“Money Smarts” for Young Teens by yaofenjin


									                                             “Money Smarts” for Teens
                      Written for teens but can be a helpful resource for parents, teachers and other adults.
               A parent teacher guide has been developed as a companion piece for this book. Contact us for a copy.

                                     Chapter one             The Beginning is Now
        True financial freedom means not worrying about money. Today’s choices do impact your life, both now and in
the future. If you could save yourself 10-12 years of work in the future – have more time for fun and not have it cost you
anything now; wouldn’t that be great? You can.

                                     Chapter two           Jason and Brittany
        You may not be there yet but many teens dream about it. We look at the “real” cost of a $10,000 car. This side-
by-side comparison of two lives demonstrates how much one car really costs. Learn a better way.

                                    Chapter three More Secrets of a Happy Life
        Develop self worth from within instead of boosting our egos with material things.

                                       Chapter four             Colleen’s Dilemma
        A thirty year old reviews her life and looks back at her mistakes. After few quick calculations and she realizes
how a simple change in her lifestyle will pay off. She realizes how she was ‘suckered in’ by business ads. She also learns
an easy way to gain a million dollars.

                                    Chapter Five      Where do we go from here?
       Some tips to get started. Some suggestions on how to become your own person, become wealthy, and have friends
who support and affirm you.

              Chapter One

        “The Beginning is Now.”

What you do now can change your whole life!

      Some adults have to work almost all their lives. Others get to choose to stop working
sooner because they can live without a job. They take up hobbies and interests they enjoy. They
enjoy their freedom longer and the difference began while they are young. Some have fun
enjoying an extra 10-15 years of freedom.

                         I OWE - I OWE – IT'S OFF TO WORK I GO

     You don’t get to decide at age 45 to quit work unless you plan ahead…… Many people
can’t afford to retire early. They are trapped into having to work longer. Some people are able
to retire early but choose to work because they love their work. They know they have the
freedom to choose to retire at any time.

      Let’s learn how to play the game of financial freedom.

      Later you will learn who your opponents are in this game. You'll have to learn to
recognize them as we go. I won't tell you.

      The object of the game is freedom. Do you want to be free to choose for yourself?

        What if you could do everything you want to do now and still be free to have fun for an
extra ten years of your life? Would you like to learn some secrets to enjoying life now and later
in life too?

      There are a few simple secrets. They don’t cause you grief now. With these secrets you’ll
  be able to make better choices for yourself and get what you really want in life.

                                    Check out these choices.
                                     Which do you prefer?

      A)           Work 40 hours a week for an extra 10-20 years just to pay off bills.

      B)          Be free to retire young if you want and do what you want for the rest of
                  your life.

      If you were free to do anything you wanted would you want to….


                                        PLAY SPORTS?

                             WHAT WOULD YOU WANT TO DO?

      Imagine you are age 50 and do not have to work anymore to pay bills. Write down the
things you would like to do with your life then.

                            Become tired working to pay others


                            Be free to do as you choose
                                It’s up to you.

                           Frequently Asked Questions

Q. Why must I decide now?
A. Because to be able to retire early you need to prepare early.

Q.Is it hard to do?
A. Not if you really want it. In fact you may gain some attractive benefits.

                                      Chapter Two

                           “Jason and Brittany’s Story”

      Jason and Brittany, like so many teens, had no idea how to buy things. No one showed
them the true cost of spending. The cost of pay back is the first secret to learn in you path to

     Handling money is a game. Freedom is the prize for those who have learned to play the
game well.

      Salespeople and businesses make money when you buy. Advertising can persuade you to
spend your money. They win when they sell stuff to you.

             Using “Money Smarts” now, will allow you to be able to travel the world if you
             wish. One goal is to avoid the pressures exerted by business and by peers. Peers
             may have already been persuaded by advertising to spend money. Ads are
everywhere, on-line on TV in magazines, on posters etc. They are designed to change your
thinking so these companies can get some of your money. When they do they win.

      Companies make it easy for people to buy-now-pay-later. That’s one of their tricks in this
game of success. Another is to advertise so much you think you want to buy their stuff.
(brainwashing by advertising really works for their game plan)

        Borrowing money to buy something now with the promise to do or pay later limits your
future. It's not always a bad thing, but you need to become aware of how it works now before
it’s too late.

      The second secret is to understand the length of time one has to work to pay for today’s
purchases. It can take away the ‘fun’ out of buying new things just to say you own them.
Beware of the other team’s buy-now-pay-later plans.

      The third secret is that your pay back doesn’t stop at the end of the loan!

     If it was only the amount you see on paper it wouldn’t be too bad, but a hasty,
unnecessary purchase has consequences far beyond the mere money you pay for something.

         The following example will show you the ‘real’ cost of a used car.

       Jason and Brittany are both 20 years old. They earn the same wages. They are both
single, both have similar living expenses. The difference is one buys a car, the other doesn’t.

       Jason is attracted to a sports car on the used car lot. This car is a few years old and he
believes he is going to be smart and talk the salesman down from $12,000.00 on the sticker
price to $10,000.00.

      Jason gets the $10,000 price and is proud of his financial savvy. After all Jason did save
$2,000.00 by bargaining and he figures; that has gotta be good, right! …We’ll see.

      Jason signs an agreement to purchase the car on credit and will pay $229.00 a month for
five years to pay off the $10,000 including interest and sales taxes. Now he has a nice looking
shiny sports car to drive!

     Brittany doesn’t buy a car and already Brittany has more freedom. Her freedom is
     knowing that she doesn’t have to make payments for five years.

      Jason must work to pay the loan.

      If Jason stops paying the loan they’ll repossess his car. Basically Jason has
given himself a 5-year commitment to pay on his car loan. He really doesn’t have the
freedom to stop work unless he sells the car to pay off his loan.

                                                               Centuries ago there were
                                                       such things as ‘debtor’s prisons’.
                                                       Jails where people were locked up
                                                       for not paying their bills. The modern
                                                       version of ‘debtor’s prison’ is a state
                                                       of mind. It’s the constant worry that
                                                       people feel when they have to work
                                                       too hard to keep their bills paid.

Today we don't have debtor’s prisons but there are penalties for those who lose at the credit
game. It's like a penalty box in a hockey game. When your credit payments and bills
combined chew up most or all of your income, like the hockey player who has to stop playing
while in the penalty box you'll have to stop buying new items due to lack of money and/or
credit. Unlike the hockey player this penalty may last for years, It starts in a small way by just
spending every dollar you own. Soon after that people begin to borrow money from others to buy
things. Never spend more than 90% of your income and you'll avoid a lot of grief.

      Jason spends money on car insurance, gas and car maintenance such as oil changes, tires
and repairs.

      Brittany spends the same amount in bus fares, occasional taxi rides.

      These car expenses for Jason and the taxis, buses etc. for Brittany even out. They both
spend the same amount each month. With one exception, Jason’s car payment.

      Brittany doesn’t have to make those payments, Jason does.

       Brittany decides to invest $229.00 monthly (the same amount Jason pays on his car loan)
out of her pay check. By investing she not only saves that money, she also earns interest on her
      Wait ‘til you see
what Jason really gives up
to own that car!!
                                                    Prison work gangs were
      Large companies
                                                    used in the old days to
love guys like Jason. How
else would they sell so                             force prisoners to work
much merchandise and                                hard for no pay as
make such huge profits?                             punishment for their crimes.
They win at their game.                              Jason’s credit work gang is
                                                    of his own doing.
           ‘Money Smart’
           people discover
           alternatives to
buying things. That way
they don’t have to work hard to pay for them.
      Some people work so hard that they have little time for friends and family. Some are so
rushed they seem to be tired and grouchy due to stress. If your folks are like this –don’t blame
them - no one probably ever taught them these secrets. So how could they know?
‘Money Smart’ people prefer to be in charge of their own time.

They aren’t manipulated by advertising or peer pressure.

They spend time playing and following their dreams as well as working.

       They live their dreams like skiing, painting a picture, writing a poem, playing a musical
instrument, playing sports, travelling the world, doing charity work and much more. Many of
these interests don’t have to cost a lot of money either. ‘Money Smart’ people compare and
shop for alternatives even when they are engaged in a hobby.
      Back to the car – see next page for the ‘real cost’ of buying on credit.

                                        Age 20

Jason buys a car                                     Brittany - no car
He pays $10,000 + sales tax.
Total $11,600 He pays $229
a month for 5 years.                           She invests $229 monthly for 5 years

Jason spends $300 a month on                   Brittany spends $300 a Mo.
Gas, Oil, Tires, Insurance etc.                on taxis, buses and car rentals.

                                        Age 25

Jason has a rusty car                          Brittany has $17,694

         Both Jason and Brittany stop the $229 a month payments at age 25 – Brittany’s
      investments grow as interest is added. Watch what happens next!

      NOTE: Brittany is not adding any more money to her investments it’s just return on
      her investment being added to her savings that makes it grow.

                                                     Age 30

Jason has a memory                                                   Brittany has $28,496
of a rusty old car

                                                     Age 35
Jason has a memory                                                   Brittany has $45,893
of a rusty old car

                                                     Age 40

Jason has a memory                                                   Brittany has $73,911
of a rusty old car

                                                    Age 45

Jason has a memory                                                   Brittany has $119,034
of a rusty old car

      Both Jason and Brittany have used their money in exactly the same way from age twenty
five on. Neither one has added to their savings. Both have used 100% of their income in this
example. Was it worth $119,034.00 for Jason to buy that $10,000.00 car?
        Note The $119,034 is calculated at 10% a realistic rate (or even a low rate) of return for many businesses.
A more realistic rate for individuals over the long term would be 7%. Using 7% to calculate the growth form age
25 to age 45 would leave Brittany with $96,033

      If Jason wants to catch up to Brittany in savings how many years will Jason have to work
to save an extra $119,000?
      Remember in order to do this Jason must save that money in addition to paying for his
everyday living expenses. Can Jason ever catch up?

      To even try to catch up to Brittany he’ll probably have to work two jobs.

      Assume that Brittany doesn’t touch her invested money for 20 more years. This allows
the money to grow and we really notice the magic of the compounding of interest.

                     Compound interest is when your savings earns
                     interest for one year. Then you leave both the
                     savings plus the interest invested to earn more
                     Now your interest is earning more interest, that’s
                     called compounding.

                           Let it grow long enough and your interest
                     earned can become larger than the original
                     savings you started with!

      That magic of compound interest gets bigger the longer you leave it there!

                                                Age 50

Jason has a faded memory                                       Brittany has $191,705

of a rusty old car

                                                      Age 55

Jason has a faded memory                                              Brittany has $308,743

of a rusty old car

                                                      Age 60

Jason has a faded memory                                              Brittany has $497,234

of a rusty old car

                                                      Age 65
Jason has completely                                        Brittany has $800,800
forgotten his rusty old car

       Amazing how much that $10,000 used car will cost Jason in the future!

         Note: The $880,800 is calculated at 10% a realistic rate (or even a low rate) of return for many businesses.
A more realistic rate for individuals over the long term would be 7%. Using 7% to calculate the growth form age
25 to age 65 would mean Brittany would have $264,958. That is still a nice sum of money. Added to other benefits
it can translate into a lot of security, peace of mind, and freedom of choice, for her.

  Financial Freedom begins with Lifestyle choices – so does bankruptcy

                                         Chapter Three

                           More Secrets of a Happy Life

      Jason had no idea what he would have to give up in life because he bought that car. If
he’d only known the real cost in time and effort! Keeping this a secret helps these companies
and salespeople win at this game.

      If you want to win at this sport you need to become aware of the real cost of every
purchase in life.

      The greatest secret of becoming wealthy is to uncover the real cost by looking ahead. Put
each buying decision to the test. Here are a few questions to help:

      1) Am I buying this just to impress others with a certain item or brand name?
      2) Do I really need it and will it really serve me well?
      3) Am I buying this because I want to feel better by buying something? If the answer to
         this is ‘yes’, then tell a guidance counsellor or other adult how you feel. There are better ways to
         deal with feelings than spending money. Empower yourself from within.

                              Speaking of feelings – they are of great importance.

                            It’s normal to feel sad or inferior at times. What isn’t healthy is to
                            hold those feelings inside. Some people don’t discuss their feelings
                            because they’re embarrassed. Don’t let what others might think stop
                    you. Free yourself now by speaking to someone who can help.

       No matter what the reason is for feeling inferior you’re not alone. I felt inferior because I
wasn’t very good at most sports. Everyone feels that way in some area of their life. Your
feelings are normal. Growing up is in part learning how to deal with feelings.

      Maybe there’s a good reason to feel your family isn’t up to par. Some top professionals
say we all come from dysfunctional families. None of our families are perfect or ideal.

      Share your feelings with a counsellor or a trusted adult. Maybe you shouldn’t share it
with everyone, but find at least one person you trust and tell them how you feel. Most cities
have anonymous help lines you can call. The power to change is within you.

      You can feel good without buying status items. In fact you may feel better knowing you
have grown beyond needing ‘things’ to feel good.

      If you or your family have a small income and struggle to get by, remember this truth:
‘The richest person in a room isn’t the one with the most money. The richest person is the one
with the least wants. Think about it. The one with the most wants is never happy or satisfied.
They always want something they don’t have.

       That’s not just talk. As a financial planner I meet people who have small incomes and are
very happy and content. They feel secure. They enjoy their family, their modest home and their
health. They love one another and feel part of their community.

       I’ve also met people with large incomes who worry so much about material things like
furniture and cars, appearances, business deals, investments etc. that they miss out on life. They
seem to be always in a rush. They are wealthy with money but not rich in happiness.

       Some people miss the quiet security that comes from not ‘needing things’ to make them
feel good. Lack of money doesn’t mean serenity every time. There are people who have little
money that do worry a lot, and are not very content.

      There are also wealthy people who are secure and content.

      The point is that happiness is not tied to money or the lack of it. Happiness comes from
dealing with our own thoughts and feelings. No amount of money can buy happiness.

       It’s not having money that creates a problem in life. It’s the love of money that’s the
root of all evil. One can be very poor financially and still love money. Poor folk who envy
those that have money are generally unhappy too. Accepting who you are and being grateful for
what you have is great place to start in achieving happiness.

     Back to the purchase: Once you’ve decided there is good reason to buy something, do
one more thing. Ask: Is this the right time to buy it?
       You may want to buy it if you have enough money and still have some left over. If you
plan to ‘buy-now-and-pay-later’ then re-read about Jason’s car purchase. What will it really cost
me? Is it really worth it?

     Can I get the same benefit in a less expensive way? Can I rent it? Can I share with
someone else? Think the benefits through.

     You might give a copy of this booklet to friends who might benefit. Giving to others helps
you feel good about yourself. When we care enough about others to give them something they
need or can use we feel like a true friend.

       When giving is done from a sincere heart and not just to impress someone then our gifts
are usually appreciated and our friendships grow. Giving away things just to feel good, to
impress people usually backfires. Try to give for the right reason, which is to help someone or
to share in a celebration or tragedy in their lives.

      Helping others is a way to stop wanting everything our own way. People who care only
about themselves and what they can get are almost never happy for very long. Look around, you
can see that in some other people.

        The richest person in the room is the one with the least wants. Not the one with the
        most money or things.

       Babies want everything to be supplied for them. That’s the way it should be, since they
aren’t capable of fending for themselves. We all start life that way and that’s good.

      What isn’t good is when we still want too much and we aren’t babies anymore. The
childhood habit of ‘wanting’ brings with it big costs when we get older, as we saw with Jason’s

      The costs are not just financial. The emotional pressure of paying for unnecessary
material things can destroy marriages, and lives. It can drive people out of their minds. Most
people prefer peace of mind – not worry, so look ahead.

        Some people use up their energy worrying and aren’t capable of continuing to work any
more. I was there myself for a short time. I am very thankful that I was able to recover my
sanity. Not everyone can. If you can use some ‘Money Smarts’ now, you may avoid the money
hassles that I’ve experienced. Stress and worry are not fun.

     Jason wanted the ‘good feeling’ that he got from cruising the streets in his shiny new car.
He wanted to come and go when he pleased.

        What he didn’t know was that he would have to give up so much freedom for the rest of
his life for a bit of fun now. If he’d only known he might have made a wiser financial decision,
like Brittany did.

       Here’s another secret “Feeling good doesn’t take money”.

      “Some people are prepared to do without what others have now so they can have what
others cannot have later.” One of my teachers, Mel, used this quote often. I don’t recall who he
was quoting but it’s true.

       When we think owning a new bike, car, dress, shoes, i pod, or cell phone will make us
feel better about ourselves we need to think twice.

       Buy things that will have a genuine use in your life, not just because someone else has

      Becoming an adult is rewarding and exciting. When we understand how today’s
decisions do affect our future it's even more abundant. Knowing you are making the best
choices possible gives you a sense of pride and security. It’s a similar feeling of pride Jason felt
when he bought his car except your feeling of pride comes from within and doesn’t cost you
years of regret.
      Jason made his decision based on the knowledge he had at the time and he felt good
about it, but that feeling was short-lived and he paid for it the rest of his life.

       You need to become an individual, not just part of a crowd. An individual doesn’t need
shiny things, brand name clothes or big toys to feel good. Individuals learn to feel good about
themselves, because they are aware that their ‘self worth’ doesn’t depend upon their ‘net worth’
or a display of ‘things’ they own.

                  Another secret: “Self worth” doesn’t depend on “net worth”.

                                           Good ‘self worth’ is the true
                             feeling that I’m as good as anyone else. I don’t
                             need to show off to get attention, and I don’t
                             feel insecure or inferior about myself. I don’t
                             need to prove anything to my peers for their

                    ‘Net worth’ is what is left after you
                    sell everything you own and pay off
                    all your bills. It’s just material stuff.

                                    Jason’s storey continues

                       There is still more payback for Jason’s decision!

Jason decides at age 45 he wants to save money to retire at age 55.

      Q. How much must he save to catch up to Brittany?
      A. He must accumulate $308,743 by age 55 to catch up to Brittany.

      Q. So how much extra must he save every month to accumulate $308,743 in ten years?
      A. Jason must save over $2,400.00 every month from age 45 to age 55 to catch up! That’s
nearly $30,000 a year for 10 years!

      In addition Jason must live. He must pay all living expenses to run his home and feed his
family. Plus he must also save as much as Brittany is saving during that ten-year period to keep
from losing ground.

      Do you think he will be able to do all that on the exact same income as Brittany? Of
course not!

      He’ll have to work two jobs – more debtor’s prison pay back.

                              Is it mission impossible for Jason?

     Do you think Jason had any clue what he was sacrificing just to drive that car every day
when he was a young man?

      Q. Did anyone ever explain the future costs to Jason?
      A. No! That’s the merchant’s secret. (That’s how they make fortunes at the expense of
unsuspecting buyers. They often win at their game.)

       Q. If Jason had understood the true costs in addition to the mere payments would he have
bought that car?
       A. Probably not. But if someone had given him this information, at least he would’ve
known ahead of time. He couldn’t blame anyone else for his tired tedious lifestyle later in life.
       Jason still can’t blame anyone else, since the people in his life probably weren’t given
this information either. This has been a very well kept secret for generations by the
establishment. "By the 'Establishment', I mean the whole of our society.

       If it was profitable for business to know about this side of the money game it would be
front and center in the classrooms and in communitiues and homes..

       Businesses profit at the expense of the Jasons of this world. The car dealer won by
making money off the car he sold. The bank won because it made money from the interest he
paid on the loan he used to buy the car. The people he works for now win because they have a
trained employee who can’t choose to retire. They don’t have to spend money training someone
to do his job.

      Buying a car is tempting. Knowing the secret costs tarnishes the lustre of that choice.

             Proper purchasing might take more ‘Money Smarts’ and constraint than some
             teenagers can muster. But when you’re armed with the knowledge that Jason was
             missing you’ll choose for yourself.

      I have every faith that teenagers are just as smart and just as wise as anyone at any
age. What they are missing is the knowledge that experience teaches. We gain experience by
making mistakes as well as by doing well in life.

      “Smart people learn from their own mistakes, wise people learn from the mistakes of
others” – I’m not sure who the author was of that quote.

        Q. Why would some young adults still be tempted to buy a car even after reading this
     A. They might want to feel important because they have a shiny car. It boosts their status
among their peers. This is tempting.

      'Old fools' (people in their 40’s and 50’s) still buy shiny toys (cars, boats etc.) and build
oversized homes just to show off their status. So we would expect young people to follow their
example of materialism, unless they know better. I hope that this booklet helps change your life.

       Whether you are age 16 or 61 makes little difference. If you haven’t learned something
on your own and no one ever taught it to you then you don’t know it. Many old people still
aren't aware of how they were manipulated by advertising, peer pressure and selfish pride to
buy things unwisely.

      Try to find wisdom now, so you’ll be able to enjoy things in life that others cannot. On a
coffee shop newsletter I saw the following “Wisdom comes with age, but sometimes age comes
alone” If you learn all you can about life experiences you can be wise at any age.

      Feeling good about yourself regardless of the ‘things’ you own or don’t own separates
the men from the boys and the women from the girls.

             Financial Freedom begins with Lifestyle choices – so does bankruptcy

                                     Chapter Four

                                 Colleen’s Dilemma

       Colleen had the weekend off and was home alone. She looked forward to this time to
herself. Her kids went with their grandparents for the weekend. Greg, her husband, had gone
fishing with two of his pals. This was a treat to be home alone with nothing to do and she
planned to enjoy it.

      On their back deck Coleen decided to soak up the sun and read a book. She lit up a
cigarette and helped herself to a cold glass of pop and checked her emails before starting to

       Soon after she stretched out on her hammock she realized the glare of the sun reflecting
off her magazines took the joy out of reading so she tossed them aside, lit another cigarette and
sipped on the still cool pop.

       She began thinking about their struggle to meet expenses and provide for the children.
She took one last drag of her cigarette and tried to relax.
       She was almost asleep when her package of cigarettes dropped to the deck and caught her
attention. She wondered how much smoking had cost her so far. She got up and took a pen and
a pad of paper and began to calculate.

       Colleen thought                           she was grown up enough to smoke when she
was 12 years old. She started taking an occasional cigarette to fit in and be cool. How childish
that seemed to her today at age thirty. Did she really think that smoking a cigarette made her
look cool? Why did she think that a cigarette was stylish? Was it because of TV ads?

       She started smoking in the days before health warnings were printed on the packages.
Those days there were ads showing glamourous women holding cigarettes as well as girls with
athletic youthful appearance in cigarette ads. Big business had really lured her in with those
ads. “I wish I’d known then what I know now” Colleen thought with regret.

       Let’s see I started smoking when I was 12, but I only bought about a pack a month that
year. The next year I got that part-time job and started buying about two packs a week for about
two years. Then it increased to almost a pack a day.

      When Coleen started smoking, cigarettes cost about $3.75 a pack, now they are nearly
$10.00. It’s easy to see why most people don’t smoke any more.

     $3.75 X 12 packs = $45.00 that first year
     $4.00 X 2 packs a week X 52 weeks = $416.00 the second year
     $4.50 X 2 packs a week X 52 weeks = $468.00 the third year.
     $5.00 X 7 packs a week X 52 = $1,820 the fourth year ……Colleen was age 15 then. She
remembered how hard it was to keep her supply of cigarettes that winter. It was OK while she
was working extra hours in the summer, but during the school year it was really hard.

      Colleen is now age thirty. Fifteen years ago cigarettes cost $5.00 a pack and are now
$10.00 in most places, so she took an average of $7.50.

      $7.50 X 365 days = $2,737.50 a year
      Multiply that by 15 years = $ 41,062.50 --- she was stunned! That’s about what I spent on
cigarettes the past 15 years.

       “Wow! That’s a lot of money! That’s more than the price of a new car! We could’ve
bought two cars like the one we own now. Boy-oh-boy was I fooled by those ads! Now it’s so
hard to quit!” Colleen thought.
       “What a fool I was. Thank God I never got the notion that drinking and doing drugs was
cool. People who got lured into the drug habit must have wasted a fortune! No wonder they call
it being ‘wasted’. They become so dependent on drugs they can’t even live without their dope.
What a terrible life that must be – being a slave to a drug!”

      “Those pill pushers and drug dealers make a huge fortune off suckers like that” - she
thought as she reached for her pack of cigarettes. That’s when it struck her! She was just as
hooked on smokes as Charlie was on booze, or Todd and Grace were hooked on Cocaine!”

     “I, Colleen, am as hooked on tobacco as they are on their drugs and alcohol, otherwise I
would just quit!”

      “Yes my habit only costs $10.00 a day, and their’s is probably $100.00 a day or more for
Todd and Grace. God help them.”

      Colleen put down the pack of cigarettes and picked up the pad and pen again. “If
cigarettes cost $10.00 now and never went up in price again I’ll spend $3.650.00 a year, and if
cigarettes don’t kill me and I live to age 65 that will cost us $3,650 X 35 years = $127,750.00.”

      The price has more than doubled in the past fifteen years. “I was going to just enjoy the
weekend, now I start thinking about this. I’d better try to quit. There is no better time than
today.” She threw her pack of cigarettes away.

      Still amazed by the expense, Colleen reflected at how easily she and other young people
got drawn in by big business. Advertising never told her about the real cost of smoking. She
wondered if the younger generation are any smarter than we were. She certainly hopes they are.

      She has a program in the computer that could add up the real cost of her habit and help
inform her children to help them avoid stupid mistakes.

       She entered $3.650.00 deposit into an investment for the first year. That was what it cost
her every year to smoke now. She set the annual increase at only 5% to allow for increase in the
price of cigarettes going up like they always have.

      Next she thought if a person at age twenty smoked a pack a day what would they spend to
age 65. Many smokers die before age 65 as a result of their smoking, but some would make it
beyond that.

       She also figured that if they invested that money with 8% on average for that forty-five
years, so she keyed in an interest rate of 8%

      So here goes – she hit the calculate button.
      “Holy smoke!” $3,013,717.00

      “What would a person do with three million dollars?”

       Not much wonder those large companies try to tempt young people. Look at the profits
they’ll make from their victims!

      Colleen thought I’ll go one farther and run it at only 6% return on investments.
$1,849,228, wow! That is still nearly two million dollars on cigarettes.

      How many teens have been informed about this? Has anyone told them that by not
following the crowd they could become wealthy?

      “Boy, I wish I was age 20 and know what I know now!” She laments again.

       As the author of this book, I believe that if teachers and parents put the whole truth in
front of them, most teens have the wisdom to make great decisions. It’s just that corporate greed
has done such a great job of manipulating the thinking of everyone, not just our youth.

       I started smoking when cigarettes sold for twenty-six cents for a pack of twenty. I finally
quit about thirty years later. I had smoked about two and a half packs a day for twenty five
        years by then. The price of a pack of cigarettes had risen to $3.50. I quit, and have never
regretted quitting smoking.

       Would I have avoided smoking as a teenager if I had known the actual cost in dollars and
the health hazards? I’m not sure. But if I had the information at least I could only blame myself
for starting.

      Take time to ponder the real results and weigh out the costs against the perceived

      I say perceived benefits since most of the things we get entrapped into are really due to
our low self image. I can’t think of a single real benefit to smoking today, but I can list dozens
of advantages of not smoking. I speak from personal experience.

       Whether it’s addictions or just buying the latest clothes fad or gadget on the market that
gets us in trouble, it won’t fix our image of ourselves in any lasting way.

      None of these things fix our self image. We know deep down inside we’re just followers
and afraid to be individuals. We’re being lead around by advertisements and we allow the big
companies to control our thinking.
      Following the crowd often leads to much personal inner conflict and that takes away from
being happy, joyous and free. That is unless you follow the right crowd to follow. Choose your
friends wisely.

          “Financial Freedom begins with Lifestyle choices – so does bankruptcy”

                                            Chapter Five

                                    Where do we go from here?

      Now that you have an understanding of some of the dangers of unwise spending, what
should you do?
                 Growing up means becoming your own person.

     As a teen I didn’t want to do everything the way my parents wanted. But I knew they
wanted the very best for me.

       Occasionally some of my friends pressured me if I didn’t do what they wanted me to do.
Sometimes they’d or call me a mommy’s boy or some other name to try to make me feel bad.
Those ‘friends’ I didn’t hang with very much. Choosing friends carefully was kind of easy. I
just avoided the ones who weren’t nice to me.

      Sometimes I gave in to their plans even though I knew it wasn’t best for me. I could’ve
done better. I was taking the easy way out, but I didn’t always take the easy route.

       Donnie, who was thirteen, and I was ten when he began bullying me. He threatened me
not to tell the teacher or else. I told the teacher. He did it again and threatened me again, calling
me a tattler. I told the teacher. He did it again. For the third time in one day I ignored his threats
and I told the teacher again. That was the last time he bullied me. I don’t remember being
bullied by anyone else in school.

       The problem with taking the easy road is I give up part of myself. When I gave in it was
like being a little kid. I was just doing things so they wouldn’t exclude me from their group. I
didn’t feel strong. When I followed the gang just because they said I should, I gave up a piece
of my own independence.

      How do you become independent? There’s no easy answer, but here a few tips.

      Ideally your parents should guide you to do the right thing. Parents sometimes find it
scary to raise a family. Perhaps their parents were too busy working, or too stressed by health
problems, money problems or addiction problems to teach them properly how to grow up. If
you’re not sure whether their advice is good, assume it is sound until you learn differently.

      Your buddies may be good people but, like all humans they aren’t always right. So where
do you go?
       It isn’t smart to do something just because someone tells you or you read it a book, even
this book. You may have to ask others to check things out to see if they are wise.

      Do what you know or feel is right – it pays off. A conscience free of guilt helps you
develop a sense of real confidence. You don’t have to prove anything to peers when you feel
comfortable with yourself. Your self worth shouldn’t depend on certain style or brand name of
clothes. Your self confidence should come from within you.

      Your school’s guidance counsellor should have sound advice. She/he has been selected
by the school board because of their education and background to help people your age. The
youth leader at your church could also be a big help for you. Sports teams, school bands, or
some other group that you share a common interest in are all ways to develop skills that help
you become your own person.

                                  Money Smart Tips for You.

            A book that I read many years ago is really helpful. It’s called “The richest Man in
           Babylon” by George S Clason. This book was written many years ago and is not
           about a fad or scheme to get rich quick. It lays down principles that still work if you
           want to become wealthy. It takes 4 hour and 51 minutes to listen to it free on line at

         Here are two of the rules a person can use to become wealthy.
         1) Ten cents out of every dollar you earn is yours to keep.
         2) That is yours to keep – not to spend later
            There are more rules in Clason's book.

                   Ten cents out of every dollar you earn is yours to keep.

      Most people give all their money away. They give it to the grocer, the clothing store, the
telephone company, and some to… (well you get the picture). They don’t even keep any for
themselves. If they do save any it’s just the leftovers from everyone else.

           From every dollar you receive pay yourself first. Make the others wait their turn.
           Don’t spend your part of your income on their products. Keep that 10% for you.
           You’re important enough for that.

      You can live as well on $9.00 as you can on $10.00. All you have to do is search for
things that are a better buy than you normally would have bought.

      The same is true of $90.00 as opposed to $100.00, just find better buys and save the 10%
      for yourself.
                Make a sport out of hunting for bargains. 
       Checking different stores for better buys and uncovering less costly alternatives can be
fun. It’s like hunting, or playing hide and seek. You don’t know where the best buy is until you
find it. When you do locate a better deal than you planned it’s a great feeling. It’s like
uncovering a prize in a treasure hunt.
                     That ten percent is yours to keep – not to spend later
      You’ll never run out of money this way.
      Saving 10% at first may not seem like much, but keep putting that 10% in a safe place.
(You may need help to open a bank account but most banks or credit unions are very helpful.)
Watch that there are no service charges. If you can’t locate one with no service charges
email me at ghughes@nb.aibn.com I’ll give you the name of several banks that don’t charge

       Look for the best deal. Don’t pay any bank to hold your money. They should pay you
interest. Banks use your money to invest while they have it. That should be enough profit for
them. In only two or three years you’ll be amazed at how much you have saved.

        This is where we separate the adolescents and adults form the kids.

      Sometimes you may be tempted to take money from your savings for that special
purchase. Don’t do it.

        You should have another account or safe place where you put another 10% of your
money for unplanned emergencies and opportunities. You’ll need a third place to save money
for things you plan to buy in the next few months. This could be a safe place at home as long as
it isn’t too large an amount. Cash won’t burn in a bank account – it could if your house burned

      You ask: What good is money if I can’t spend it? 
      1) When you can show a lender that you have saved money consistently it’s much easier
         to get a loan.
      2) When you need/want money and you know you could withdraw it from your life long
         savings – don’t withdraw it. Borrow it if you really must have it.

      NOTE: People will tell you it’s cheaper than paying a higher interest on a loan. Real life isn’t just
      about math. In real life most people never replace all the money they withdraw. Just pay off the loan and
      keep on adding 10% to your own money. One day you’ll have enough to be able to buy large apartment
      building or businesses if you choose. They’ll lend you enough without taking any money out of your
      own account.

      3) Having money gives you access to even more money. Life is much easier financially.
         People with no savings usually have to pay a higher rate of interest on their loans IF
         they can even get a loan.

     Watch for my booklet “Money Smarts for Young Adults” coming soon. You’ll be able to
down load it free at www.SmartChoiceLife.com I will share some pointers about borrowing

                            “Don’t do what I did. …Do as I say”

      Some people warned me not to write the above statement in here. But I need to be honest
with you. The following are some of my mistakes and a few comments. You should begin with
finding ways to really enjoy life without foolish spending. Saving money just because you
should is sometimes harder to accomplish than when you enjoy doing it. Put the fun into
seeking out the best deals and save your own 10% just for you.

       I started smoking to be a big shot. Truth was I wasn’t grown up enough to understand that
the only ones who thought it was cool weren’t so smart either. If only I had enough brains to
figure out that choking on smoke and coughing were not fun.

       You really don’t have to be too smart to catch on that this ain’t smart. Smoking almost
killed me. It cost me a fortune. Life would have been so much more fun if only I had the
money I wasted back then.

       Yes. I believe I could’ve done different with the example of some friends. Find friends
who don’t need cigarettes, drugs, or alcohol to feel good about themselves. That is a good place
to start. The friends I had all smoked, they thought it was smart! Go figure that! Choose your
friends wisely.

      Q. How do you make new friends?
      A. Just be yourself. Don’t try to make people like you – most people prefer a friend who
         is genuine rather than a phony. Find friends that act like you would want to act and
         you have something good in common with such as sports, joint homework projects, or
         other topics that are of interest to both of you or would benefit both of you.

       Q. Won’t my friends be jealous if I start being friends with others?
       A. Sometimes they will, especially if you are spending less time with them. If someone
is a true friend they’ll remain your friend. Explain that you choose to spend time with others
because you don’t want to do certain things they take part in. They might respect you for that.
They could also become jealous and reject you. When you know you are right, stick to your
path. Anyone worth having as a close friend will respect your decisions even when they are not
the same as theirs.
      Even when people are no longer close friends they shouldn’t become enemies. It’s best to
remain friendly even when you spend less time with them.

       You’ll become your own person when you allow people to become your friends instead of
trying to please others by doing what they tell you to do.

     Remember use the 10% rule sensibly but don’t become too attached to money – it isn’t
money that’s the root of all evil – it’s the love of money that causes problems.

Books to look forward to downloading free from the website www.SmartChoiceLife.com in the
future are:

      “Money Smarts” for Young Adults
      “Money Smarts” for Borrowers
      “Money Smarts” – the Retirement Myth
      “Money Smarts” for Seniors
      “Money Smarts” – The ‘feel good’ purchase

      Your comments would be appreciated email me at ghughes@nb.aibn.com

      Author is Gordon Hughes CFP call 1-800-471-0411 or call (506) 472-7308

       This book is free as a download from www.SmartChoiceLife.com tell your friends about
this bargain we appreciate it and we hope they will also.


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