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The How Money Works team reached out to me a couple of months ago about checking out their book How Money Works: Stop Being a SUCKER. I had never heard of this book before and was looking for a new personal finance book to read but what can I say, it was the title for me. The title definitely sold it.
I started reading it shortly after it arrived and the first thing I noticed was the community of characters introduced at the beginning. I found these characters to be like you and me or people we know which helped to set a relatable tone that’s carried throughout the book, which is important because when teaching a topic like financial literacy, books can be really stuffy and can lose a reader’s interest when it’s too formal and technical.
The authors waste no time in giving us the (needed) reality check that financial literacy is a global economic crisis and that most of us are suckers because we really don’t know how money works. Now some people may find that offensive but you know that I am all about telling the truth so I didn’t mind it at all. Unfortunately, the truth is many of us are suckers. We’re suckers because we haven’t taken the time to learn how money works yet somehow we’re just supposed to miraculously become wealthy. We’re also suckers because we’ve relied on these big banks and credit card companies to have our best interest in mind, *spoiler alert* they don’t. Without basic financial literacy we really are, as I like to call it, hustling backwards and the consequences can be severe.
I love the amount of time and attention the authors give to explaining the concepts of compound interest, time value of money, and the Rule of 72. They also provide examples to help you understand how these concepts can be applied. But the rule of 72 is a GAME CHANGER. It’s a rule that helps you determine how long it takes for your money to double given a fixed interest rate and it’s not always talked about. But once your eyes have been opened to the Rule of 72, you cannot close them. Get it? It’s an eye opener. For example, many of us have money saved in High-Yield Savings Accounts (HYSAs). Pre-pandemic, let’s say the interest rate was at 1%. Using the Rule of 72, it would take 72 years for our money to double…SEVENTY TWO YEARS!
Oh the Rule of 72 doesn’t just apply to how your money grows in savings. You can use the Rule of 72 to determine how long it takes for your money to double for someone else. Yep…like credit card companies. Say you have a credit card with an interest rate of 15% well based on the Rule of 72, it will take 4.8 years for your money to double for them. Do you know what they do with the income they make from charging you interest? They invest it to make even more money. They also pay out bonuses and also take company vacations with YOUR money.
I told you…eye opener! This is also why getting out of debt should be a priority so that you have more of your money and can put it to work for YOU.
Now that our eyes are open to how money really works, the book takes us through 7 Money Milestones or steps we need to take in order to achieve financial security and independence. You’ll find #4 a no-brainer!
Also in between lessons there are short knowledge checks and exercises to help you know where you are and what you need to do to get to where you want to be financially. There are also “Sucker Mindset vs Wealthy Mindset” examples through the book that I really appreciated because having the right mindset is so important to achieving success on any journey.
How Money Works: Stop Being a SUCKER was an informative yet easy read; about 110 pages of text with a 2-page worksheet to help get you started on your path to no longer being a sucker. I definitely know more about money after reading it and I highly recommend that you and everyone you know give this a read…you won’t be disappointed. You can grab How Money Works on Amazon and anywhere else books are sold.