Financial Security 101

In the most recent episode of the 'Irreplaceable Dental Assistant' podcast, our guest was the fantastic George Sago, a seasoned professional with over 15 years of experience in the banking industry.

Currently, George is a mortgage originator, where he aids people in securing mortgages for their dream homes. In addition to that, he is also a community mortgage originator with a passion for educating his community about credit and budgeting.

Taking Control of Your Money

Understanding your finances is integral to a better quality of life, no matter the amount of money you're earning.

One of the fundamental concepts of money management, according to George, is that you should always be in control of your money, not the other way around. It means that you should decide where your money is spent and how much, not just allow it to disappear without any idea of where it's going.

Harnessing the Power of Budgeting & Compound Interest

The key to understanding money management is understanding budgeting.

The budget is the road map that tells your money where to go.

Without a well-structured budget, it would be challenging to utilize concepts like compound interest effectively. The concept of compound interest is pretty straightforward - it's simply earning interest on your principal and the accumulated interest. The more you save and the more regularly you add to your savings, the faster you can take advantage of compound interest and grow your wealth.

Achieving Financial Stability

For individuals with an income of around $45,000 per year, George gave some simple advice to achieve financial stability. First, it is crucial to create a budget and stick to it. He suggested using tools like Mint, a free tool that helps you create budgets and set financial goals. After creating a budget, the next step is to eliminate bad debt. Being debt-free can significantly improve your financial stability. The final step is to find additional sources of income. This could mean finding a side gig or investing in rental property to generate passive income.

However, while giving this advice, George also warned against overspending or living beyond your means. Spending more than what you earn is the quickest way to find yourself in financial trouble.

Avoid making impulsive decisions and buying things you don't really need or can't afford. A perfect example of this is charging purchases on your credit card that you can't afford to pay off immediately. This is compound interest working against you, leading you to pay more in the long run.

The Importance of Financial Education

In a world where financial literacy is often neglected in education, and credit cards are handed out like candy on university campuses, managing personal finances can feel like a daunting task.

The lack of financial education often leaves individuals vulnerable, particularly when enticing credit card offers are thrust upon young, inexperienced university students. The allure of "easy street" quickly becomes a road filled with the potholes of debt after graduation.

Sago reminisced about his own college experience, recalling how he was enticed to sign up for multiple credit cards with the bait of pizza and T-shirts. Like many, he had no financial education at home and, therefore, no understanding of how to manage money responsibly. This led to spending that spiraled out of control and put him on a difficult path toward financial responsibility.

Starting small is key.

Sago recommended a free budgeting tool called Mint to help manage personal finances and set savings goals. He also mentioned that many banks now offer similar tools, encouraging individuals to explore all the resources available to them.

But tools and resources alone won't lead to financial freedom. Discipline is equally essential, as Sago emphasized. He quoted entrepreneur Jim Rohn as saying, "Discipline is the bridge between goals and accomplishment." Making financial goals is only the first step; it's the discipline to stick to those goals that leads to genuine financial progress.

Income Isn't Everything

The conversation wrapped up with a shared understanding that income is not the determining factor of wealth. No matter how much you earn, if you lack financial management skills, you'll never feel you have enough. 

Start where you are. Regardless of your current earnings or financial situation, you can take steps today to improve your financial literacy and management.

It begins with a change in your way of thinking.

And remember, it's not about the destination, but the journey to financial freedom that matters most.

Conclusion: Building a Strong Foundation for Financial Freedom

The road to financial stability can be a challenging one, but with the right understanding of money management and some self-discipline, it is certainly achievable. It all starts with a budget, knowing where every penny goes, and making sure you live within your means.

By following these principles, you are setting a strong foundation for your financial future. 

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This is Episode 27 of my Irreplaceable Dental Assistant podcast.

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