The path to prosperity: building wealth that lasts

Chris: Welcome everybody to another episode of the Ag View Pitch. Today we are going to talk about the path to prosperity, and I've got with us today Mike Finley again. Mike, how's it going?

Mike

Finley: I'm happy to be here, Chris.

Chris: Well, it's great to have you here again. We've had Mike here, I don't know, probably 5 or 6 different times on the podcast. You've spoke at our conference twice at least, right? 2 different times, I think.

Mike

Finley: Yes, sir.

Chris: On kind of financial management and personal finances and how to grow wealth personally, I guess. Wouldn't— is there a better way to say that?

Mike

Finley: Well, I think I've been talking them through the path to prosperity.

Chris: Yeah, that's for sure. So, well, today I guess what we want to do is you wrote a new book called The Path to Prosperity, since that's the title of what we're talking about today. And so I kind of want to go through that as a, as a good interviewer. Obviously, I didn't read the book yet. And so we talked about that before we started recording that this will be part 1 and we'll do part 2. But what we're going to talk about today is what's in the book and the importance of getting to that path and then working toward that path to prosperity and what that means. I guess with that said, too, I want to mention to everybody that when we do part 2, If you're a subscriber to 19 Minutes, we will be sending you this book, The Path to Prosperity, as well. For those who are subscribed to 19 Minutes, if you're not, check in the show notes here and you can subscribe to 19 Minutes.

And I think the first 2 weeks is free too. So you can go ahead and get signed up, check it out. We've got about 80 or 85 videos in there on all kinds of business topics. With that said, Mike, let's roll here with The Path to Prosperity. I want to just open it up to you for— to you first, just to kind of give a blanket statement on what drove you to write this book, On the Path to Prosperity, and what's it mean to you and why?

Mike

Finley: Well, I had written my 4 previous books years ago, and what I try to do is just let the book come to me. And last year it showed up, the ideas of what the book is about., was formulating in my mind, and it was time for me to put it on paper. And so that's when I started thinking about this idea, which is what would happen if a young person starting on day one, the day they're born, makes all the right financial decisions? And of course, that means mom and dad have to make them for them. They have to teach that child. They have to help the child learn what to do with that money as they go out into the world. But it was this idea that we could set a young person up for success in life in ways that very few people have had the opportunity to do, including myself. Mm-hmm. And so the book is really the, the journey of reaching the path to prosperity. And it is a journey.

It's not something that you just happen into. Uh, you go through, uh, some trials and tribulations, and one of the goals is to not learn things the hard way financially. So mom and dad did, and they had to overcome those mistakes, and they wanted to make sure their children did not have to learn these financial principles the hard way. And that means you're learning from the right people.

Chris: Yeah. And I think, you know, I'm gonna, I'm gonna back up just a little bit too, and And as you well know, a high percentage of our audience are farmers, producers, and agricultural business people. And I think we're super guilty of where I put the money in the land and in the farm or back in the business. But what you're talking about here is thinking about the legacy, not just of the legacy of the farm, but the legacy of, you know, your kids, your grandkids, and all of the next generations coming on. Because if they can do that, the farming part is all going to come along with it too, right? Talk a little bit about that.

Mike

Finley: Because, you know, I certainly understand why the farmer wants to invest in the farm. But I would make the case we should be investing in our loved ones and our family, our children, our grandchildren. And we can invest with them, in them, with this knowledge, this knowledge that will set them up for success for generations to come. Uh, we can pass this information on showing somebody how to get their personal finances in order. So their life becomes something that, uh, they can build on. Even with the trials and tribulations we go through, as, as people go through the difficult stages in life, if you get your finances in order, those difficulties are not nearly as traumatic.

Chris: Mm-hmm.

Mike

Finley: If your finances are not in order, the catastrophe becomes in some cases overwhelming for many people.

Chris: I'm going to back up again here on you. You talked about the right financial decisions. Describe what that means. Explain, you know, what is the right way to do it? You know, is it a certain dollar amount per month? Is it, you know, what is it different for everybody? You know, talk a little bit about what that is. What is the right financial decisions?

Mike

Finley: So it almost, uh, starts with the idea that we need to find the right teachers. And so many of us start in the wrong places, myself included. We start learning from commission-based salespeople who call themselves financial advisors or life insurance agents. That's a mistake. And the father in this story made that mistake. He wanted to make sure his son did not make that mistake. And so We need to find those teachers out there who are going to educate us on how to manage our money wisely, how to save, how much to save, where to invest, how to do it efficiently at a low cost, and then how to keep doing that over time. So we're finding the right teachers and then learning and repeating that— those habits that create prosperity over time.

Chris: Gotcha. Is there a Um, is it, you know, so I guarantee there's people listening here saying, well, I got a 5-year-old, I got a, I got a 10-year-old, I've got, you know, a family that's in middle school age or whatever. There's never a wrong time to start either, right? Is there? You know, what do you tell these people, you know, that are sitting here thinking, well, is it too late for me or should I have gotten going quicker?

Mike

Finley: So I would say the time to start is now. That's the time right now. Don't wait. Don't delay. Don't say one day. Get started because time's going to go quickly. And we all know this as time goes along. So wherever you're at, start learning and doing the right things for you and your loved ones and then build on that, teach them. And so the younger we get started as individuals doing the right thing, the better off we're going to be because it's all a matter of time in the market that matters. The more time you have doing the right thing over time allows for that compounding effect to have just amazing results over time.

Chris: We'll get to that one in a minute. I want to ask you about the, the teaching part because, you know, we talk about finding the right teachers. The kids are going to have to rely on mom and dad, right? So mom and dad or grandpa and grandma are gonna have to do a bit of work to find out who they need to talk to. You know, not to throw names out there, Edward Jones or any of those kinds of places, but you know, any of these places that, you know, their commissions are really high even though they tell you they're not. You know, they can say whatever they want, but you know, I've had you look at a lot of these and you can pull the dirt out really fast and show what's really going on. With that said, you know, who are the teachers that they should find? And then talk a little bit about the custodial Roth IRA and the importance of that.

Mike

Finley: So let's just stick with two teachers for now, and that's John Bogle and Warren Buffett. Two wonderful teachers. If all you did was to go on YouTube and start watching videos from Warren Buffett and John Bogle, you're going to come out so far ahead of the game. They are teachers. They will help you do the right thing, understand what the right thing is over time. So those are two wonderful teachers. I could sit here and rattle off another 20. The point here is we want people who are going to educate us, try to do— give us the right advice to take us down the right path without selling us anything, minimizing the conflicts of interest. Because the average person, they may think You know, if I'm, if I'm only paying 2% a year in fees, well, that doesn't sound bad. Yeah, it's a huge difference. It could be a difference of hundreds of thousands of dollars over time. Hundreds.

That's either in your pocket or some financial advisor's pocket.

Chris: Talk about the custodial Roth IRA then. So what should they, you know, if mom and dad are thinking about this, they watch some of those videos, they start thinking, okay, I'm gonna I'm gonna go down this path, this makes a lot of sense. What, what, you know, what should they be investing in?

Mike

Finley: Yep. So first, that custodial Roth is when your child is working, could be working on the farm, could be working somewhere else, but they have a paying job. And so because of that, you can open up a custodial Roth IRA in for them that you will manage until, based on the state, in Iowa it's 21. That's when it can get transferred over to their personal Roth IRA. I would be investing in an index fund like VTSAX or Small Cap Value, VSIAx. Those are two funds that you'll see throughout the book. Uh, for example, VSIAx, that's a Vanguard Small Cap Value Index Fund with a basis point expense of 7 basis points, 0.07. So it's very, very inexpensive of a fee. That fund, if you'd have put $10,000 into that fund 53 years ago, it would be worth today, almost to the dollar, $8 million with no additional money added.

That's simply the compounding effect at about 13.5% per year is what it's averaged to get you to $8 million.

Chris: Interesting. Yeah, that makes me sick, kind of, you know, just because I'm 50, uh, gonna be 59 this year, and I'm thinking when I was 9, I could have, you know, even on our line of credit, we could have borrowed that $10,000 and just invested it and then paid that off over a year or two, even if we had to roll it, you know, and, and leave it there. Like you said, that compounding is huge when you put it that way, for sure. Um, any other comments on the custodial?

Mike

Finley: Well, the other great benefit to it is the child is learning a work ethic. They're learning how to work even when they don't want to. I was a kid, I didn't always want to work, but you have responsibilities, and, and that's taught and that's expected. And so as your child is accumulating money, they're also learning how to work hard for it, how to manage it, how to take care of it, how to be a good steward of that money over time.

Chris: I think the key is, is not making money too easy too. I think, you know, as you were making some comments earlier in a conversation before we started recording, that, you know, it seems like if you come from a family that does— even if they aren't, but they appear to be fairly wealthy— and you make it too easy for the kids, you know, you buy them their cars and you buy them their stuff, that kind of dilutes the equation. What was it you had made the comment on about the 3 generations?

Mike

Finley: Well, the first generation makes it, second generation spends it, third generation starts all over. We want to avoid that. And the beauty of the custodial Roth, the child is funding it, not mom and dad, the child. They're working and they're taking their job, their earned income, and they're funding that Roth. They're taking ownership of this process of building wealth over time.

Chris: What about for somebody listening and then they just had a baby and they're thinking, okay, this kid's not going to work and for at least another 6 or 7 years until I'm going to at least have them doing chores or feeding the chickens or, yep, you know, running a grain cart or something at a pretty young age, whatever. What, what, what do you recommend there until they get to where they can quote unquote work?

Mike

Finley: That's where mom and dad in this story, they opened up a brokerage at Vanguard. A non-retirement brokerage. It's in their name, but it's earmarked for that child. So they start with a certain amount of money, could be, could be $20, could be $3,000. And then they fund it every month, just put in $100 a month consistently. And it goes into that fund, it compounds over time. Any gifts, any money that comes in for the child goes into that account. We remind grandpa and grandma that the child doesn't need as many gifts. What they really need is a little bit of cash that's just going to go there, compounding over time.

Chris: Yeah, I was just going to go there.

Mike

Finley: And it's the value of understanding that, right? So the monetary gifts, that is the gift that keeps on giving. That $100 gift, or whatever it may be, will be $200, $300, $400 over time. And that accumulation over time, starting on day one, can have a dramatic effect on how much is in there when they head out into the world. Think about this for a moment. Uh, a young person could easily enter the world at 18, 19 years old with over $50,000 in cash. They could have over $100,000 heading out into the world, ready to take it on with a financial education, understanding and knowing how to manage that money going forward.

Chris: Yeah, and I think to that point, you know, it's hard for sometimes for grandma or even mom when you get the kids, it's either— and sometimes it's spoiling the youngest, sometimes it's, it's the only child or whatever, and you get a lot of stuff, quote unquote stuff, you know. And Christmas rolls around and there's just too many gifts. It's like you said, you know, $100, it's going to go a hell of a lot further than, you know, $200 worth of junk that they're going to not even know it was there a year later.

Mike

Finley: Well, it's quite possible that 2-year-old may take whatever you gave him out of the box and play with the box.

Chris: Yeah, exactly.

Mike

Finley: So that tells us something, right? Are we giving that gift for the child or we giving it for us?

Chris: Right, right. Yeah. No, that's, that's really, really good. As far as understanding you know, the market? Are there any stories that you can divulge on a little bit, um, in the book without giving too much away? Any, any examples that, you know, what, what are they going to get out of the book when they read this? Or what am I going to get out of it when I read this so I can come back to you on part 2 and, uh, and give you my takeaways?

Mike

Finley: Well, I— what I would say is the path to prosperity is going to be defined differently by different people. I have my own definition, and it plays out as you read the book and you end up at the end. But it's a journey. It's a journey toward finding, uh, what I believe is the real truth of life. And I'll save that for the reader to read the book. But it's not about getting rich. It's about using money to to create a better purpose-driven, meaningful life. And if you can do that, you can find true happiness, uh, far outside of things or money.

Chris: Mm-hmm.

Mike

Finley: And, uh, ultimately that, that really gives a person this, this meaning that I talk about throughout the book.

Chris: Mm-hmm. That tells me, or my takeaway from what you just said is prosperity isn't always money.

Mike

Finley: That's right.

Chris: It's, it's what you do with it and how you manage it and how you manage your life.

Mike

Finley: That's right. Money. And it's, it's a lesson we all learn. I, I had to learn it too. Money simply opens up opportunities and those opportunities are what is going to bring us prosperity, not the money. The money is just there as a foundation to help us find the real purpose of our lives. Mm-hmm.

Chris: Having said that, talk about, you know, I think sometimes people in general, we think, well, I don't really have that extra $100 a month, or I really don't have, you know, how do you get around that? Because I think we're probably all in this generation, and by this generation, I mean the, you know, from about the senior generation, you know, those 70 and older and younger, So that's, you know, the majority of the population. We're pretty good at spending money. Um, you know, we see what other people have. I mean, I hear, you know, kids sometimes, you know, well, man, they must really have a shit ton of money because look at what they have. Well, they probably have a lot of debt too, right? You know, they probably don't have what you think they do. Or, you know, one Farmer A will look at Farmer B and think, how are they doing that?

You know, how, how can they You know, and sometimes it's like you, you said prior, prior to recording, you know, sometimes it's generational wealth and sometimes it's created and sometimes it's debt. Talk a little bit about the importance of frugality and, and kind of managing that. Any insight there?

Mike

Finley: So I would make the case, it's always a trade-off. So whatever money's coming into your life, you get to decide what to do with it. And where are you going to elevate that child's future? Where are they going to be on that list of priorities for the individual? And for most people, they could put away $100 a month for their child. They could. Now, whether they do it or not, that's up to them, but they could. For some people, maybe their finances are tight. Okay, maybe you put away $50 a month, maybe $20 a month. The point here is you're putting some money away, you're doing what you can And then you're sustaining it over time. But again, it's prioritizing. Uh, we, as a society, we have, we seem to have decided that looking wealthy was more important than actually having wealth and finding financial freedom. And you can do that in America. You can look wealthy and be broke.

Millions of people do that, but that's not setting your child up for success in life. And if that's our goal, if we're trying to do our very best for our children, then getting started young, doing the right things, getting that money compounding over time will open up so many opportunities in their lives.

Chris: And I think it's, you know, sometimes you hear that in, in society, well, that was never done for me. Well, that's, that's breaking the trend, right? It's changing the trajectory of how things have gone. You know, because you look at what the US, you know, look at the national debt. I mean, trillions and trillions of dollars every, you know, what are we adding, a trillion dollars every 100 days or something like that? I mean, the sustainability of the external part of this, that the big picture, right, the 30,000-foot view of the country taking care of ourselves is going to be really important, I think, as time goes on too, because it seems like the country doesn't know how to manage money, let alone a lot of the individuals.

Mike

Finley: Yep. And I agree with that. And the individual needs to take responsibility for it. You can change the dynamic, you know, no matter what you were taught as a young person or not taught, you can change that. You can change the direction of your life and your family's life. And that's one of the important messages within the book is ultimately it comes down to us and what we do with our lives.

Chris: So I think we're getting about wrapped up here. So what I want to do is, you know, this is going to be part 1. What I want to do is have you kind of leave the listener with your message for part 1 of the book, having not read it yet. What are they going to get out of it? Why should they read it? And, you know, what's, what's the, the main part of the message that they need to think about prior to reading it?

Mike

Finley: So the math is in the book, but you don't have to be fond of math. The stories are in the book. The stories and the math shows the reader how to put themselves in the right place financially so they can reach the path to prosperity. And it is a journey. You have to go through this. It's not every day is rainbows and butterflies. It's learning how to overcome the difficulties of life. It's learning how to manage life when it's going sideways. The Path to Prosperity gives you the opportunity to find that meaning and purpose that is waiting for you to find.

Chris: Awesome. So last question, if people or if somebody says, I'm not going to have him send it to me for free, I'm going to go online and I'm going to just buy it online and get it sent to me? Is there a place people can go to purchase the book if they want to?

Mike

Finley: As usual, Amazon, amazon.com. You can go to Amazon and it's right there for $20. And I would remind the reader that the first financial book I ever read was a $20 book, and that book easily, easily made me over half a million dollars. So never underestimate what a good book can do to change the course of your life and your loved ones and your loved ones. Right. Because ultimately, some people ask me, what's the age range for reading this book? Well, the age range is 0 to 90, right? This book is 20. Well, if you're alive, you betcha. But zero, meaning even if you're not born, this book is for you because we're counting on the adults in our lives to make the right financial decisions as we enter the world and start trying to figure things out.

Chris: And people can also look you up, Crazy Man in the Pink Wig, on YouTube and watch your videos and, and learn a ton as well there, right?

Mike

Finley: That's right. And then go to thegivingsolution.org, thegivingsolution.org. That's my nonprofit. If you need help, we help people with their finances at no cost.

Chris: And you've helped a lot of our clients You've personally helped me and my family. And I think it's interesting, I'll get phone calls from my clients, and they'll be like, how's this work? So he doesn't— we don't pay him? I don't understand how that works, you know. And so I think, you know, thank you to you, especially in the things that you've done to improve society and help people with their wealth. That's really a cool deal. And we all— that every— all of us, on behalf of all of us that you have helped, thank you. It means a lot.

Mike

Finley: Thank you, Chris.

Chris: So with that said, thank you very much. I appreciate it. And hopefully this was helpful to you guys. And what we'll do is we'll be back again with part 2 here in, what, a month maybe or something like that. After I read the book, I'll get it read and we'll, we'll get a Zoom put together or have you back and, and we'll, we'll get the other book out. With that said, check out 19 Minutes, um, and we'll also send you a book if you want to do that. And With that said, thanks a lot. We'll catch you again next time on the Eggview Pitch.