Life Lesson: Prioritize and Execute

After a tough day of school and Tennis, I always enjoy having a break at dinner. I usually take 45 minutes to sit down, eat, and enjoy a book. Recently, I have had the pleasure of reading “Extreme Ownership: How U.S. Navy SEALs Lead and Win” by Jocko Willink and Leif Babin. I highly recommend the book to anyone looking to improve their lives. But last night a particular passage stood out from the rest: Prioritize and Execute.

This particular lesson applied to my homework situation last night. I had two tests, a quiz, a project, and 100 pages of reading all due the next day for school. I was tired after conducting interviews for the school newspaper and giving a half hour speech in Chinese, and I had no idea how I could get all the work done and be well rested for my tests.

While I won’t spoil the book for you, Jocko Willink was in a much tougher situation when he learned this lesson. But instead of panicking, he kept a calm head, gave orders to his soldiers to solve each problem, one at a time, and escaped enemy territory with no casualties. If you can learn to prioritize your tasks, then you can get through the day without suffering any financial casualties, or in my case, GPA casualties.

First, I figured out which assignments would be most important. The two tests made up the highest percentage of my grade, so I spent my first 90 minutes of studying preparing for each test. After completing the highest priority task, I looked at what I had left: The project, the quiz, and the reading. The quiz was to be administered last period, so I decided to skip the review and plan to do it during study hall the next day. Finally, I spent another 60 minutes completing the project and doing 40 pages of the reading, since there would not be a quiz on the full 100-page reading the next day.

Through prioritizing and executing, I took what seemed like an insurmountable amount of work, and completed it in two and a half hours. That’s a pretty good deal at my school, where many students are lucky to get 6 hours of sleep.

Let’s see how much time I saved compared to someone who didn’t prioritize and execute:

Physics Test Review: 45 mins

History Test Review: 45 mins

Chinese Project: 30 mins

~40 Pages English Reading: 30 mins

~60 Pages English Reading: 60 mins

Chinese Quiz Review: 30 mins

Total Time: 4 hours

Compared to the average student, I saved a whole hour and a half on my homework through prioritizing my tasks! And I was able to use that extra time to get a good night’s rest, and stay focused during the tests and the quiz I took today. And now that the weekend is here, I’ll have plenty of time to complete the work I didn’t get to during the week.

When faced with e-mails, meetings, and all the other jazz that goes along with a busy career, things can seem overwhelming, and impossible to get done. But by keeping a level head, you can pick out your highest priorities, accomplish them, and then continue down the list until you complete everything that needs to get done that day. And before you know it, you will have a less packed, more focused schedule, and get more done than you could ever imagine!

-Andrew

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Life Lesson: Know Your Audience

Last night, I spent a few hours hanging out in the game room of a resort I am staying at. After acquainting myself with half a dozen other teens through some heated ping pong battles, I pitched 17 to Financially Free to them, hoping to gain some more viewers. Unfortunately, I don’t think any of them are gonna check it out anytime soon.

I told everyone about how important it is to be financially secure, and that consumer debt is severely restraining the middle class in America. I had the pleasure of watching their eyes glaze over, and eventually look back down to Snapchat stories and Instagram feeds. Even after mentioning that they can look up the mobile version of the site on their smartphones, none of them bothered to do so.

After walking back to my room, feeling defeated, I had an epiphany: Why the hell am I trying to get teenagers excited about eliminating credit card debt and living frugally? 99% of kids my age don’t care at all about financial stability; they care about spending cash and having fun! The title of the first personal finance book I ever read was “How to Be Richer, Smarter, and Better-Looking Than Your Parents”, not “The Dangers of Consumer Debt in America’s Middle Class”!

From now on, I’ll include some more exciting aspects of personal finance in my pitches: Being able to afford sweet rides, big mansions, and exotic vacations. While most members of the personal finance world don’t have these goals, it will definitely get young people excited about saving money.

The main thing I learned from this experience is to know your audience. Steve Jobs turned Apple into a technology empire by making his products appealing to millions of American consumers. The perception people have of your product or service is just as important, if not more important, than the quality of that product or service. So no matter what you are pitching, focus not only on the idea, but also on how you convey that idea.

-Andrew

The Snowball Effect, Saving $3,000 by Senior Year, and Setting Long Term Goals

Now that I have finally received my check for my last shift at work, my savings account balance sits at approximately $1,005. Success! But where do I go from here? My next goal, which I set in place at the beginning of my journey along with the $1,000 goal, is to save $3,000 by the end of Senior year. And even if you have not reached the $1,000 mark yourself, you should still plan ahead and set your own $3,000 goal.

Long term goals are just as important, if not more important, than goals you can reach in the near future. Your short term goals (Anything that takes one month to a year) should build a foundation for your long term goals (one year to five years) which should build a foundation for your major life goals (i.e. Buying a home, paying for your kid’s college, or buying a Lamborghini if you’re like me). There is no point to achieving a minor goal unless it eventually leads to greater things.

While this mindset can be applied to many challenges in life, it is especially important when trying to be financially successful. All fortunes are made $1 at a time. But eventually those dollars add up! Once you begin your journey to financial success, you must have an end goal in mind, even if that goal changes overtime. You need to have consistent goals so that each time you reach a milestone, you feel a sense of accomplishment. Otherwise, you will be embarking on a journey without a destination.

Here’s a rough list of my financial goals:

  1. Save $1,000 by the end of Junior year (Done, ahead of schedule!)
  2. Save $3,000 by the end of Senior year
  3. Save $100,000 by age 25
  4. Save $250,000 AND put a down payment on a home by age 30
  5. Save $1,000,000 by age 40
  6. Save $5,000,000 by age 65*

*(Not adjusted for inflation, so that goal will probably end up being closer to 10 mil!)

“But Andrew, $100,000 is SO MUCH MONEY! $1,000 was reasonable, but I can’t do that another 99 times!”

Well, if you follow the 4% Rule for retirement (which won’t work for most people, anyways), you will have a grand total of $40 per year to live off of for the last 30 years of your life, if you decide to not save anymore money. And in America, no matter how frugal you are, it’s impossible to survive on 11 cents a day!

One of the great things about saving money is that it will grow exponentially over time if you play your cards right. By continuing to lower your expenses, and progress in your career, the flow of money into your savings account will increase dramatically. Let’s say Bob made $3,000 a month Post-Tax last year, and saved $100 a month to achieve his goal of $1,000 in savings. This year, Bob continues to cut back, and lowers his expenses to $2,500 a month. He also gets a raise at work, adding $400 a month to his Post-Tax Income. By the end of this year, Bob will add another $10,800 to his savings, or over 10x what he saved last year. By cutting costs and expanding cash flow, you can increase the amount of money you put into your savings every year.

Once you have enough saved, you can begin investing and experience the “Snowball Effect” of growing money. Through investing, you can make money, and have that money make money, with almost no work! Let’s say Bob wanted to invest in the stock market and put his entire $1,000 in savings into Walmart Stocks (not recommended!). Let’s say the stock produces a 5% return every year. At the end of his first year of investing, Bob will have $1,050 in Walmart Stocks. Now, Bob decides to buy another $10,800 worth of Walmart Stocks (Again, not recommended!!!). By the end of his second year of investing, Bob will have $12,442 dollars in savings , and a profit of $592 for the year! So, if you save more money, and invest more money, you will eventually be raking in massive amounts of cash by letting your money work for you!

I know that was a lot to digest, and a lot of what I discussed here cannot be fully understood from just a blog post. But by committing to learn about investing and saving your money wisely, you can set seemingly impossible goals, and reach them through hard work and perseverance.

-Andrew

The $1,000 Plan: A Post for Anyone Ages 8-80

Do you think that Warren Buffett made 66.7 billion dollars overnight? Or Bill Gates just checked his bank account one day and it contained 79.2 billion dollars? Or that Mark Zuckerberg built a website in college and made 35.7 billion dollars? (OK, maybe he did, but your name isn’t Mark Zuckerberg, is it?)

Anyone who is rich of their own accord, whether they are a small business owner or a titan of industry, built their wealth over a period of years, or even decades. You don’t go from $0 in your bank account to $1,000,000 in one fell swoop, it happens in increments. And if you want to jump around naked, celebrating your newfound wealth like Mark Cuban did, you have to take that first step towards greatness.

I once read somewhere that if you have $10 in your pocket and no debt, you have a higher net worth than 25% of Americans. While jumping from last place to average among those below average may seem like an accomplishment, a homeless man can achieve the same by picking up a few stray greenbacks off the street. Plus, you’re ambitious enough that you want to get as close to average as you can, right? Right?

Whether you are a starry-eyed teen with dreams of one day owning a Lamborghini and a mansion, or an adult trying to solve the complex puzzle of the modern financial system, I think that $1,000 is a reasonable savings goal. My own goal is to save $1,000 by May,and I’m already 98% of the way there, with another paycheck on it’s way to cover that last 2% with change. And if a kid who will drink Starbucks frappuccinos as long as the grass is green and the sky is blue can do it, you can, too!

Unfortunately, a lot of you may have no money in your paycheck at the end of the month, or you have a large amount of debt, whether it be student, credit, or a large mortgage. But if you focus hard enough, you can slowly but surely make your way towards that first goal. Instead of going out to the club with your friends, watch a movie at home and put the $50 difference into your savings. Set a budget for eating out, and if you blow it in the first 2 weeks of the month, have fun eating ramen noodles for dinner every night!

One of the hard facts of life is that there is no reward without sacrifice. Even if you can only manage to put away $3 a day, you will have $1,095 in your bank account after 365 days; you’ll reach your goal and have enough left for a night out on the town!

I don’t promise to make you rich overnight, in a year, or even 10 years, depending on where you are starting from. But I do promise that if you commit to taking that first $1,000 step, and slowly but surely add to that initial stash of cash, you will wake up one day and realize that you have created a financially secure future for yourself and your family.

-Andrew

Setting Financial Goals as a Teenager

One of the most difficult things to tell a teenager is to save their money. One of the most difficult things to tell myself is to save my money! Why put my checks in the bank when Starbucks and Chick-Fil-A are only 5 minutes from my house? However, as painful as it may seem, one of the best times to save during your life is when you are a teenager.

Reasons why you need to save your money NOW!!!

  1. You have parents or a parent that will feed, clothe, and shelter you until you are 18, and even afterwards if you’re lucky or just too lazy to leave the house. All of your money can go towards savings if you so desire
  2. There is no downside to any experiments in investing. You can buy stocks and learn what works and what doesn’t work without dealing with the consequence of not having enough money to cover bills/rent
  3. If you want to be a little more conservative, you can invest in Bonds and CDs and get an extra cash infusion a few years down the road
  4. You can minimize your college debt, or have a little extra spending money if you get a scholarship or have generous parents
  5. You start learning good money habits that can only be helpful down the road

As you can see, there are many good reasons to start saving money from a young age. In my opinion, #5 is the most important reason. If you start with $1,000 in savings, that can grow to $10,000 in your first few years out of college, $100,000 within the decade, and even $1,000,000 by your 40s… I don’t know about you, but I sure wouldn’t mind being a millionaire!

For many teenagers, getting a first job is a rite of passage, and holding that first paycheck in your hands can be exciting and even overwhelming. But saving even a small portion of that check can prepare you for the future and help you save for all big-ticket items your teen heart desires, such as this $379.95 pair of Beats Studio Headphones. So start saving now, and enjoy the benefits in both the near future and the far future!

-Andrew