Intentions Are Good, But Timing Is Everything
An essay about my introduction to financial literacy. Written in the fall of 2019 for an English class.
14 December 2019
In 1997, I began my service for The Church of Jesus Christ of Latter-Day Saints in the Utah Provo mission. One preparation day, I walked into a local branch of my bank to make a withdrawal. “It looks like you’ve had this account for a very long time!” the teller who was assisting me said enthusiastically. Indeed, I had. My parents had opened the account for me when I was two years old and they were still students at Brigham Young University.
In the early 1980s, our family moved to Louisiana. Prior to the advent of the Internet, it wasn’t easy to deposit money into a bank three states away. When I was around the age of ten, my siblings and I were taken to a local bank and savings accounts were opened for each of us. My parents deposited fifty dollars in each account and challenged us to save ten percent of any funds we obtained. The only money we had to save at that age was given to us as gifts or what we earned mowing the lawn. Rather than riding to the bank and making a savings deposit, I would end up at the corner store to reward myself with treats and some arcade time. I clearly remember one Saturday afternoon riding to the Circle K with two fresh ten-dollar bills from my lawn labors. Two hours later, I was broke, full of sugar, and once again had failed to get my initials on the score board of whatever video game they had.
Our parents had made attempts at encouraging us to foster saving behaviors. I understood the reasoning and the math, but when your savings account offers less than a two percent annual return, it is impossible to get excited about the prospect of exercising that much self-control only to be rewarded with an extra two dollars in your account twelve months later. These early lessons failed to take root because I was a typical impulsive child, but more importantly, I now know the wrong instrument was being used to teach the lesson. I needed something that would make saving for the future a more active endeavor. Unfortunately, I wouldn’t be properly introduced to the right teaching instrument for another thirty-three years.
In the intervening years I served a mission, dropped out of college, got married, got into debt, got out of debt, bought a house, and struggled to maintain some semblance of adulthood. Somewhere along the line, a desire to complete my education took root. In the fall of 2018, I opted to enroll in the Pathway Connect program as I knew there would be a great spiritual component. My initial judgement of the program was that I would have to sit through a number of remedial courses for three semesters: three religion courses along with Life Skills, Algebra and Personal Finance, and English. The experience has been much more enriching than I had thought possible!
As I’ve journeyed through the coursework, my current perspective in life was enhanced by a reliance on the Holy Spirit and old truths were made new to me. In the first semester, as we read the account of Jacob in the Book of Mormon, I learned again that God wants us to be successful. “Before ye seek for riches, seek ye for the kingdom of God. And after ye have obtained a hope in Christ ye shall obtain riches, if ye seek them … for the intent to do good.” In the second semester Algebra and Personal Finance course, the review of exponents emphasized how to use interest in our favor by making good choices and earning interest rather than paying it. For a financial book review, I chose Rich Dad Poor Dad. Its fictional accounts facilitated an introduction to that financial instrument that would finally catch and hold my attention: the stock market! While there are many ways to invest in the stock market, anyone can participate in the successes (and failures) of public companies and our financial markets through simple index funds. You don’t need a financial advisor to invest in your future, and the earlier you start the better. Thanks to modern technology, investing in your future has never been easier!
The larger portion of the financial education I have today was information I had been previously exposed to multiple times, but the timing wasn’t right. It frustrated me thinking about the intentions of those who shared the information with me in my youth, but not at the times in my life when I really needed it, such as after high school, as a return missionary, or a newly married husband. Rather than dwell on that frustration, I have turned it into a motivating force, becoming an evangelist on the matter. I am constantly starting conversations with everyone from family, friends, and random strangers about basic financial education, planning, basic index fund investing, and more advanced topics with those who are interested. What I have learned and share as investment advice is simple: open an individual retirement account (Roth or Traditional IRA), pick a simple index fund, and invest no less than twenty-five dollars each month, working your way up to investing at least ten percent of your monthly gross income. The earlier people start the habit, the more time they have for their investments to grow. This is why Albert Einstein is quoted as having said that "compound interest is the most powerful force in the universe."
Today, whenever I am about to purchase something, I ask myself “Do I really need this, or will this money be better put to use in my investment account?” If I had been introduced to basic index fund investing as a return missionary in 1999, and developed that mindset at that time, I could have easily been on my way to a very comfortable retirement. Starting that same journey at the age of forty-three takes significantly more work but can still be accomplished. Regardless, the amount of freedom that has come to my mind being engaged in the endeavor is priceless, and working to help others avoid the same mistakes is tremendously gratifying. I hope my intentions will be timed well to help others.
In the past year, my life has changed dramatically because of a simple perspective shift. I have now acquired the savings mindset that my parents tried to instill in me at an early age. Throughout my life I have tended to learn through my own experience instead of through listening to the advice of others. I think this has more to do with my attention span and levels of interest, as opposed to just ignoring what people have told me.
I have learned that in many ways it is easier to talk to people about politics, religion, or sex, as opposed to finance and investment. Young people, meaning minors, just aren't interested. Like most people, they think it's a boring topic and it's not something they think has anything to do with them at this age. Young adults don't think they can start investing because its too complicated or they don't have enough money. If they are interested but don't take action, they quickly get distracted by life and never develop the habit. Having been in each of those positions, I can fully relate. I can remember in youth knowing that certain friends were going to be much more successful than others because they had purpose early.
So I'm searching for ways to peak the interest of the youth, to help spark an understanding, an interest, and a purpose, and to help parents encourage their children. In my quest I've come across the Custodial Roth IRA, an investment account most people are completely unaware of. I'll link to an article about that topic shortly.
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