From Scarcity to Prosperity: Raising Financially Confident Families – Episode 670

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[00:01] Welcome to the Prosperity Podcast. Hi everybody. I have the pleasure to have Kim Butler on my podcast. Welcome back, Kim, to the podcast. Always a joy, Richard. Glad we’re getting to have round two. Yeah, I think it’s round three, I think. It might be, you’re right. Yeah, we’ve done some other stuff like the woman empowerment and all that. So Kim is doing some great things in the financial space and the financial industry space. So we’ll be talking about a few things that will help people in their lifetime. So talk to us. So what do you have on your plate? Because before I pressed the record button, so I just wanted to know what you got to tackle. So talk to us about the stuff that you want to talk about.

[00:45] It’s such a great word. That’s what we need to do sometimes is tackle things, right? Somebody said to me the other day, oh, are you handling it? And I thought handling it kind of means like you’re just touching it and not moving it forward. Tackling it means you’re going to get some results. I like that way better. So it’s so interesting to me. I’m working on my 12th book. It’s called Prosperity Parents. And it is a culmination of really, I’m almost 60, 60 years of education around the personal financial realm. Because I started learning about personal finances in my early years because of the way that my parents who were teachers chose to handle our family’s life. And we did live on a farm, so I will admit that this makes it a little easier.

[01:38] But I think this is totally doable in any city in any country. And I know you’ve got a really wide audience. And I love that about financial competency. You know, financial literacy is typically the word that we use. But you can’t homework money. You have to get in and experience it. And so my parents moved from one farm to another when I was in fourth grade. They got me a milk cow like they literally bought a physical cow that I had to milk that night when we brought it home. And we had the milk and the cream and that was lovely, but we had too much. And so we sold it. And later my sister got a cow and we milked and milked cows and sold milk all during my from fourth all during my childhood, fourth grade to 12th grade.

[02:27] And so it was an incredible learning space in personal finance, which I was then able to turn into teaching my young children who are now in their late 20s, some things about personal finance. And my adult children are both married and have their own kids. And they are also doing the work around this arena and all of their kids are under the age of three. And so it’s a really fun thing. You can get started super, super early. And yet also for those listeners that have kids that are teenagers or what have you, like anything in life, it’s not too late. You can make the shift. You can layer in the elements, which I know we’ll talk about in your family around the areas of financial competency. All right.

[03:22] So let’s start with the parents because financial literacy is not taught in school. So what if the parents are not financially literate? So where can they start? Well, that’s such a great question because it is so important to identify that us adults are not financially literate. And so I really encourage people to figure out first how they learn best. Do they like to read? Do they like to watch? Do they like to listen and then dive in and start the learning and be humble and say, I don’t know enough about this area. And every single one of us deals with money. You know, we may want to say, oh, money doesn’t matter, but it affects everything that matters. All of our relationships, our health, everything is affected by money.

[04:12] And so we might as well get it figured out. And what I love about the financial competency space is it doesn’t matter if you’re a young adult and earning just a little bit of money or in your 50s and earning just a little bit of money or in your 50s and earning a lot of money. Or I’ll go the other way, a young adult and earning a lot of money. It is so important to get the financial realm handled because if we don’t, it creates so much stress. And I’ll just share two quick stories. I’ve got a young family that I’m aware of, and they felt like they didn’t know anything about money. And I have books. I have podcasts. I have videos. They just dove in and they learned and they learned. And when they came to me, they had done so much learning in that space that I really didn’t have to do much to help them just tweak a few things and improve things.

[05:01] And one of the things we did real quick, as you know from our last podcast, is make sure that they were not depositing their earned income into their checking accounts, into where they pay their bills. Alternatively, I’ve got another young family. I’ve said to them numerous times, stop depositing your income into your checking account. Well, we can’t save any money. I know. Stop depositing your income into your checking account. Well, you know, we have all this credit card debt. I know. Stop depositing. No progress, right? They didn’t tackle it. And so that’s just right off the bat a really clean and clear distinction. And see, last sentence, Richard, on this subject is that the banks are typically the ones that are providing whatever financial education is out there.

[05:50] What do the banks want us to do? Spend all the money and keep it running through their systems. And so, you know, we have to use the bank. I’m not saying that you don’t use the bank, but make sure you use it on your terms. OK, you were talking before about giving kids allowance. Do you think that’s a good idea? I do not. So allowance is basically getting them to think from a very socialist standpoint. And I’m not making a political comment. It’s just a fact that when you give somebody something and they’re not clear on how they’ve earned it, then it just causes a mindset that is not good. And so we want to have our children have a mindset of providing value and being value creators in the home and outside in their communities and earning whatever it is that they’re being provided.

[06:51] Now, there are some basic things, obviously, that we are not going to have any type of money transaction on, you know, getting up, brushing their teeth, doing their spiritual reading. If your family does that, making your bed breakfast, you know, whatever you all decide as a family that are expectations for that child. I have three E’s that I’ll share. There’s expectations, right? You live in the home. You provide value to the home because we all do. And they should be very clear on the value that you’re providing to the home and the family. So that’s expectations, right? Then we want earnings. We want the ability for that child to provide extra value to have the opportunity to earn. So quick example is doing the dishes is expected.

[07:37] But those hand dishes that sit on the counter that nobody ever does that can’t go on the dishwasher, like that’s special, right? That’s extra. Somebody might get paid for that. That’s earnings. And then absolutely. And I know this sounds weird. It can start at age two. You want that child to have expenses. So what are expenses for a two year old? Toys and trinkets, right? Whatever little toy, whatever little candy, whatever little thing that they want to buy at the store. Great. Do you have your money with you? Super. Then let’s do that. And then as the child gets older and older, their expenses grow and grow. So another quick example, you know, sports shoes like the kids got to have spikes for football or whatever.

[08:19] Great. I’ll buy the $50 pair of spikes. But if you want the $70 pair, you pay the $20 difference. That’s your expenses. Lunches. Oh, my gosh. If a kid pays for their lunch, they will eat it. They will find a way to make that food work. And if that food doesn’t work for them, they will find a different way. So, so valuable. And it just goes on and on so that our families, when the child is 15, 16 years old, they have hundreds of dollars of earnings and expenses. And their expectations have increased, too, so that they are true value creators in their home and in their family and then able to go out into the working world and create value and earn even more. In my own experience, when I look back, I know the environment is very important.

[09:09] As I was growing up, there wasn’t too many people around me, whether it’s high school and going forward, talking about financial literacy. People wanted to make money, but I don’t think nobody really understood about how money works. So how do we get into a good environment for that, going forward? Yeah, it’s a great question. And you’ve got TikTok going on these days that just makes kids really be confused, frankly, about how true value is created and how to be a servant their entire lives, because that’s what we were put on this earth to do, is to serve. And so you want to find work that you can do that’s serving so that work is not a bad word. And I think that’s another somewhat unfortunate thing that’s come into our society these days is that work is not good.

[10:01] But, you know, we were put on this earth to do work and work is absolutely a positive thing. And if you can find work you love, then you really don’t ever work, right? You just do what you love. And so that’s a good thing. So circle me back. I want to make sure I’m answering your question properly. I’m talking about the environment as we go through high school or college or university. Like, how do we get like in a good environment? I know there’s TikTok, but in the day to day basis. Yeah, that’s it’s such a great question. I think it comes down to being really careful about who you are hanging out with, what you are listening to, and what you’re reading or watching. So I am aware of one of our family members that decided to change his entire friend group in junior high or middle school, whatever you call it,

[10:57] because he realized that his friends were just heading in a direction that he didn’t want to go. And that’s a tough thing. You know, it’s a very emotional, very challenging space. When kids are in junior high and high school and college is so social, but that’s a really critical part. Then again, the other part, which is way more controllable, is what we’re putting our brains and our hearts, really. What are we reading? What are we watching? What are we listening to? And so if you just stand back and look at your situation, you have time. People say, oh, I don’t have time. Yes, you do. You’re just choosing to use it in a different way. And so if you are, for example, listening to music all the time, but you say that you want to learn something about investing in real estate, right?

[11:47] Great. Then carve out half of your music listening time and find podcasts or books to read or videos to watch about real estate. So that’s an example. And it’s just so critical that the kids, as they progress, be very purposeful about what they want out of life. Now, here’s the thing. Nobody knows, right? You do not know what you want out of life when you are in high school and college, but you can start to head in directions. And if you take some baby steps in a direction and then you realize it’s not for you, that’s wonderful learning. And you retool and you take some baby steps in another direction and you learn and learn and discard and just continue to be focused on it and purposeful about it.

[12:37] One thing people realize when they finish university, sometimes when they go into the workplace, they realize like when they start paying bills, they realize that the money that they’re making is not enough. So then they want to go maybe into business, into the entrepreneur, the entrepreneur space. What would you advise like to have knowledge in regards to starting a business or even buying a business? The most important thing is self knowledge first. So, for example, some people are super systematic, right? And I have an exact tip for how to get some of this self knowledge and they do ABCD really well. ABCD every single time. Well, they would be really good for a franchise. Other people are super into creating new all the time. They’re just constantly in creation mode.

[13:31] They’re not going to like a franchise because they’re not going to follow ABCD all the time. That’s an example of something that you can learn from the Colby profile. K-O-L-B-E. Colby.com is $55. It’s taken all over the world. It’s in like 30 some languages. It is the most valuable self knowledge tool that I’m aware of. Now there’s others that are helpful. There’s Myers-Briggs. There’s other personality tests. There’s free ones you can get on the Internet. Be conscious of what you pay for, right? Like something that’s worth $55 has more value than something that’s free. So be careful with that. Nevertheless, do what you can to do the self knowledge so that then when you’re pursuing the business to buy or the next thing to work on or job to get,

[14:26] you can be more closely aligned with your God given talent that you are then serving with, that you are creating value with. And that’s the last thing I’ll say as well is to be very give first oriented, very value created oriented. You know, if you’re at a job right now and you’re not feeling like you’ve got the capability to leave that job because you have your life sort of organized, but you want to earn more money, create more value in the job that you are in. Ask the people around you, how can I contribute more? Ask your boss, what could I do that would be even better? And just create value in your own space. Now, obviously some people turn that value creation time into side hustles and they get side jobs going and that’s a great way to do it as well.

[15:15] But it’s so important that we have the self knowledge so that we don’t get involved in something that ends up being very unhappy for us because it goes so against our grain of our natural talents that we bring to the table. So I love the Colby profile as a self knowledge tool. Sometimes people always ask if they have $5,000 or $10,000 worth to invest. A lot of people have different thoughts on that. Some people say first take that money and invest in yourself before you do anything. What are your thoughts on that before someone starts investing? That’s such a great question. Absolutely invest in yourself and something like the Colby profile would be a good example of that. But also attending a conference. Now you can take this too far. I know people that are literally professional conference attenders and they never implement.

[16:13] So you have to be careful with that. But there’s another thing that I think is so critical before investing and that’s making sure that you have that emergency fund. Now maybe this $5,000 is over and above your emergency fund, but I meet people every day and I ask them what is your emergency fund number? Like what is the amount of money that’s in your head and it’s super fun with spouses because there’s usually different numbers that you need to have to feel confident, to have peace of mind, to sleep at night. And so many people have never really put a number on that. And when they do put a number on it and then they can fund that emergency fund, just basic checking account or savings account at a bank or credit union, whatever.

[16:58] But not where your bills are paid. There is so much peace of mind there and then everything over and above that can be invested. So if somebody’s younger, their emergency fund might be $1,000, $2,000. Great. Make sure that’s in the savings account. Now you can go look for investments and make sure you’ve got some self-knowledge so that not only is your work in alignment with who you are and the talent that you bring to the table naturally, but your investments are in alignment with who you are and the talents that you bring to the table naturally because you know this very well. You can have two real estate investors side by side with very similar properties. One of them can do very well and one of them can fail.

[17:48] And it’s because of the human talent that they either bring or don’t bring to the table. So again, that self-knowledge as it relates to the investments that we’re going to pursue is very important. People sometimes they have wishes or goals. They want to be rich or they want to make a lot of money, but they don’t have like a target number in regards to that money. And especially it’s hard to make money like at a job because you’re at a fixed level and there’s only so much you can make. What would you say about that? It’s super important to have the why. You want to make a lot of money. Why? You want to be rich. Why? And if you don’t have that why, you’re not going to be able to pursue and overcome challenges, the things that you need to pursue and overcome.

[18:41] Because with money like that, whether it’s high income or high net worth, the being rich part comes a lot of responsibility. You have to have tax knowledge. You have to have investment knowledge. You have to treat the money properly so that you can treat your relationships properly because it does all come back to that. The human being that we are, we’re not human doings. We’re human beings. And so money just magnifies the type of human that you are. If you’re gracious and giving, then you will be more gracious and more giving with money. If you are not, then you will be more, you know, fill in the blank, whatever the negative aspects of human beings tends to proliferate out in the marketplace and money just magnifies that.

[19:37] So again, it’s really important to have that why. And maybe your why is to give a bunch of money to charity. Awesome. That’s legit. Maybe your why is to help your family with, you know, whatever they’re working on tackling in life. That’s legit too. Just be clear on it. So with the cost of living that is rising pretty fast around like almost everywhere, people are a little bit stressed in regards to that. What are some other things that people could do and see a brighter future in regards to their personal finance? Well, first of all, it’s very important to know that the cost of living has always been rising and it’s always going to rise. Expenses will triple every 30 years. It’s not on a linear scale. It’s a bit like a hockey stick, but your expenses are always going to be expanding.

[20:29] And I heard a great quote from Tony Robbins just last week, and he said that the best way to overcome inflation, which is expenses rising, is to become more. So back to the self-knowledge, right? Back to learning, back to failing, because if we don’t try things, we won’t fail. And when we don’t fail, we don’t learn. Sometimes we learn more from our failures than our winnings, right? And so I like to call them learnings. Like that’s a real word. The plural aspect of continuing to learn, continuing to be in growth mode is something else that came up on this Tony event. He did his big free event last weekend was that, you know, we think maybe that we’re not supposed to have problems, but it’s actually our problems that create the challenges in our life that make life.

[21:22] And if we don’t have problems, and you see this from time to time, life flatlines really fast. You know, somebody’s got their finances kind of worked out and they retire, which is, I think, one of the most detrimental things a human can do. And you watch them flatline. I mean, physically, mentally, emotionally, socially, it’s sad. So it’s just really important to understand that inflation or expenses rising is always going to occur. There’s no point in being stressed about it. That’s not going to help anything. Become more, learn more. We are all capable of more than we do. And so serve more, provide more value, get your mindset more in alignment with your true north, whatever that is, and focus on that.

[22:17] And as you know, we get what we focus on. Don’t focus on the things that you cannot control, like who’s running your country or what the Fed is doing or the inflation numbers or whatever. Those are all things that we can absolutely have zero control over other than voting, obviously. So focus on what you can control. How are you showing up for your family? What is the state that you are bringing to the conference that you’re attending or what have you? Are you there to get or are you there to give? Going back to when I was saying the person, if they had five thousand or ten thousand, they want to invest. Sometimes people receive or inherit a big lump sum of money. It could be 200k, 300k, 500k, or even people who win in the lottery.

[23:11] And then we see a lot of times they lose that money in a few years. So how can these things be managed more properly? Well, us as humans, for whatever reason, we always want something for nothing, right? We want to have great bodies, but we don’t want to go to the gym. We want to feel super good, but we eat at McDonald’s or fill in the blank. And so the money realm is no different. You must have the learning, the financial knowledge in order to keep the money. Earning money, whether it’s from an inheritance or working, that’s not necessarily the hard part. The hard part is keeping it. And because we want something for nothing, we want to go straight to those investments and all that fun, sexy stuff that’s super awesome to talk about.

[24:03] But do you notice that in the investment world, pretty much nobody ever talks about their losses? I have seen millions of dollars lost in my financial career because of investments that failed. And so if somebody does get lucky enough to win the lottery or blessed enough to have an inheritance, I really encourage them to take at least half of it and put it in some guaranteed environments. Maybe it’s a guaranteed savings account at a bank. Maybe it’s a guaranteed life insurance company that offers even more guarantees around death and around annuities and those very boring spaces. Where that money, at least half of that money, is absolutely positively going to be there and it is not going to get lost.

[24:55] And then you want to go gamble with the other half? Have at it. But just to split it, you know, we all know the statistics about lottery winners. Most of them declare bankruptcy within a shocking period of time. And it’s because they didn’t have the financial competency to know that they should have kept some of that money in a safe guaranteed place where it could not get lost and where family members could not cause them to lose it, right? Because that’s what happens a lot. People want to contribute to their families and emotions get involved and all of a sudden the money’s gone. And then the rest of it can be played with and there’s nothing wrong with celebrating and playing and cheering and all that.

[25:35] But at least take a 50-50 approach where guarantees are locked in and absolutely positively going to cause that money to be there for you, depending on how you set it up, sometimes for the rest of your life. Last words in regards to everything we’ve talked about? Well, thank you. I believe it all comes back to that prosperity thinking. And so whatever you need to do every single day, and sometimes for me it’s every hour, right? Things go haywire. Things are challenges that I have to tackle. It’s what is up here. And so we want to have prosperous thinking. I’ve got a great little one pager that I call Unbelievable Thinking, and it has prosperous thinking on one side and poverty thinking on the other.

[26:28] And this is free, right? What we’re doing with our minds and our brains is free. We make the choice. We can make the choice every single minute of every single day. It’s not easy, but it’s doable. And that’s the one thing that I recommend to everybody is to do whatever you need to do to put yourself in a position where you can choose that prosperous thinking. Because you’ll always make better decisions when you’re coming at something from a point of prosperity than a point of scarcity. Where can people learn more about your following? Prosperitythinkers.com. That is our main website, so Prosperitythinkers.com. I also have 11 books on Amazon, a 12th one coming in another year, over 600 podcast episodes, a YouTube channel.

[27:20] I’m on all the socials that are, you know, the mainstream ones. So I welcome questions. I love doing Q&A. That’s what we got to do today, and I’m always grateful for your questions. Thank you for listening to the Prosperity Podcast. To take control of your money and have it work for you, visit Prosperitythinkers.com.