Rebel With a Cause: A Smarter Way to Think About Money

Dear Grace and Steven, 

One of the things I love about you two is you are not conformists.  While being rebellious doesn’t serve you very well when you’re a teenager, it can serve you VERY well as an adult.  This is especially true when it comes to money because the vast majority of people do it wrong. 

They fall prey to the commercialism of America and think happiness comes from beating your neighbors in the possession war. 

It’s not surprising.  We’re bombarded with information about how great the latest gadget is and how easy it is to buy it.  You grew up with it.  You had to have this certain cereal and these My Little Ponies because that’s why all these little faces on TV have such big smiles. We rarely are shown how great it is to have a big investment account and how easy it is to build it.  I’m going to quote J.L. Collins again,

“It’s not hard. Stop thinking about what your money can buy. Start thinking about what your money can earn. And then think about what the money it earns can earn.”

Say you find a one hundred dollar bill lying on the ground.  It’s found money!  YAY!!!  What can it get you?  Well that’s easy.  A pretty nice pair of shoes.  A very nice dinner for two with a couple of drinks.  This is the way the vast majority of people think.  If you’re in the minority and you’re smarter with your found money, you fill your car with gas a few times or put it toward your rent. 

But…..what if you’ve decided to change the way you think about money and you are living with J.L. Collins’ philosophy in mind?  You invest that $100 and forget about it for 40 years.  I know 40 years seem like a long time but you two might just live to be 100 years old.  That’s only about half of the rest of your life.  In other words, when you look at that investment 40 years from now, you’re going to have about 40 years to go! The pair of shoes will be long gone.  The dinner for two with drinks will be gone the next morning. The $100 investment?  Well, 40 years ago I was 15 years old.  I had a summer job and no bills.  I’m sure I held a $100 bill in my hand numerous times.  I don’t know for sure because it’s long gone.  If I had known to think the way J.L. says and invested it, I would have roughly $6,500 right now.  If I had tucked away $100 every month moving forward for those 40 years, I would have over $600,000. 

Money’s greatest power is compound interest and time. You have both. 

Love, 

Dad

- Paul Mollenkopf is the author of Once Upon a FI