What Every Teen Should Know About Money, Accumulating Wealth and Becoming a Millionaire (eBook)

INTRODUCTION

I remember it like it was yesterday.

At 13 years old I had just been picked up from my new school by my mother and grandmother. Grandma was driving her shiny black 1964 ½ six cylinder Ford Mustang that she had purchased brand new a couple years earlier and my Mom was in the passenger seat. I was in the back seat and began to sift through the couple of Racing Forms and Los Angeles Herald Examiner newspapers laying on the back seat while Mom and Grandma carried on some conversation. There was an article in the Examiner about a self made millionaire real estate developer/ businessman in Los Angeles that caught my eye and I began to read. Kirk Kerkorian, with no formal college education, basically 8th grade, was making millions upon millions. He had grown up in Weed Patch, California and eventually bought and sold Western Airlines and the MGM Grand Las Vegas three times.

As we came to a stop light on the corner of Manchester and Lincoln, there was a momentary silence in the car. Suddenly, I asked my Mom, “Hey Mom, how do you become a self-made millionaire?”

“I don’t know. Maybe you could start by reading the Wall Street Journal every day” was her reply.

And then the revelation hit me: “My Mom, perhaps the wisest woman in the world as far as I knew at that time, had no clue”. SHE DID NOT KNOW! After all, she was a teacher and college graduate; isn’t there some kind of handbook or “Idiots Guide” that shows step by step what actions to take? And now, as I thought about it, why weren’t she and Dad millionaires? And why is it I never saw a Wall Street Journal at our home let alone see either parent read one in my entire life up to that point? I was truly baffled.

Looking back on it now, grandma’s silence went unnoticed by me. Had I noticed, I might have asked her and gotten a much different response. While my grandmother wasn’t a college graduate she and grandpa had accumulated some wealth. They had come out west to California in 1945 bought a home in Westchester, a small motel in Inglewood and a couple of duplexes in L.A not far from the “BIG DONUT” (now called Randy’s Donut). Grandpa went back to work doing what he really loved at Arden Dairy on Slauson. Grandma got a real estate broker’s license and sold homes from Pacific Palisades down to Westchester and had just retired. She would buy a new car every 10 years and was an avid horse racing fan. (I spent many a day at Hollywood Park and Santa Anita with grandma starting from when I was a baby through grade school.)

This was so much different than my Mom and Dad’s experience. While my dad was stationed in Germany during the Korean War and while I was still an infant, Mom and I lived in the “Projects” in San Pedro with lots of other military families. Later, after Dad came home, Mom and Dad seemed to move us a lot. We lived in Pico Rivera, El Monte, Lakewood, Inglewood, Hawthorne and now Westchester where they bought Grandma’s house after Grandpa died. It wasn’t until my mid 40’s that I found out that the reason we moved so often was because they had lost the first three houses to foreclosure, according to cousin Tony Milton. More to come on that later.

This was the beginning of my journey into understanding the world of finances. I always wished I had a book like this when I was younger. I came to realize over the years that any book or study at home kit “guaranteed to make you wealthy overnight” was bogus B.S. What will make you wealthy is pure and simple: knowledge. Knowledge of how to grow money and make money be your employee.

“An investment in knowledge pays the best interest.”
Benjamin Franklin

The one thing Grandma, who seemed to possess what is known as “street smarts” taught me was to be wary of “con artists” and never let someone else control your money. Having been a young adult in the 1920’s she was fully aware of the original Ponzi scheme and was convinced that mutual funds in the 1960’s were the same thing and to be avoided. She also learned a lot from dealing with bookies all over town, some of whom were con artists to boot. She was the wiser one and never bet more than she could afford to lose. She was cautious and would never dream of letting someone else manage her investments.

If you’ve picked this book up and read up to here so far, I would like to congratulate you on your curiosity on how one becomes wealthy in the USA. I assume, because of the title you are probably a teenager or perhaps older and just inquisitive. Unfortunately, there isn’t exactly a single magic formula to become a millionaire. It took me until my mid 40’s to cross the “millionaire” mark and my mid 60’s to cross the eight figure bar. I made a lot of mistakes and I hope to show you how to avoid them as well as learn the things that do work to help you build wealth but especially things that will prevent you from gaining wealth. I am by no means a Mark Cuban or Charles Shultz. I am no tech guru, nor an inventor of some great gadget, nor a sports legend. My total inheritance from my parents was miniscule (around $7,000 if I recall, certainly not life changing). I’m just an average guy that figured out a way to wealth (albeit slow but sure) that hopes to share this information with some curious kid like I was. I may be called a self made millionaire although I owe a lot of thanks to people who helped me on my way in particular my wife who possessed street smarts, guts and follow thru to help us complete many projects. I can’t think of enough praiseful adjectives to describe the many things she did to help make our projects successful but persistence and follow-through are definitely a couple. I may have had the dream and the courage but she had the right amount of courage and caution needed to complete projects on time and within budget. I doubt we would be where we are if it wasn’t for her. I think we make a great team. She was beside me every step of the way. If I use the word “I” please know that it is really “we” in most cases. Hopefully, you can use our advice and be as financially successful and hopefully accumulate wealth even faster than we did by avoiding the pitfalls we experienced.

I can tell you one thing: My multi- million dollars isn’t much compared to other millionaires and I know I am certainly not the best at creating wealth. In fact, I’m almost embarrassed that I am writing this book when there are so many people out there with hundreds of millions or even billions. I just want you, at your age, to start thinking about and working toward your goal. The point is, you don’t have to be super smart “book-wise” in this country. So many less educated people have worked hard and made the right moves and become extremely wealthy self-made BILLIONAIRES, Kirk Kerkorian for example who never went past 8th grade. (Don’t you even think about dropping out!) And on the other hand, we have met lots of “educated fools” with multiple degrees, who couldn’t figure out their own finances yet had plenty of advice for others. In any case, I’m just happy to pass along what I’ve learned in the last fifty-four years and hope you find it useful. I hope this turns out to be the book for you that I yearned for at thirteen, that at least plants the seed of curiosity into your financial literacy education.

“He was so learned that he could name a horse in nine languages; so ignorant that he bought a cow to ride on”
Benjamin Franklin.

The sad thing is that the majority of schools never teach about financial literacy or even how to balance a checkbook. My guess is that, like my mother, who was a teacher, most teachers don’t know how to become financially independent, let alone comprehend some basic personal economic principles or perhaps the educational system doesn’t think you need to know this stuff until you graduate from college. I had a manager once who was an immigrant from Belize who had a sign on his desk that said “If you’re so smart, why ain’t you rich?” Turns out there are two types of education: The first is what you learn in school and the second is what you learn in real life from experience sometimes called “street smarts”. You need both to make it big.

The majority of people however, seem to work their butts off and not “get ahead”. That was also part of my question at 13. My dad had a secure job working for the State of California in what was then called the State Division of Highways (now called Caltrans) in various capacities. He took a bus from our Hawthorne, California, house to downtown Los Angeles, First and Spring Street, to and from work. He would occasionally paint houses on weekends for extra cash or sometimes went to the police auction to buy bicycles for us to refurbish and sell. He was also in the National Guard most of my childhood which required one weekend a month and two weeks in the summer. My mom taught school full time at various Catholic schools in the South Bay and in the summer she would tutor kids in a makeshift classroom my dad built in the back house we had in Hawthorne.

I once asked my dad why the neighbors always seemed to have time on the weekends to watch baseball as a family, drink beer and BBQ at home whereas we always seemed to be working. Why have we never watched baseball on TV? His reply was perhaps because of his Midwestern upbringing of hard work but it was something along the lines of ‘that’s for lazy...