The Minimum Wage Millionaire is a must read for teenagers and parents of teenagers who want to learn about how money works. The book presents a practical approach to accumulating wealth for teenagers who are just starting to earn income with a part time job. Using simple analogies to unravel complex financial concepts allows the young mind to grasp why it is important to invest early and how to start with their first paycheck. Following a simple plan for only six years, they will have a small nest egg that will grow into about one million tax free dollars by the age of 65.
Chapter One
Why Write a Book on Money for Teenagers?
When it comes to building wealth, the most powerful force you have on your side is time. As the days and years pass, the opportunity to build wealth by leveraging time slowly dwindles. The idea for this book came from the realization that often times kids start working their first job at sixteen, likely just a minimum wage, or near-minimum wage, job, but they haven’t been taught how to accumulate wealth. I wasn’t.
In high school, I had some basic accounting, and I learned how to balance a checkbook. We did some stock market games to learn a little about investing, but no class I took ever laid out a plan for success in a capitalist society. No class I took talked about the “Rule of 72,” or compounding return on investment over time, or tax advantaged investment accounts.
But all of those things I just mentioned are critical to understand in a free market capitalist society. They are critical to understand from the moment that you earn your first dollar. It doesn’t matter how wealthy or poor your parents are, it doesn’t matter what background you have, all teenagers in the United States, after reading this book, can set themselves on a path to build a staggering amount of tax-free cash. With just a little bit of knowledge about how money works, and the discipline to follow through, you can be in control of your financial destiny.
I’m embarrassed to admit that I have not taken advantage of the time I’ve had to accumulate wealth. Worse than that, I realize that as the years have passed and other financial obligations of adulthood have grown, setting aside extra money becomes more and more elusive. I have to acknowledge some hard facts about my own bad money habits—bad habits that stopped me from building wealth. I have to reflect on wasted opportunities and bad decisions. Finally, I have to draw some tough conclusions about the consequences of not saving and investing.
But it doesn’t have to be that way for you. After reading this book, you will have both knowledge and youth on your side. You will have an action plan on how to start accumulating wealth now. And the possibilities before you will be endless. But let’s talk about where bad money habits start.
Why?
Because I’ve sucked at money. I mean, if blowing a paycheck were a sport, I’d be Muhammad Ali—the greatest of all time. As a kid, I didn’t know any better, but it starts a pattern.
When I got my first job as a paperboy at 12 years old, I immediately took the money from my first paycheck down to the Ben Franklin, a few blocks from my house, and bought a bottle of Coke and tons of baseball cards. On the way home, I stopped at Mickey’s for a Chicago-style hot dog with all the fixings and some fries. By the end of the week, all the money I’d made was gone. Back then, it wasn’t much, but today—if I’d just invested part of that somehow—I’d have enough to buy a small island in the Bahamas. I was too young to know it, but that was my first big missed opportunity.
If that’s not painful enough to look back on, I’m sad to say it didn’t stop there. When I started my first real job in high school (bagging groceries), after work, the arcade ate quarter after quarter. And then there were movies (I thought everyone went to see Raiders of the Lost Ark 20 times!), gas for the car, games for Atari, and the occasional burger, french fries, and Coke. It all added up.
Paycheck after paycheck was burning a hole in my pocket. I wasn’t saving or investing anything, but at least I had to stop when there was no money left. Credit cards would later solve that problem. After college, I moved to California, bought a new car, new furniture, new wardrobe, and lots of new grown-up toys. I started getting my hair cut at a trendy salon with a French name, moved into an apartment in the “hip” part of town with a pool table and a pop-a-shot.
You know what’s truly sad? It took me a LONG time to learn from my mistakes. As I got older, people warned me to start saving. I can remember my dad getting near retirement age and shaking his finger in my face at the dinner table on Thanksgiving, saying “You’d better invest your money for retirement, or you’re gonna end up working until you die!” but I ignored him. The years rushed by, and then, with my net worth still bobbing near zero, my wife and I got pregnant with our first baby.
As I sat in the hospital in Chicago—never again. I must change. I must be a good example. I can’t let them suffer the same mistakes I made. I started saving like crazy in my company retirement plan. And that lasted for a few years, but the economy changed, and I was not prepared. I was unemployed for a while—longer than I ever imagined. The mortgage, the bills, it consumed far more than the unemployment check.
I began working a part-time job for minimum wage at the local big box store, but unlike my teenage years, the meager paychecks didn’t help much with all the bills. As the Great Recession continued, I eventually cashed out the retirement money, penalties and all, so I could keep paying the mortgage. It still wasn’t enough. In the end, I lost it all, the house, the savings, and Best Buy even stopped by to get their TV back. I was sick to my stomach.
Listen. I honestly wasted all my opportunities to build wealth and have the choices, the options, to retire rich, so that I don’t have to work until I die, so that I can spend my time with my family. Now, knowing how easy it is to get there if you start early and seeing the principles in this book work for so many people, I’m ashamed of my past actions. But you don’t have to have my same regrets.
So how does a guy who lost everything know so much about creating wealth? That’s a valid question, and I’m glad you asked. Learn from your mistakes. As you grow up, you’ll likely hear that over and over from your parents, teachers, and coaches. It’s what I’ve had to do myself. Learn from my mistakes. So the rest of this book is about what I’ve learned.
In life, there are no do-overs. I can’t go back and make things better for me. But for every teenager out there, hope springs eternal. If this book can make an impact on just one kid (besides my three beautiful daughters), I’ve accomplished more than I could possibly imagine. I’ve created this book is to help you understand what an amazing opportunity you have right now. Time is on your side, and every day that goes by, you lose a little bit of your opportunity. Don’t make that mistake. Don’t make my mistake. In the following chapters, I will lay out for you exactly what you need to do to build wealth.
I warn you, it won’t come quickly, and it won’t be easy all the time. In fact, there will be moments in your life when you question whether or not what I’ve told you is true. You’ll want to go back to your old ways and you’ll have pressure from friends to spend, spend, spend!
When in doubt, just remember, the tools you’re using are the same principles that thousands of people have used time after time to become the wealthiest people in the world. You’re in good company.
My great hope is that you’ll realize just how incredible an impact a little bit of savings and planning will have on your life. If you can just avoid my mistakes and save smart, you can really, truly become a minimum-wage millionaire.
Bill Edgar is the author of The Minimum Wage Millionaire: How a Part Time After School Job Can Change Your Financial Life. He is passionate about helping youth understand how to become wealthy. He lives in Elburn, Illinois, with his three nearly teenage daughters (who will all be required to read his book). Connect with Bill on Goodreads (https://www.goodreads.com/author/show/696268.Bill_Edgar) and Twitter (https://twitter.com/AuthorBillEdgar).
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