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Hello and welcome to Financial Savvy 101. My name is Chris and I’m going to be with you through this article. We’re going to kind of leave the conclusion of this little get together open to you.
Now, before we get started, this is an introductory post, meaning that I am offering financial education to anyone from one year old to 60 years old and above. Anybody that wants to let me into the class is welcome to. This class is going to be a series of four classes. Each one of them would be on a Saturday. Saturday mornings just seem to be the most virtual time for everybody to be available. It’s usually on Saturday mornings. So, that’s why we’re making this a Saturday morning class. Classes will be $50 per class, so a total of $200 investment.
Now, before you roll your eyes to this, the information that I will be passing to you cost me thousands of dollars. Why am I telling you this? To give you a little bit of perspective of the importance of the information that you’re going to be receiving.
What we’re going to be teaching you, what I’m going to be teaching you and the people that I’m going to be drawing from is what a dollar really is. How to make that dollar come into your pocket smoother, easier and faster? How to make that dollar go out of your pocket slowly and calculatedly? When that dollar goes out of your pocket, which way is it going to go and what is the best choice to make? We’re going to teach you how to make financial decisions. Do I pay off a bill or do I invest?
What is a dollar? And is dollar the only way to acquire the things that I need? What is bank statement? What is a credit card statement? What are W-2’s? Everything money, we’re going to cover.
Now, this is not going to be an A to Z class. We’re going to be going over all aspects of money, which means we’re not going to be getting very deep into any one subject. Now, I will divulge the resources that I have gone to that are much more expensive but they also go into more depth and detail on the information. So, this is what you would call your introductory class. If you want to get deeper into it, which I highly suggest, anybody under the age of 30 needs to learn money. Learn how money works.
So, we’re going to go through this. I’m going to give you the full rundown, give you a couple of tidbits, teach you a few things. If it sounds like it’s valuable enough for your time to invest $50 a class, I need at least five commitments to start the class. I don’t mind getting out of bed for one person. But it makes it easier for the materials that we’re using. It makes it easier for the time that I’m spending. It makes it more feasible to have at least five people here to make it worth my time and to cover the combined expenses and the cost of bringing this to you.
So, without further ado before we get started, does anybody have any questions? Okay, good. No questions.
All right. Now, let’s start off with Question One. What is this? It looks like a dollar, doesn’t it? Is that a dollar? Is this a dollar? Yes, it’s a dollar. What can you do with this dollar? You can buy things, right? Why can you buy things with this dollar? It’s kind of a difficult question. What do you mean by that?
Okay, why is it that you have that pencil? Are you willing to trade me that pencil for this dollar? Yes, you are. Why are you willing to trade me a pencil that can write notes, that can sign documents, that can jot down memories, that can document things, very useful piece of equipment, for a green piece of paper? It kind of makes you think. Why are you willing to give up a good, useful tool for a piece of paper with a green ink on it? Because if that writes in green, you could probably make one of these, right? And it would be worth just as much per se, basically.
Now, why am I bringing this up? Are you willing to trade me that pencil for this dollar? You said yes. Are you willing to trade me that pencil for something else, maybe a Pepsi or a Coke? If I [inaudible 07:16], would you be willing to trade me my cellphone for that pencil? Yeah, you would, wouldn’t you?
Okay, let’s delve into that. Why would you be willing to trade me that pencil for this cellphone? In the simplest term, as simple as you can put it, why? More than, yeah. Because you want this more that you want that, right? So, why do more people want this dollar?
Why do people want this dollar so badly? Number one, because everybody will accept it as a trade, right? You can take this dollar to anybody in the United States and you can use it as a resource to trade for something else, right? Maybe a few more of its brothers and sisters, but it’s still a dollar. It’s still a piece of paper, and people are willing to accept it and trade for something else.
Now, before the 1960s, why was this dollar so valuable? Some of you would be able to answer this one. Very good. Thank you. actually, in the 1940s. if you’re looking at here at the bottom, it says tender one note. This piece of paper was backed by gold, which means you could go to or you’re supposed to be able to go to Fort Knox the bank anywhere that deals in US currency. And at the time, you should be able to trade one ounce of gold for one dollar. The one note stood for one ounce of gold.
Gold has been universally accepted, I mean worldwide, as a source of currency, a source of value. Does that make sense? It is worth something. Everything wants it. Everybody is willing to trade for it. So, something that everybody is willing to trade for makes you more powerful and makes you more valuable. So, you are able to use this to trade for a car, trade for a computer, trade for a cellphone or trade for a pencil.
Well, people can’t tow around hundreds of pounds of gold. It will rip their pockets. So, the government’s evil wisdom—I can say evil because I’m not afraid to say it. By the way, nobody is recording this because I’m going to be saying things that might be controversial. I’m going to be saying things that are little bit offensive. So, I’m going to be trusting that you do not record this or any other class. This one’s for free, so I could say what I want.
But the government, in their infinite wisdom, decides to make a mandate that everybody turn in their gold and in return they would be given a piece of paper that represented the gold that they turned in. If you turned in on ounce of gold, you get one dollar. If you turned in 10 ounces of gold, you get $10. If you turned in 100 ounces of gold, you get $100. If you turned in 10.7264 pounds of gold, then you get 7.62 equivalent in dollars in change. Now, your gold is in the form of the dollar.
But what happened in the 60s? They took us off the Gold Standard. So, basically, this is what I’m talking about. One ounce of gold is tied to one dollar. You should be able to go back to the government and say, “I want my gold back.” If you give them the dollar, they give you back your gold then everybody’s happy.
But they were fleek about it. After they got all the gold turned in and people got accustomed into using dollar bills and everybody agrees and everybody demands this dollar is what they’re looking for, this dollar is worth a value, now they took you off the Gold Standard. Now, they’ve got your gold free and clear, the currency that has been universally accepted as a medium, as a way of buying things, as a conduit for trade. Remember that word, conduit.
This gold was a conduit for trading. Just like the Indians, they traded you for your gold for a handful of beans. Now, you’ve got a bunch of paper. Not beans but you’ve got paper. Now, with a pull of string, a little signature on a piece of paper, and signing of a document, they’ve got your gold and it is not tied to that paper anymore.
So, what makes this piece of paper valuable? What makes this piece of paper valuable now if it’s not backed by gold. Public opinion. That’s where it boils down to. As long as people agree, in unison, that this dollar will buy x amount of whatever, as long as everybody agrees that this dollar has value, it’s still alive. But because it’s not tied to something tangible like gold, people are starting to have opinions on how much this dollar will buy.
Now, ladies and gentlemen, the new word of the day is inflation. Each year, how much this one dollar will buy goes down? How many of you know what a seesaw is? Raise your hand. Yeah, you know what a seesaw is. If one side goes up, the other one goes down, right? Well, there’s a lot of stuff that we’re going to be talking about, and you’re going to be thinking about a seesaw. One is inverse to the other. If one goes up, the other goes down. Or one may be the same as the other. If one goes up, the other one can’t go up. So, keep thinking about that. There are two sides to everything that we’ve talked about.
So now, I’m going to word it one way. This dollar used to buy one pound of groceries. They took us off the Gold Standard. Now, this dollar will only but half a pound of groceries. And next year, it will only buy a quarter pound of groceries. See the power when they say the strength of the dollar is going down? That’s what they’re talking about. The dollar is going down in value, which means you’re either getting less for that dollar or you could say it takes more dollars to get that pound of groceries now. Instead of a dollar for a pound of groceries, now it takes two dollars for a pound of groceries or three dollars for a pound of groceries. Next year, it’s going to go up to four dollars for a pound of groceries because people are getting always greedy.
Human nature, people are always greedy. And in unison with that, people try to get more dollars for the goods and services that they sell. So, what took you 85 cents to buy a loaf of bread back in the 90s, now it takes $1.50 to buy a loaf of bread here in 2018 or 2019. Inflation about a dollar. Inflation goes up, which means what you’re getting for that dollar goes down. Everybody understand that now?
Okay. Now, let’s talk about what can that dollar buy. It can buy anything, right? If you’ve got enough of those dollars, you can but anything if the seller is willing to accept it, right? Yeah, if the seller is willing to accept those dollars or the seller is willing to accept that amount of dollars then they are willing to trade you what they are selling for what you are offering. If you are offering $5 and they’re willing to accept it, they’ll sell you what they are selling. Say a pair of shoes. Well, can you buy that pair of shoes with something other than dollars? Yeah, you can, can’t you?
What else could you trade the seller? Everybody sells you something. If you go to the grocery store and you buy really good groceries, who is the seller? The grocery store, yeah. If you go to the car dealership and you’ve tried to buy a car, who is the seller? The car dealer, right. It goes on and on. Anything that you acquire, if you acquire something in trade for whatever else, you are the buyer. Or are you?
If you get something in exchange for something else, are you the buyer or are you the seller? I’m warming your brain up to expand a little bit because there’s a lot of different ways to think about all of this. Every bit of this, there’s two sides of it. So, are you the buyer or are you the seller?
Tennis shoes and dollars. You’re buying tennis shoes, what are you selling? You’re selling dollars. You’re selling your dollars in exchange for acceptance of a pair of tennis shoes. The clerk that you went into, his store, he is selling his tennis shoes in exchange for dollars. What else could you use to buy those tennis shoes? Could you use your pencil? Could you use this desk? What could you use to buy those tennis shoes from that clerk?
The other guys, I want you to answer this. What else could you use besides dollars to acquire these tennis shoes? Thank you. Very good. Excellent. Anything the clerk is willing to accept. If you want those tennis shoes and he desperately needs a shirt, if he’s willing to accept the shirt off your back in exchange for those tennis shoes, is that a trade? Yes. Which leads me into my next little side note. What do you need in order for the trade to happen?
Okay, you’re making an exchange. One needs to happen for this exchange to be completed. You need a meeting of the minds, right? Yeah, you need a meeting of the minds. They have to be willing; the counterpart has to be willing to accept your offer. If you’re offering the shirt off your back, if you’re offering dollars, if you’re offering whatever, your counterpart has to be willing to accept what you are offering and you are willing to accept what they are offering. If they are offering tennis shoes, you are offering the shirt off your back.
They want your shirt; you want their tennis shoes. You make the trade. Is that a meeting of the minds? Yes, it’s a meeting of the minds. That is a trade. You bought tennis shoes. They bought a shirt. What did they buy the shirt with? The tennis shoes. What did you buy the tennis shoes with? Your shirt.
Yeah, I started to feel your brain kind of expand there a little bit on that. Yeah. I understand you all still got some of this on your belt. But the other guys, and they’ve heard some of this before. This is why I want you all to talk to each other. I want you all to share ideas, because that’s what this is all about.
Financial freedom, financial savvy is all about learning what can you do with trading.
Finances is nothing more than the ability to horse trade. You’re a horse trader. Now, how many of you guys can tell me what a horse trader is? Yeah, somebody says someone who trades horses. But the expression of a horse trader is simply put as somebody who has a knack for trading. Anything for anything. So, your ability to trade is going to be your number one tool. Your number one asset is your skill and your ability to trade something you like less—the pencil and the dollar or the pencil and the cellphone—for something you like more.
That’s what trade is. It doesn’t matter what the value is. No, its value is based on what? Now, think about it because I didn’t tell you what we’re talking about and I didn’t tell you how much anything costs. And I didn’t tell you who’s selling it. So, with that statement, it’s kind of hard to answer, but what is the value of anything? What is worth to the recipient? That means if I need that pencil more than I need this cellphone, then that means this pencil is worth more. I didn’t tell you to go to Walmart and look up the price of this pencil. I didn’t tell you to go to Verizon and look up the price of this cellphone. Because if you do, this pencil is worth a whole lot less than this cellphone, right?
Well, let me give you an example. A friend of mine is a real estate investor. And this girl was trying to get herself to college. She was a second-year and she was having financial troubles. And she desperately needed some help. And she got to talk with a friend who told her about a house that they were selling. And she said, “I don’t have the money to buy a house. I don’t have time for a house. I’m going to stay in my apartment” and so on and so forth.
So, she didn’t buy the house. But she went to my real estate investor friend, and he heard her talk about this house. He said, “How much are they going to sell the house for?” and she told him. He goes, “Do you think they would be willing to do some reeling and dealing?” She said yes, and she took them to this house, and the sellers talked to him. And in the midst of talking to them, he made a deal with them and he bought the house. Well, he didn’t buy the house yet. He made a simple agreement with them. He made an agreement and he had a handshake.
He told her, “Well, this sound like a pretty good deal. You found it. What do you want for it?” She found this deal. She found this opportunity. And she took him to this opportunity, and he found out that she was in college and she’s a computer programming major. She doesn’t have a computer. She can’t afford one. So, he went out and he told her, “I’ll tell you what. How about I give you 300 bucks and a new laptop?” And actually, the laptop he was talking about was the one that he already had. He said, “I’ve got $300 and I’ve got a laptop that I’ll give you if you let me buy this house from them.”
So, they came up with it. They traded the deal on the house for the laptop. Now, he bought this house, and this house produced $400 a month income for him as a rented property. Now, knowing that, which is more valuable, the house or the laptop? Now, say in the hands of the investor, my friend, that laptop was almost worthless because he wasn’t that computer savvy. He did okay, but the house was worth more to him because he can make the house produce income.
How about the computer? The student, she was a computer major. She took that laptop. And not only did she do all her homework and was able to get straight As, but she also used it as a medium to start doing programming jobs for some of her friends and her family. And in less than three months, she was making about a thousand dollars a month and doing programming repairs with that laptop.
So, if you ask the student which one is more valuable, she’s going to say the computer. If you ask the investor which one is going to be more valuable, he’s going to say the house. So, which one is more valuable? It’s up to the recipient. Yeah, because he got a good deal on an investment that he understands and he liked better. She got a good deal because she traded something that she didn’t understand for something she liked better.
And that is horse-trading. You don’t have to understand. You don’t even have to know what the value is. You just have to know that somebody values what you have. And if somebody values what you have more than what they have, they are going to be willing to trade with you. It doesn’t have to be dollars, no. the only difference is more people are willing to accept dollars.
All right. That concludes this little recording. Our classes will be starting soon. We’ll be sending out flyers, but this is just the tip of the iceberg. Now, our first class, our paid class $50 per person, it will be two hours at least. And it will be on a Saturday. We’ll be sending out flyers on the start date as soon as we get enough entries in.
Our first class will be kind of delving into this a little bit more, but we’ll also be going into paycheck money, investment money, different kinds of income and why one is better than the other. We’ll be talking a little bit about taxes. What kind of taxes? Is there a kind of tax that’s better than the other? Is there a kind of tax that you would rather pay one versus the other?
We’re going to get into income. We’re going to get into taxes. We’re going to get into different ways to bring income in and different strategies to make income come in even when you’re asleep.
So, tune in. and we will talk to you soon. This is Chris. And that’s the end of this one.