A letter to my children about money.

On the subject of money,

Keep in mind that money is a lot like religion, politics and health. People believe they have the one truth and they will defend it passionately. But there are many paths, you need to find the one that best fits your character, appetite for risk and time.

That being said, there are some general principles to think about.

Disciple is freedom: If you want financial freedom, then you need money disciple to spend less. Be disciplined with your money. Seek to master money or you will be a slave to it.

Assets not liabilities: Invest in assets not in liabilities. An asset increases your money, a liability requires your money. Knowing the difference is not always clear. If it was, everyone would be wealthy.

Compounding: Compounding is passive and it is your best friend. It grows exponentially, so the earlier you get started the higher the multiplier.

Pay yourself first: Put 10% of your income into assets.

Don’t lose money: Know your downside and do what you can to protect it. $100 lost, means you need to return 100% on the next $100 you invest.

To good to be true: If it sounds to good to be true, it properly is. There are no shortcuts in life.

Be thankful and give: Money can make life easier, but it is not the measure of a person. That is your ego speaking. No matter what a person’s lot in life, if they are working to provide shelter, food and education for there family. They are your equal. Treat them with respect. The majority of the world live off $101 a day. So be thankful.

Money is time: When you spend your money, you are spending a little bit of your life. The value of your time is proportional to the value you add. The more value you add, the more people will pay you for your time.

Be a creator: Consumers spend money. Creators add value. They make things consumers want to buy. So be useful.

Means: Give each dollar a job. By doing so you are only spending what you have – staying within your means. And you are aware of where you are spending your money. Spend within your means.

Live Minimally: Be aware of what you want and what you need. Buying what you need, only when you have to. There is always a new widget, a new update. Only buy when you need to.

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