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Episode Info: Hi everyone, Dan Thompson here. Thanks for joining us on another wise money tools video. In the last few videos, we've been talking about the 5 elements to wealth, and I hope you've gotten a real good sense of what all that really means. If you recall that first element is so important, it's where it all starts. It's extremely critical and that is pay yourself first. You know, this is such a simple concept, but it's so ignored today. It starts out oftentimes when kids get out of high school, first thing they do is they go to college, and they start piling up debt for school. They when they finally get a job, they go to work. They've got all this debt that they've got to pay off. And oftentimes, when they get that first job, the first thing they do is go out and get their first car. And then they rack up some credit cards because they just feel like oh, I'll always be able to pay off these credit cards. And then that can take a decade or more just killing them when it comes to, you know, paying off that debt. Even worse, it's ignoring element number 2, which is to start right now, and they can't start saving because what they're doing is they're taking all their money and trying to get out of debt. They delay compounding and that's huge. This magical formula or this eighth wonder of the world if you will, of compounding is so simple if you just get started right away but man, it just gets way out of line. You know, Dave Ramsey, I call them that debt King. Yeah, I listen to him quite a bit. It's always the same thing basically, you know, trim down, eat beans and rice, pay off your consumer debt. Then when those things are gone, you can finally start to save and invest. And then you work on your home mortgage, and finally be debt free. But to make matters worse, his favorite savings location is typically mutual funds or a 401k. If you have it, if not, then into an IRA. Luckily, at least I've heard him suggest to use a Roth, which is you know, it's a good start, but it's way too restrictive. What each of these investment choices have is this common theme of risk. And then we've got that next element, which is our plus sign. And this is the element that means we want to be moving forward. We don't want to lose money, we don't want to minus sign their. Losses setback are compounding opportunities, and it takes away the one thing we all run out of and that is time. You know, let me give you an example. There's been a few times in our history. If we go back to the crash of 29 and then through the 50s, and sometimes even through the 70s, you'll see plenty of examples where if you had $1,000 in, let's say 1929. It took 10, 15, 20 years just to be worth $1,000 again. That happened again in the 50s. That happened again in 2000. And so there's been several times in our, you know, investment life period. Where it just can take years, sometimes a decade or more, just to get back to where we were. That's what we call last time. If you remember the video on...
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