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How could learning basic financial literacy help set people free? In this episode of the Inner Edison Podcast, we speak to Rory Douglas, who has made it his mission to improve lower and middle-class Americans’ lives by spreading financial knowledge.
Rory was diagnosed with Dyslexia in school. After being labeled a disruptive influence, it would have been easy for his life to head in the wrong direction. However, he overcame his disability to become the author of the best-selling book, Cracking The Money Code. Combined with his coaching courses, Rory uses the knowledge he has gained through years of working in the corporate world to help people transform their lives by increasing their financial literacy.
Debt is a way of life.
The average American is just one or two paychecks away from being homeless. Handling a $400 emergency is beyond their reach. One in three Americans carries credit card debt.
Schools and colleges don’t teach financial literacy. People end up passing debt down through the generations. Rory’s passion is to provide people with the knowledge they need to overcome these issues. He believes there’s greatness inside everyone, and it’s his mission to help them find it and bring it out.
Find your why.
The average millionaire today has about six streams of income. The average American today has two jobs. Rory has the 40 / 40 /40 principal. Most people work for 40 years, doing 40 hours a week, and try to retire on 40% of the income. Most end up going back to work. That’s why Rory is so strong in encouraging people to become entrepreneurs. It is not about chasing money. Doing anything just for money is a fast track to misery. It’s about finding purpose in your life. You need to find out why you are here, what you were born to do, and then go and do it. Spending time with yourself and getting a mentor can be invaluable in discovering your passion.
First, you may need to go from being a nine to fiver to being a six to niner. You’ll still need to be working nine to five while you start your own business until it’s ready to become your nine to five. Rory explains this is where financial literacy is so valuable. It’s not about being rich; it’s about using the rich’s knowledge to give ordinary people the power to set their lives up and prosper.
The power of compound interest
One of the key elements of basic financial knowledge is how compound interest works. You can use this power for your good, or it can work against you.
You can use the rule of 72 to calculate how long it takes to double your money. For example, a rate of four percent, divided into 72, gives a result of about 18 years to double your money.
Banks in America right now pay minus one percent, while inflation is about four and a half percent. To get ahead, you need to earn at least five percent. Most people don’t look beyond banks. Rory likes to offer knowledge in various insurance products, how you can use these and the rule of 72 to your advantage. Because when it works against you, and you’re paying eighteen percent on a credit card bill, you’re doubling your debt every four years.
Financial education is the answer.
Rory Douglas believes that the current state of financial literacy in America is a travesty. Millennials have virtually no savings, and we have created a situation where debt moves from one generation to the next.
He is working to spread knowledge and financial literacy to allow everyday people to get out of this cycle. His goal is to have wealth moving through families rather than debt.
For more of our chat with Rory, check out the Inner Edison Podcast. You will also find other great stories on the podcast.