Explain? Simple.

Talents were sums of money. One was give one, one three and five. One did nothing, the other two did something with their money. Putting your money into a mutual fund is not productive, it’s giving it over to someone else. Don’t mistake this for production. Diversity? That’s language for “this is somewhat risky, so we will diversify your money so you can’t lose it all at once.” You’re basically regurgitating the BS marketing you hear from billion dollar investment companies. Did you ever stop to ask yourself if you could keep stewarship over your money and find a way to do better than some supid mutual fund?

It reminds me of the parable of the talents because you basically bury it in the sense that you just put it away in some hole for 40 years (mutual funds) and hope that the market does well. When you diversify, you just put it it different holes in the ground to up your chances. Hmmm, up your chances sounds like gambling to me.

This year, I stopped giving my money to some guy (IRA) who just turns it over to a billion dollar investment company and started investing in me first (my mind and my own knowledge) and started putting my money in places I knew were good. My IRA did about 15 percent (which is mutual funds). The results of me keeping stewardship over my money turned into about a 40 percent return.

I just wanted to comment that many adults don’t have the money management skills and kowledge to even begin to teach their kids in the first place. I come from a family that was “just getting by” and even had to go to our Church for financial assistance at times. I definitely didn’t learn anything about money management from them. I just heard “get a good education and then you will get a great job that pays well and you won’t have to live like me.” That doesn’t really cut it…..

If children aren’t learning money skills in the home or at school—it’s a good indicator that many adults don’t have the understanding to teach them. While it’s good to teach our children, we must also make sure that adults have the same education.

I am currently reading The Richest Man in Babylon. I love it! I am also reading Rich Dad Poor Dad. These books have changed my perspective. I am no longer a “victim” to my circumstances I understand that I have the power to change them and to achieve financial freedom. I really do belive that this is possible. Before I could actually believe this, I had to do a mind make-over and realize by educating myself and putting that education in practice, I can control my financial destiny to a greater degree than I thought possible.

Now that I have that desire and belief that I can do it I am just beginning my journey to gain financial education. That gets me a little discouraged to think that I am 25 and just now “getting it” but then I step back and look at my father who is 57 and still doesn’t “get it”.

Any suggestions on helping me begin my financial education journey?

(Ok, disclaimer… I followed a link from a friend’s blog to get here, and don’t know anybody here from Adam… and the reverse is true, I’m sure.)

- Term insurance: I’d like to see one example where a “whole life” policy makes more financial sense to a person making an income in the 90th percentile of Americans with a family to support. The whole point of term insurance isn’t to have insurance until the day you die when you’re 90… the point of term insurance is to have a “safety blanket” during the 20-30 years you’re building up the wealth you need to really provide for your heirs in your will. If you take the just the money you save on term insurance premiums over whole life and invest that difference wisely in mutual funds over the course of 30-40 years, you’d have enough to never need an insurance policy again.

Whole life has a horrible return on investment over 50-60 years compared to virtually any other option… as I said, life insurance gives you the safety blanket you need to build real wealth through method that over real returns on investment.

- The whole point of a 401(k) plan is to save for retirement. Of course you can’t access it now without severe penalties… the money’s not meant for now! The money’s meant for your retirement. It’s also true that with many 401(k) plans, you have to stay in a job for a certain amount of time to be “fully vested” and be able to keep all the employer contributions. Even if you leave before that time, however, you still keep all of your own contributions. It’s not as though your own money is being kept from you during the vesting period. The employer match is simply free money… it’s a silly and unwise decision not to take advantage of it.

Now, if you want to quibble about what “maximum” means… I don’t think that was the point of the advice. General conventional wisdom says that you should be saving 15% of your net income in retirement accounts… be in 401k, Roth, or whatever. When I think “maximum,” that’s what I’m thinking. Obviously, it would be stupid to put the absolute maximum amount allowed by law into a 401(k) if you’re planning to use it as a savings account. I don’t think that was the intention of the writer, either.

- If I knew… for a fact… that a 1929 stock market crash was coming at some point in the next 10-20 years, I’d still invest in a good, diversified set of mutual funds. From 1926 to 1996, which includes the crash, Great Depression, and the lean Nixon and Carter years, the average return of the average stock (not even the “good choices” or any good funds) was 10.89%. And if a crash did happen, there’s your chance to invest more when the market is down… because even after the worst crashes in history, the market still rose to record levels afterwards. Fearing a crash like 1929 shows a willingness to worry more about results “today and tomorrow” instead of 30+ years down the road. (And if your horizon isn’t long-term, then you shouldn’t be stock-heavy anyway… and that’s not what the author was talking about.)

- “This reminds me of the slothful servant in the parable of the talents.” Excuse me? You’re going to have to explain to me how an average yearly return of almost 11% is beign slothful and “burying your talent in the ground.” Slamming all the money you can into wise, diversified investments like mutual funds with long track records of success is one of the most productive things people can do to provide for their future, and a future for their children and their children’s children.