financial problems can lead to health problems such as migraine headaches, cardiovascular disease and insomnia. Getting control of your finances and creating a surplus rather than a shortage of money can potentially prevent these problems. So wouldn't you want to prevent these problems and reduce stress and conflict in your life ? And how about a home home's air? Huge expenses and the vast majority of people need to get a loan in order to purchase a house or apartment. Getting alone requires a down payment. This means you must have already had a fairly large amount of cash, ready to give the bank in order to get that loan for your home. The number is typically over 5%. You do the math In addition to the loan, there are several other fees that are included, too. So at another 5% to that number, minimize death. One of your goals should be to have as a little debt as possible. Debt is money that you must pay someone else, usually on a monthly basis. So what could these include? Student loans? Ah, home mortgage. A car credit card debt. If you have too much debt than it could be impossible to save money and you could become even greater in death. This is a horrible situation to be in and imagine. If you're in this situation and an emergency happens, there's some unexpected event. How are you gonna pay for experts say that you should have around $1000 minimum saved specifically for these times because it's not that if they'll happen, it's when they're gonna happen. So be ready for emergencies. Yes, it's not a matter. As I just said, if an emergency is going to happen, it's a matter of when one will happen. You need to be ready with that $1000. Maybe you should add this to your future financial goal on your goals worksheet. What do you think emergencies may include sickness in the family, where you need to help or you may need to stay in the hospital for your own illness or you could get in a car accident, so there are dozens of possibilities that you want to be prepared for and be ready for opportunities when they arrived. Opportunities come and go, but not that often. If you're not ready or able to take advantage of a great opportunity when it comes, then you may never see that opportunity come again. This could be an amazing investment opportunity. Perhaps the home of your dreams is available at a fantastic price, but only for a short time will you be able to buy. It's hard to predict what opportunities may present themselves, but you want to be ready when they dio. If you miss that opportunity, then you're stuck where you are. Instead of going forward toward a better life, make more money with your money. One of the amazing things about having money is that your savings and investments can make you even more money. Have you ever heard the phrase it takes money to make money, and you probably have well It's true. In many ways the cash you save could be used as your own little employees who work hard for you to create more cash for you. And then that builds upon itself. That's the beauty of investing. It's a really benefit to learn the basics of investing stocks, bonds, mutual funds, investment funds. So get ready to make your money work for you. Have your money, help you live a happier life, and having control of your money will help you live a happier and more fulfilling life. There are many ingredients, the happiness, but being rich in having money really isn't one of those, however, having enough money to prevent problems enough to build a meaningful life in relationship with family and friends enough to take care of others and help family enough to grab opportunities when they come and enough to grow in life are some of the ingredients to a happy life and, finally, financial independence. Financial independence is what everyone looks for. Does this mean be rich? Well, the true meaning is having enough money to live comfortably safely and have enough to get the things that you want to have enough money to be free. Let's say this could mean being able to take a vacation when and where you want being able to help family members when needed. Being able to start a business, being able to leave your job and find a better one if needed, and not to worry about the costs while making that transition. Being able to invest in opportunities like we just mentioned having enough money and future income to easily retire when it's time. So why learned personal finance? Why Learned money management? It's simple, and there are a lot of good reasons. Number one. Reduce stress and conflict to be able to afford the home that you want. Three. Minimize hopefully, eliminate any debt. Be ready for emergencies because you know they're going to happen. Eventually. Take advantage of opportunities. Don't let opportunities pass you by. Make more money. Use your money to put into investments so that builds upon itself and makes even more money for you. Live happier life because you don't need to be rich to be happy. But you do need to have the basics and be prepared for opportunities and emergencies and finally to be financially independent to be free. So having said these eight parts on why to learn money management, let's go on to our next section 4. The Art of Budgeting: so our next section in personal finance and money management is creating a personal budget for yourself now. You may or may not have already used a personal budget, and you may or may not already know how to. But if you haven't been using one, it's really important that you start now because using Ah personal budget on a regular basis really is the first step to gaining control on your personal finances. So this relief sets the foundation for your own personal finance. But before we get there to work sheets that you're going to need to use that hopefully you've already completed prior to this lesson. Do you remember lesson number one on goal setting? If you can get out your work, she titled Goal Setting Worksheet. I'd like you to identify any economic or financial goals there on that worksheet, so scroll through the worksheet and circle any of your goals that happen to be money related. Then I'd like you to consider. Are there any additional financial goals that maybe have popped up in your mind that you haven't thought about since the previous goal? Setting lesson? If so, right? A couple quick notes and on this goal worksheet and make sure that you classify in the additions into 135 or 10 year goal projections. Next, go ahead and get out some paper and pen. We're gonna need to write a few things down. First, let's go over three particular things I want you to consider quickly. Those are what are your current sources of income. You probably have one, but who knows? You maybe have more than one. What do your spending habits? What do you like to spend your money on these days? And let's take a general look at all of your expenses, including necessities and including just the things you like to spend money on for an entire month's period. First of all, what are your current sources of income? That just means what money is going into your pocket list those different sources on piece of paper. Now do you have a part time job? You have a full time job. Do you get any money from parents or from any other source? And along with those sources, list the monthly amount that you get from each now? If it varies month to month, go ahead and put down an average. Next, I'd like you to get out your weekly expense tracker up here. I asked you to track yourself over any given week. I wanted you to put in the expenses that you have incurred for each day of the week Monday through Sunday. Get that out and let's take a look at as you scroll through it. Do you notice any patterns of spending, which expenses do really need? Which expenses would you consider essential that you really can't do it out? Take a moment, look at those expenses and make a note somewhere. You can either make a note on the right or left, but identify those clearly those expenses that are necessary, what should be left over or what you would consider unnecessary. Now take a close look at those considerably unnecessary expenses. How much do you really need those? Do you think that you could possibly do without those expenses or minimize them in some way ? That should be one of your goals Now is to somehow minimize or just completely get rid of these unnecessary expenses. Although, of course you want to keep some because what's the fun in life without having some fun, right? Next, I want you to be able to identify and list on that piece of paper all of your expenses for a month. In essence, this is the money out of your pocket. Try to list each one is best possible. And don't worry. Later, you might think of a fume or and just add them to your list. Include the items that are on your weekly expense tracker and any other items that are not on there. Because, of course, you probably have mawr expenses that you didn't incur over that last week. By now, you should have a pretty clear idea of all of your sources of income and a pretty a clear idea of all of your expenses for any given month. Next, what I want you to do is get out the Excel spreadsheet that I've supplied for you. It's your personal monthly budget Excel spreadsheet. Look, something like this, what I want you to do is take the time and fill this out as best possible. Put in your income list as many expenses as you possibly can. Now, if there any line items on the left that aren't there, but you want to put in. Go ahead, change the Excel spreadsheet and finally, at the bottom, we're going to see what's the difference between your income and your expenses. And what's the difference between your expectations and your actual spending? Let's do some of this together, so you better understand this particular worksheet. I've opened up my copy of my personal monthly budget. Now it's blank because I'm gonna go ahead with you and try and fill in some of the categories. Let's work with income first. Now, assuming that you're a university student with a part time job just for demonstration purposes, let's assume that you are making about $30,000 a year from a part time job. You're working hard to pay your bills and save money, so that's about 2000 $500 per month. Do you get any money from your parents? What say you're lucky and you get 500 per month? Congratulations. Now, I'm not going to put anything else in here. If this applies to you, go ahead and fill in these sources of income for yourself. We're gonna assume now that this particular person is making $3000 per month not bad, especially for a student. What about expenses? Maybe you don't need to pay for tuition. Perhaps you're lucky enough to have a parent pay for it. Um, let's go down to some obvious stuff. Maybe you need to pay my rent. Let's say $300 for rent and you have credit card payments. You know who doesn't? Let's do another $300 for credit cards. Ah, food. $200 per month. Loan payments? Maybe not. Computer equipment, Dorm books. Maybe, Maybe not. Let's see, Let's go down to your phone bill. How about $50 a month? Maybe you have a car, Let's say $300 a month fuel, $50 a month. Unhealthy habits. You know, entertainment. Let's have a little bit of fun. Let's go. $100 a month and unhealthy habits. I don't know what those are. It depends on you. Let's say $100 a month. Maybe you need to buy a few gifts every once a while $50 a month. You want to buy some clothes? Let's do $50 a month laundry, $25 a month and savings. And this is important. You want to put money into savings. It's crucial we'll talk about that pretty soon. So let's say $200 a month. Okay, lets go back up. Maybe we have a few more expenses to make this a little more realistic. Let's say school supplies $50 a month. Groceries. $100. Month cleaning supplies, among other things. $50 a month. Utilities $100 Month. Internet, $50 a month. Travel. Who knows where, Ah, $100 a month, $25 a month on average car repairs. That's put in just in case for emergencies, $25 a month. You're gonna get sick every once a while, let's just say $25 a month and let's leave it that. So if we compare our total income $3000 coming into our pockets and then our expenses are projected expenses $2250 per month, we end up with extra money about $750 per month. This is our projected income. This is our budget now, realistic or unrealistic, that will depend on your own situation. Now that you have your projected amount, you'll go through the actual month and put down. How much did you actually make? Maybe you didn't get to work as much. Maybe there are a few issues. 2000. But we can still depend on good old mom and dad, right? So let's put in 500. Now we're at 2500. Is the actual amount we made for? Let's say this was in January, but your expenses really could change quite easily from your expected amounts. What we do. Maybe housing rent is going to stay the same credit card payments. Maybe you had to purchase something bigger, so let's K 400. Maybe you're hungrier than usual in the month of January and you did extra stuff. You spent a little extra money. You spend more in school supplies. Groceries was more than expected. Housing supplies was about Same utilities went up because it's cold. You had to put on the heat 150 your phone bill. You talked a lot. Let's say 70 Internet. It's about the same. You traveled a little bit more because it's the holidays. That's a 250. That's a lot. Car payment is still the same. Car insurance is the same. Car repairs. Maybe had an issue with your tires, you had to put down some extra money on a new set of tires. $500? Oh, no, that's that emergency. I was talking about earlier fuel. Let's say, because you're traveling a little bit more of ST 100 entertainment was about the same unhealthy habits about the same Maybe medicine. You're lucky or you were. You felt great. You didn't have to buy any medicine. No doctor visits gifts. It's the holidays. A little bit more clothing. Zero You didn't spend any because you're already buying other people's gifts. Laundry. You got to stay clean. Let's say about the same. And we always gotta put in at least $200. So now, comparing our projected to our actual mount. Now we're 700 twin dollars in the hole. We've spent too much. Maybe we have credit card debt. This is the purpose of creating a budget. As you create a budget, you're going to be able to better control your expenses based on your expectation of income . That way you don't get deeper into debt and you're still able to transfer money to your savings and investments. So this is a really crucial spreadsheet toe have make sure that you take the time to understand it won't take you very long at all. But take the time to put in the right line items for your income and your expenses so that you can have better control over your personal finances. So now that you have a better idea of your income and your expenses, fill out this personal monthly budget and continue to do so on a regular basis. Go ahead and make this homework for yourself. You'll appreciate that you took the time and effort to do so. So to recap this particular lesson, we've been able to identify your economic goals. You were able to identify money going in and going out of your pocket. You're able to identify spending habits and things that are necessary and unnecessary. You can now adjust your expenses to reflect your economic goals. You can minimise unnecessary expenses, and, most importantly, you're able to control all of this to your own personal budget. So that does it for this lesson. Let's get ready for the next one savings strategy 5. Savings Strategy: Okay. The next section in this particular core lesson on personal finance is saving strategy. What should you be doing with the money that you're saving? And what do you think is the best approach to go about saving your money? So the first question I have for you is how much should you be setting and how often do you think you should do it Once a month, every paycheck Once a year, I'd like to introduce you to a quote that I thought had a fair amount of impact. My first read it, and it goes like this. Poor people spend their money and save what is left. Rich people save their money and spend what is left. Now it might seem obvious that this is an important thing to do. It's unfortunate that people will go ahead and spend their money and then won't really consider saving until they've gone through all of their expenses. And quite often there's nothing really left over because people tend toe live or spend at their means or above their means, which means people will usually spend as much money as they have or even spend more money than they have which is through the use of credit cards. However, what you really want to be doing is saving money first, and then using your personal budget, you'll be able to spend what is left over on the necessary items and then possibly on other items, that arm or for fun and entertainment. So take the advice of the rich. You want to save your money first and then spend what's left over. So let's go back to the Five Rules of Gold in the book. The Richest Man in Battle on earlier, I asked you to try and guess what does pay yourself first really mean The first law out of the Five Rules of Gold goes like this. Save no less than 10% of your income. Put it away before you pay any expense. What that means is on payday, very moment, the very day that you get paid from your job, take 10% minimum and put it into a savings account, or put it somewhere that you will not touch it or, better yet, cannot touch it. Make note. Do not ever pay bills or other expenses. First, it might seem impossible to do for some people because they think they can't afford it. However, everyone is able to fairly easily adjust to living with a little less each month. And you will be so happy to see how quickly your savings increase as a months progress. Kind of an obvious answer to this question. When should you start saving 10% or more? When should you start paying yourself first? All right, give yourself a round of applause. You probably guessed now is the best time to start. Now that you have a clear understanding of the first rule of gold, pay yourself first. What do you think you should dio? How about take a moment, look at your goals, worksheet and adjust any financial goals, Perhaps adjust your savings goals. And now that you know how to use a personal budget and you have an Excel spreadsheet, maybe keep in mind the line item at the bottom for personal savings, how much money are you going to contribute to your savings and next? What should you dio with the money you save? Actually, this is a question that we're gonna answer in our next section. But I want you to start thinking of this What would you do with the money that you say? Did you put it in a piggy bank? Should you put it in a savings account, Should you invest well, Answer that question soon to recap our savings strategies lesson. Now we know mawr of the importance of having a savings strategy. Remember, don't do it. The poor do do with the rich to say first. Spend later. Take heed of the first rule of gold. Pay yourself first and how much. What's the minimum? You should pay yourself first. Each time you get income, make sure it's a minimum of 10%. Okay, that wraps things up. Let's get ready for the next lesson. Investing eye opener. 6. Investment Eye-Opener: Welcome to the next section. Investing eye opener. So previously I asked you a question. What should you do with the money you save? Would you keep your money in a piggy bank under your mattress? In a bank? In the stock market? What would you dio? What about investing? Do you already have any particular investments? And what have you invested in before we go further with investing? I have a question for you. It's referred to as of the magic Penny. Let's say you have a choice. Two choices. Actually, Choice number one is just take $2 million. Imagine Right now you could take $2 million do with it as you choose or take the Magic Penny. And this Manja Penny does something special. What it does is it doubles its value every day for 30 days. Well, of course there's got to be a catch, right. Why would we call it the Magic Penny? Well, if we took that penny and double that every day for 30 days, the value would come out to be over $10.7 million. Definitely better than $2 million Right? This example is an illustration of something called compound interest. Wikipedia defines compound interest as the addition of interest to the principle sum of a loan or deposit or, in other words, interest on interest. Which means if you invest money into something, you expect a rate of return. Let's say 5% as time goes by and you make interest on your investment. You also start to make interest on that interest, and it just gets bigger and bigger as time goes by, Well, Warren Buffet, with an estimated net worth of over $76 billion someone who is unquestionably one of the most successful investors in history said that his wealth comes from a combination of three things living in America, some lucky jeans and compound interest. Sure, America's great because it's considered the land of opportunity. And, yeah, DNA has something to say. His personality is very investment driven, but number three what? I want you to focus on his compound interest. It's compound interest that made his money make money, and Albert Einstein had something to say about compound interest to, he said. It's the eighth wonder of the world and more specifically, and take note, quote He who understands it earns it. He who doesn't pays it. If you don't take advantage of investment opportunities, you may end up paying interest instead of earning it. Let's go through one more scenario, and I really quite like this one. Let's suppose that there are two friends who just graduated high school and have entered a university. We'll call them Jake and Katie, about 19 years old. Each, although friends, they decide to take two different paths regarding finance. Katie decides she'll get a part time job and invest about $2000 every year from the age of 19 to 26 earning a compound interest rate of about 12%. Once she's 26 she stops completely and her investment continues to make. Money continues to make interest in compound. On the other hand, we have Jake. Jake decides not to invest anything at all. Instead, he wants to enjoy his time in university. After he graduates, he gets a job. Then he decides to start investing. At the age of 27. He does. The same thing is Katy did. He invests $2000 a year and continues to do that for another 39 years. Once Jake and Katie are retirement age around 66 they reap the rewards of their investment . At this point, Jake has invested a total of $78,000 over a 39 year period, and Katie, on the other hand, invested a total of $16,000 over an eight year period. Although she did start seven years earlier. Once they're 66 years old, what do you think? The differences between the gains they've made through these investments? Katie has made a whopping two point to a $1,000,000 at this point. How about Jake Onley? 1.5 million? That's a stark contrast, and that's the power of compound interest. And in order to understand a little bit more about compound interest, you want to understand the two types of interest. There is simple and compound, and both are available in investments. Simple interest is a fixed rate. Let's say you have $100 and 8% interest, no matter what. Over time, you're going to make $8 on that investment every year. However, with compound interest, you'll make $8 the first year, and then you'll make another 8% on the $108 you had the second year, and it continues to grow, so that's a no brainer, right? You want to go with compound interest to make it a little clear? Let's look at a few examples between simple interest and compound interest, and here we're going to invest $10,000 in simple interests and $10,000 in compound interest . Both of these, at the same rate of 8% here in year one from $10,000 we get $800 return with $10,800 at the end of your one. We have the same thing over here in the first year with compound interest. But beginning in year, two things start to change. The difference is, although in simple interest, we still get the same rate of return 808 108 100 every year. What changes is we're making interest on our interest with compound interest notice. The first year's return is $800 the 2nd 864 the 933 in 1008 and it just continues. Imagine doing that over 20 or 30 years. Imagine continually re investing money. So where should you invest the bank, the stock market well, the two most common places to put your money that have compound interest, our banks and the stock market. Which one do you think is considered the best option in the bank? You have other options, such as checking accounts, savings account money market account and certificates of deposit, respectively. Usually, a checking account will be 0.5% as well. A savings account money market is twice that at 1% and a certificate of deposit is a full 1%. Not bad, right? Well, let's look at the stock market. On average. In America, at least, the stock market returns 8 to 10% per year. However, banks do guarantee these interest rates, so if you really want to play it safe, put your money in the bank. However, the stock market may have an average 8 to 10% per year return, but it's not guaranteed. It really depends on the economy and how things were going. However, over the long term, the chances are you'll get that 8 to 10% return, so bank or stock market well tell you what the rich don't keep their money in the bank. There's a calculation. Or let's say there's a financial trick called the Rule of 72 this helps you understand the difference between 3% 4%. 5% return because there's just sort of numbers, right? Well, the rule helps you understand how long it's going to take for your money to double with compound interest, and it's a simple equation. Simply divide 72 by the interest rate. For example, if the interest rate is eight, it's 72 divided by eight. So where to invest? Banker Stock Market? Well, let's take another look at the chuck ings savings, money market and certificates of deposit. How long will it take for you to double your money checking and savings account? 1440 years? That's kind of a long time. Take care of yourself. Money market account. 720 years. Still a huge amount of time. Certificate of deposit. 72 years. You might make it long enough to see your money double, but what about the stock market? Let's take the 8% divide 72 by eight, and how many years will it take? Onley nine years to double your money again. What would you choose? So I have the same question for you as earlier. When should you start investing? Yes, you guessed it right now. Take your money. Put it into something that you trust. That you've done your homework and that earns compound interest. Now, I'm not here to give you advice on exactly where to put your money. So I suggest do a little research. You confined indexes, mutual funds. Other investments that earn compound interest in are considered relatively safe. So the next time you have some free time Google investments that earn compound interest and go from there. So to recap this lesson investing eye opener we took a look that should you save or invest investors? Probably the wisest choice. We explained the difference between compound interest and simple interest. Of course, compound is the way to go. We look at the differences of compound interest in banks and the stock market. We took a look at the rule of 72. This simple trick. This simple equation will help you understand how long it should take for you to double your money. And we answer the question. When should you start investing now? Great. That's it for this lesson. Let's get ready for the final section of this core lesson. Mystery question answer. 7. Let's Wrap It Up: here we are at the end of our core lesson on personal finance, and we're going to end as usual with mystery. Question answered. Now, if you'll recall, I asked you earlier to think about the Five Rules of Gold. I gave him the first, but I was curious if you could guess any of the other four. And I'm sure you remember that the first rule of gold was pay yourself first. Here a person should save at least 10% other income for the future, which means every time you get paid, every time you get a check from your job, take 10% minimum and put it into savings or invest it. So what are the other four? Well, number two is investor money in a way that your money will simply make more money. We just talked about this. Can you guess compound interest here? You put your money into an investment that earns compound interest and the money you make on interests will start making interest. You have a snowball effect. Essentially number three Onley. Take investment advice from those considered professionals in the field. I'm not a financial professional. However, the rules of gold here or not mine, but those that have been passed down over the years by professionals. These rules are timeless. And when it comes to the point where you're seriously thinking about investing in something , don't rely on advice from family. Don't rely on advice from friends. It's good toe. Listen to them. But when it comes down to actually making a decision, unless your family or friends or professionals seek out the advice of a financial professional now the last two rules are things not to dio number four. Do not invest in areas that you're not familiar with or not approved by a professional in the field. If you don't understand the tech industry, maybe don't invest in it. If you don't understand the oil and gas industry, maybe don't invest in it unless you do your homework. Perhaps a good example of something that you are familiar with is Coca Cola. The world is familiar with Coca Cola products, and these products probably aren't going anywhere, so they seem to be a pretty safe bet. Maybe take some time and learn more about Coca Cola Company and number five. Never invest in something that promises incredible returns far greater than average and never invest in something when pressure to do so by someone else. The first thing that comes to mind here for me is Bitcoin. Everybody was jumping on the bandwagon, expecting to make huge gains while watching Bitcoin continuously rise and what happened? Boom, Bust. Most people who invested in Bitcoin and other similar things probably were not obeying rules four and five Remember the old saying, If it seems too good to be true, it probably is. Guard your money and Onley put it into investments that you're comfortable with and have a decent level of understanding about. So keep in mind these five rules of gold. If you follow these throughout the rest of your lifetime, you're definitely well on your way toward building wealth. And don't forget, become a teacher. Take what you've learned here today and pass it along to family and friends. Perhaps help someone with their personal budget go over the Excel file with them. Teach someone about compound interest. Tell someone this story about Jake and Katie and the difference from investing when you're 19 compared to 27 regarding compound interests. Have funds spark a conversation on investing in general, who knows? As you become the teacher, you might also learn more. And I would very much appreciate it if you would give this course rating. That way, you'll be helping others to. Okay, ladies and gentleman, I really hope that what you learned in this lesson is of value to you and that you're able to take it and build your wealth as the years progress. Don't forget to continually update your goal sheet and continually update your budget. Take care and see you for the next lesson.