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I once read a study where they offered to give children some candy but in this manner: If the child was willing to wait for a period of ten minutes before taking the candy placed on the table in front of him or her, the child would be given another candy. The more ten-minute periods the child could wait, the number of candies given would double. I wish I could find a copy the study online so I could link it here, but it turns out that children who could delay their gratification would later on be more successful in life. Children who could not control the need for instant gratification didn’t get very far in their lives.

Candy at a souq in Damascus, Syria.

I want candaaaaaaay! I want caaaandaaaaay!

Last week, during Lesson #1, we explored the history of money and what it actually is. The takeaway from that was the understanding that if we want to be wealthy or at least financially stable and debt free, we should be acquiring things that retain or increase its value over time and not the reverse. Unfortunately, the dollar (or any other currency for that matter) does not fall into this category.

Here in the U.S. there are so many factors that deny your money a chance to grow unless you convert it into something else. For the average person who is employed, he or she is taxed upon earning that paycheck (Income Tax). Taxed again when spending that paycheck (Sales Tax). Taxed again when saving that paycheck (Taxes on Earned Interest). Inflation will also come into play and diminish the remainder of the money you have managed not to spend. Oh and don’t forget the so called Death tax (Federal Estate Tax). In the future, we will discuss how to legally pay as little in taxes as possible.

Now before we go any further, as a disclaimer, I don’t pretend to be a professional in this matter. I am not licensed to give out money advice nor do I do this to make a living. I am simply sharing what I’ve learned and what has worked for me. I challenge you do to your own research on what I am sharing. Please feel free to email me your thoughts, questions, or (constructive) criticisms.

Okay, with that out of the way, you may be asking “So, what can we do to be financially stable?” The basic concept behind the answer is simple. Collect assets and avoid liabilities.

Cover of "Rich Dad, Poor Dad: What the Ri...

Written by Robert Kiyosaki.

As I’ve learned from the lessons of Robert Kiyosaki and his series of educational books and games (Rich Dad, Poor Dad, Cashflow Quadrant, Rich Dad’s Guide to Investing, et al,) assets are things that gain or retain value and put money into your pocket and liabilities are things that lose value or take money away from your pocket.

Sounds simple enough that any kid could do it, right? Well, you’d be surprised at how many people out there can’t grasp this commonsensical attitude. People still dive into debt for an expensive car, not realizing that it is perhaps one of the fastest things you can own… that loses its original value.

This really isn’t anything you don’t already know. Similar to my recipe for losing weight, in order to gain control of your finances, two things or some combination of both must happen:

1) You make more than what you spend.

2) You spend less than what you make.

English: Albert Einstein Français : portrait d...

Professor Albert Einstein, theoretical physicist.

Today’s world can seem overly complicated, but as Einstein has reputedly said, “Any intelligent fool can make things bigger, more complex, and more violent. It takes a touch of genius — and a lot of courage — to move in the opposite direction.”

So try and keep things as simple as possible that still fits your needs. Try to trim off the fat. Cut off the bills that you can live without. Live beneath your means. Don’t play the ‘Keeping up with the Jones’ game, as it is a never-ending game with no clear definition of when or how to win. Sell off some of your stuff. Downgrade what you can that isn’t essential. Learn to embrace the minimalistic way of life. Collect experiences, knowledge and memories, not appliances, cars and things. But most of all, if there’s just one thing you take away from all of this, I hope you’ll remember the study I was telling you about earlier, before we began the lesson. Learn to delay your gratification… Don’t take the candy just yet!

I hope you learned something new from all this. Next time, I’ll give out some tips on what you can do to gain control of your finances. Until then, have a happy Monday!