COPYRIGHTED MATERIAL
Reflecting on… You andYour Money
LET’S PRACTICE
Name: _____________________________________________________________________________
The Saga of Eloise and Franklin It’s all too common a story. Lots of people with astronomical salaries are flat broke as soon as they lose their job. Why? Because they did not use their earnings to build wealth. Let’s observe! Read the profiles below and answer the questions that follow.
Hi. I’m Eloise. I graduated from college about ten years ago. My degree is in fashion marketing. When I graduated, I dreamed of working for a big design house in New York City. I wasn’t able land my dream job, so I moved back home to live with my parents and save money. I got a sales job at an indie store in my hometown. In my free time, I wrote a blog advising young designers how to navigate the world of fashion marketing. I built a following and I started charging a fee for my services. Eventually I got clients and started my own business. I invested most of what I earned in my company, but also managed to invest about 10% in stocks. I’m proud to say that over the years, I’ve built a successful small business. I pay myself $60,000 a year and continue to invest 10% of my salary. Now I own over $50,000 in stocks. A year ago I married Gunnar. He’s a graphic artist with a degree in computer science. He works for a big video game company. He also makes $60,000 a year and has $50,000 in his employee retirement account. We’re excited because we just bought our first house! It cost $250,000. It has a basement apartment that we rent out to a local college student for $400 a month. Our home loan is $200,000. We also have car loans of about $20,000, but hardly any credit card debt. My business is valued at about $200,000. In 10 years, Gunnar and I want to take a year off work to travel around the world.
PRODUCT PREVIEW
Franklin here. I graduated from college about 10 years ago. My degree was in very high demand. I started working for this new tech company that offered me such a sweet deal: $100,000 a year in salary! With a high income like that, I figured I’d be rich enough to retire in about 20 years. It was so cool. The first thing I did was buy that sports car I’ve always wanted. I rented an apartment in an area that is a little expensive, but super hip. I like designer clothes, so I bought plenty of those. And vacations? First class all the way, baby! Right now I’ve got about $30,000 in credit card debt. Five years after I started my job, I was just 28 and making $125,000 a year! That’s when I said to myself “Franklin, it’s time to get serious about life and start building some wealth.” Anyway, I managed to save about $10,000 before my company merged with another tech company. A lot of employees, including me, were let go. Now I’m clipping coupons and counting change. I’ve run through my savings so I’ve moved back in with my mom. She earns barely $16,000 per year, so it’s a struggle for her to support us both. I’m job hunting, but so far — no luck.
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Chapter 1 | Getting Personal: You and Your Money
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