Mastering the Art of Money Management | Michael Kim

Michael Phelps, one of the most decorated Olympic athletes with 28 gold medals. Simu Liu, an actor from Toronto, Canada who became the first Asian Marvel superhero in Hollywood. And Mariah Carey, my favorite singer, the queen of Christmas and one of the greatest vocalists of our time. Now each of these extremely successful individuals all have something in common. They realize their unique strengths and talents and use them to bring their biggest dream into reality. But what makes you and I any different from them? The truth is you are just as amazing and talented as Mariah Carey. Okay well maybe not in singing of course because Mariah Carey is the best singer in the world. But in your own unique way all of you have so many unique strengths and talents and the only difference between you and all of these extremely successful individuals is that you just haven't found out what you're meant to do yet. In life our main goal is to become the best version of ourselves. To do something that complements our unique strengths and talents while making a positive impact in the world. But there's one thing that's preventing you from doing this and it's money. I was about eight years old when I saw my mom cry for the first time. I was at home playing the piano when I heard the kitchen phone ring. So I went over to the kitchen picked up the phone and on the other line was a man. Hello can I speak with your parent? Um sure. So I called over my mom and went back to playing the piano. Then within minutes from the corner of my eye I watched as my mom fall to her knee and break down into tears. It was as if time stopped and I felt a combination of fear and confusion in the pit of my. Why was my mom crying? Did someone die? What could have caused this type of reaction? I later found out that the man on the other line was a debt collector and when I gave the phone to my mom he said if you don't pay back the money that you used to buy your house I'm gonna drag you your husband and your two little kids from your only home. This event triggered a series of financial hardships throughout my childhood. From eating dinner alone because my to hearing my parents constantly fight about money. In this environment I was in a constant form of anxiety because if I wasn't financially independent yet and if I couldn't rely on my parents I believed I was going to die. And so even though as a kid I loved things like art and music I told myself I couldn't do these things anymore because these things were too risky not safe. At this time I also couldn't think about anyone else other than myself because if I couldn't even take care of myself then there is no way I would be able to take care of someone else and this is how I lived for most of my life. But then something changed. In 2019 I graduated from the Ivy Business School at Western University, started working in corporate finance and learned how to effectively manage my money. And because I didn't have to worry about money anymore I suddenly had so much more time and energy for other things. I started to pick up old hobbies and helping my parents with their finances. I even started teaching random people on the internet how they could better manage their money. This eventually led to the start of my personal finance coaching business where today I get to use my unique strengths and talents to help young professionals have control over their money and their lives. I'm telling you this story today because money isn't everything but what money does is that it gives you the power to take care of yourself and the freedom to do what truly lights you up. According to the behavioral theory Maslow's Our main goal in life as human beings is to achieve something called self-actualization. But before you can do this you first need to satisfy your lower level needs of food, safety and shelter. And it's only then when you're able to satisfy your higher level needs like love and belonging, esteem and self-actualization. And so when I was in university and for most of my life I was in survival mode which is why I couldn't even think about pursuing a fulfilling career or helping anyone else other than myself. But as soon as I learned that I was safe, that my basic human needs would be met, it gave me the time and space to ask myself this one question. If I didn't have to worry about money what would I do with my life? I want you to ask yourself this question. If you didn't have to worry about money what would you do with your life? Would you choose a career you've always wanted to do but you told yourself it was too risky and not safe? Would you pick up an old hobby you've always loved but you just never had time for it? Or would you maybe start a non-profit organization to help a cause you're really passionate about? You see money might not directly bring you happiness but the truth is you need money to satisfy your basic human needs. And when you don't have to worry about yourself anymore this is when you can allocate all of your time and energy to do something you are actually good and passionate about on your path to become the best version of yourself. But there is one problem. It isn't enough to just have money. You have to know how to effectively manage it. Money management is a skill and like any skill you have to learn and be taught how to do it. People who find themselves in financial problems like debt, living paycheck to paycheck, or unable to retire aren't in the situation because they're dumb or stupid. It's simply because they haven't developed the skill of managing their money. And so if you want to learn how to use money to satisfy your basic human needs you need to learn and master three main skills. When it comes to money you need to learn how to make it, save it, and invest it. Let's first talk about making money. What is money anyway? Well at the end of the day money is just a tool that we use to exchange something of equal value. Back in the day when money didn't exist we would barter. I'll trade my bag of rice for your pig. Money just made these transactions a lot more convenient. So the next time you want to buy a bag of rice you can use money instead of your pet pig Wilbur over here. And so if you want to learn how to make more money you need to learn how to provide more value to others. How do you provide more value? Well you develop skills that other people need. For example you could go back to school to learn how to code to build websites for businesses. Or you can improve your communication skills so that you can accurately market and sell yourself to both your future customers and employers. And so regardless whether you're in business, tech, or even in the art, develop your skills so that you can provide and communicate your value to others and you will be paid accordingly. The second skill you need to learn and master is how to save money. I believe in life one of our main goals is just to be happy but the thing is if you spend all of your money today on clothing, traveling, and luxury goods you might be happy today but you're not going to be happy in the future when you have to work until the day that you die because you can't afford to retire. And so if you want to learn to be happy in life you need to learn how to find a balance between spending money today and enjoying life today while saving money for your future so that you can enjoy your future. How do you do this? Well the best way to do this is by creating a financial plan. A financial plan is essentially like a GPS that tells you how to get from point A to point B where point A is your current financial situation and your point B are your financial goals. A financial plan is so powerful because it will literally tell you how much money to save and spend every single month and year so that you can achieve all of your financial goals. And so if you want to make your financial goals inevitable and you want to live a happy life then you need a financial plan. The third and last skill that you need to learn and master is how to invest your money. I'll be honest we're living in pretty difficult financial times right now. Inflation is at an all-time high, consumer debt is rising, and real estate prices are skyrocketing. And because of this it isn't enough to just save money under your mattress or in your bank account because your money is losing its buying power due to the effects of inflation. Inflation is the increase of prices every single year and according to Statistics Canada the average inflation rate for the past five years was about three percent. That means something that would have cost you ten thousand dollars today in 20 years it will cost you close to twenty thousand dollars which means the money that you left in your bank account or under your mattress has lost more than half of its original value. But in contrast let's say instead you were to invest your money at an annual rate of return of about eight percent in the U.S. stock market. Well in this case your ten thousand dollars would now And your money has more than quadrupled in value and this is why you need to be investing your money so that you can grow your wealth and maintain your buying power so that you can still afford to buy things in the future. And so once you learn how to make, save, and invest your money you can literally do anything. You can decide to quit your corporate job and go full-time in your online business to travel the world like I did. Or you can have the freedom to have a family, get married, and buy a beautiful home. I mean those things aren't cheap. And ultimately when I guarantee that you will become rich. Did he did he just say rich? Did some of you just cringe or just throw up internally? In our society we often believe that becoming rich is something only evil and greedy people do. But today I want to challenge you to think what if it's actually the opposite? A few years ago I met up with one of my best friends in a food court in downtown Toronto and we started talking about money. And as she started crying she said, Michael I just don't know what I did wrong. And this really broke my heart because the truth is she did nothing wrong. In fact she did everything right. She went to a top university, got multiple degrees, and even a job in her field of study. And yet she was still living paycheck to paycheck in a mountain of student debt and couldn't even afford to move out on her own. Clearly she is an intelligent individual. But the reason why she was in this financial situation was simply because she never learned how to effectively manage her money. And so when she learned how to make, save, and invest her money, within one year she was able to move into her own condo, double her income, and pay off more than half of her student loan. And the best part, because she didn't have to worry about herself anymore, she decided to start a non-profit organization to help underprivileged youth in her community have equal access to career opportunities. I'm telling you the story because becoming rich doesn't make you evil or greedy. Money is a microphone and it amplifies your voice. Money in the hands of someone bad is going to give them more time and energy to do bad things. But money in the hands of a good person like my best friend will give them more time and energy to do more good. And then it's a ripple effect because I was able to learn how to effectively take care of my own needs. I was able to help my friend who now helps others and so on and so on. And so if you're here today and if you know you are a good person, which you are, it is your responsibility to learn how to effectively manage your money to satisfy your basic human needs so that you can realize your unique strengths and talents and become the best version of yourself so that you can make a positive impact on others and in this world. Thank you.