Invest 30 percent or more of your income. A lot of the experts say to invest at least 10 percent of your income. I think that’s a good place to start, but 30 percent will put you on track for early financial freedom. If people started this at a young age, I don’t think they’d miss the money as much than if they started the 30 percent later in life. I’ve got two daughters under the age of 5. It sounds funny but I’m already starting to teach the oldest to invest 30 percent of the money from her piggy bank. So far she’s been happy with the toys she’s been able to buy with the remainder of her money!
As a part of my series about the The 5 Essentials of Smart Investing, I had the pleasure of interviewing Aaron Nannini.
Aaron Nannini is the founder of CashUncomplicated.com. After struggling with money as a young adult, he achieved financial success through principles such as life goals, daily habits, and intentional money decisions. Using a value-based spending mindset, he went from a net worth of less than three thousand dollars to complete financial clarity and harmony — all in less than five years. He believes that anyone can achieve financial freedom without sacrificing their lifestyle or happiness. Visit cashuncomplicated.com for more.
Thank you for doing this with us! Our readers would like to learn a bit more about you. Can you tell us the “backstory” about what brought you to the finance industry?
Thank you for having me! I struggled with personal finance for a long time. Even in my mid- twenties and early thirties, I was still living paycheck to paycheck. My mindset about personal finance was all backwards. I mistakenly believed that because I was in the education field, I wasn’t supposed to be good with money, or have any type of savings or investments. It wasn’t until my mid-thirties that I realized I was wrong.
A person’s relationship with money is more about mindset than anything. I realized that you could have control of your money situation no matter what type of work you’re in, or where you come from. I was making excuses for my lack of financial success and once I took the time to educate myself, I started to gain control of my personal finances. I got into this field so that I could help others with the same struggles.
Can you share with our readers the most interesting or amusing story that occurred to you in your career so far? Can you share the lesson or take away you took out of that story?
It would have to be my experience in law school. Long story short, I basically failed out of law school. My plan was to be an attorney and that all went away very quickly. At the time I considered it a massive failure and an embarrassment.
It was hard to get back up on my feet the first several months after that. Once I did though, I took some great lessons out of it. Mark Twain wrote, “Twenty years from now you will be more disappointed by the things you didn’t do than by the ones you did do.” That quote perfectly articulates my biggest lesson from that experience — I know I would have regretted not trying law school at all, but I really don’t have any regrets about trying and failing.
That lesson has helped me many times in my life. There are things I have tried and succeeded in, like writing a book and starting a website that I know I wouldn’t have tried without that experience of failure. That “failure” actually turned out to be a huge blessing. I can honestly say I wouldn’t trade that experience for anything, and am thankful for the lessons.
Are you working on any exciting new projects now? How do you think that will help people?
My first book, Cash Uncomplicated, will be released on February 16th. It took about two years to write and edit, and I am really happy with the final product. I think it’s going to help a lot of people. The focus of the book is on financial mindset, which is one of the most important aspects of personal finance. Once you get your mindset right, the sky is the limit, whether that’s in your personal finances or any area of life. I think people will find the concepts easy to understand, impactful, and life changing.
Ok. Thanks for all that. Let’s now jump to the main core of our interview. According to this report in Fortune, nearly two-thirds of Americans can’t pass a basic test of financial literacy. In your opinion or experience what is the cause of these unfortunate numbers?
Money has been a taboo subject for years. As a consequence, money is all too often ignored and feared. In order to be good at anything in life, whether it’s money or something else, you have to talk about it, exchange ideas, and put concepts into practice. When we don’t talk about money as a culture, we miss the opportunity for an exchange of ideas and growth in the subject. Then we go out and repeatedly make mistakes, but don’t learn from them because nobody wants to talk about it or address it. There is a huge gap in financial education for this reason.
If you had the power to make a change, what 3 things would you recommend to improve these numbers?
Interviews like this are great because you and I do hold a little bit of power to make change. The more we exchange ideas like we are now, the more educated we as a society can become about personal finances. The three things I would recommend are:
- Make financial literacy a mandatory class to graduate high school. We’re putting young people out in society with little to no financial education and expecting them to make smart financial decisions. Then they get into debt and financial trouble, and everyone asks how this could happen.
- Help people change their mindset about money and personal finance. I would like for everyone to have a growth mindset about money. Know that you will make mistakes, but you will grow from them, get better, and share your knowledge with others. The ultimate result will be a society with a much higher financial intelligence.
- Make value-based spending the norm, rather than the exception. Too often we purchase things because we’re trying to impress others, or because we think it’s what we’re supposed to do. Value-based spending is when we assess what we truly value, and align our spending with those values. Value-based spending cuts down on a lot of the wasteful spending and debt so many people get themselves into.
Ok, thank you! Now to the main question of our interview: You are a “finance insider”. If you had to advise your adult child about 5 non intuitive essentials for smart investing what would you say? Can you please give a story or an example for each.
- Invest in self-education in addition to formal education. Far too many of us, myself included for several years, graduate from college and never pick up a book again. That runs counter to a growth mindset and prevents people from advancing in life. A lot of growth, not just financial growth, results from self-education. Self-education comes in many forms. It can come from books, podcasts, blogs, and good old-fashioned experience. When I think of self-education, I always think of the Jim Rohn quote: “Formal education will make you a living: self-education will make you a fortune.”
- Invest 30 percent or more of your income. A lot of the experts say to invest at least 10 percent of your income. I think that’s a good place to start, but 30 percent will put you on track for early financial freedom. If people started this at a young age, I don’t think they’d miss the money as much than if they started the 30 percent later in life. I’ve got two daughters under the age of 5. It sounds funny but I’m already starting to teach the oldest to invest 30 percent of the money from her piggy bank. So far she’s been happy with the toys she’s been able to buy with the remainder of her money!
- Put yourself in a position as quickly as possible where money doesn’t factor into a life or career decision. Especially as we start a family, purchase more expensive cars, and buy a home, we get into situations where money factors into almost every life decision. People stay in jobs they don’t like because they can’t afford to leave. Or are afraid to stand up for what’s right because they’re worried about being let go. Others are hesitant to take a risk out of fear of financial consequences.
The more financial freedom we have, the more ability we have to make life decisions based on our values, not on whether we’ll be able to make it work financially next month. Of course this isn’t going to happen immediately, but it’s a worthy financial goal to work towards.
- Be a value-based spender. This naturally weeds out the unimportant items and prioritizes the important things. If you really want a nice camera, purse, or set of golf clubs, buy it. Just make sure you’re buying it because you really want it, not because you’re trying to impress someone or think you have to buy it to fit in.
- Learn one or two investment strategies and invest heavily in those areas. It’s really easy to be enamored with the next shiny object, and have your investments all over the map. First it’s a blue chip stock, then it’s on to crypto, followed by a company your friend’s brother’s uncle started. And on and on. You have to give yourself a chance to get good at investing in a particular area by spending some time studying it. Even if it’s just index funds, at least you’re spending some time learning about them and making a commitment. For me, I focus on real estate because it’s what I know and I like the concept of responsible leverage.
None of us are able to achieve success without some help along the way. Is there a particular person who you are grateful towards who helped get you to where you are? Can you share a story about that?
Without a doubt, both of my parents. They both worked hard and provided for our family; I always had everything I needed growing up. They were always there to support me and there’s no way I’d be where I am today without them. They were remarkably consistent in providing me with what I needed. I don’t think either one of them missed more than a couple of soccer or baseball games or anything else I was involved in.
A funny story: When I played youth soccer, I was always one of the fastest kids on the field. I think my mom was a little faster though. During the games in the winter, she would wear this big coat on the sidelines and run wherever the ball was, all up and down the sidelines. I think she’d run 10 miles a game just following the ball and cheering me on. She’s one of a kind.
Can you please give us your favorite “Life Lesson Quote”? Can you share how that was relevant to you in your life?
The quote from Mark Twain I shared earlier about regret is very powerful, but my number one quote is from Henry David Thoreau. “Go confidently in the direction of your dreams, live the life you’ve imagined.” So simple, yet so poignant. The second part of the quote especially has always resonated with me. “Live the life you’ve imagined” is saying your life is a miracle and you’ve got one shot, give it all you have. I think about that quote often.
You are a person of great influence. If you could inspire a movement that would bring the most amount of good to the greatest amount of people, what would that be? You never know what your idea can trigger. 🙂
Just go back to the basics and treat people with kindness and understanding. I think that all often we rush to judgment and don’t give each other the benefit of the doubt. If everyone made an effort to be just a little more kind and understanding, we’d find that our relationships would be better and we’d be happier.
Thank you for the interview. We wish you continued success! Thank you, I appreciate the opportunity!