Teaching a Debt Perspective to 12-Year-Olds

A presentation given to a youth group on January 29th, 2014

Joe Mihalic

nomoreharvarddebt.com

Today, you’re going to learn about a perspective on life that people hardly

ever talk about.

It’s sort of a secret.

But if you adopt this new perspective, it could change your life.

Fact: Success is important in our society.

We automatically consider somebody successful if they have a lot of cool

stuff.

Success = cool stuff

Which twin do we automatically consider successful?

Bob Ted

We think people will be automatically happy if they have a lot of cool stuff.

Cool stuff = Happiness

Successful people have cool stuff.

Cool stuff makes people happy.

Success Cool stuff Happiness

Question: I’m not successful yet and I want to be happy, but I don’t have the

money to pay for cool stuff.

What should I do?

Answer: Borrow money to buy cool stuff.

Answer: It’s easier than you think. Turn 18. Get a job. Get a credit card, get an auto loan, get student loans,

get a payday loan, etc.

Question: How do I borrow money?

Did society automatically consider me successful?

Owed the bank: $90,000

Who is actually successful? Money in the bank: $500,000

Owes the bank: $0

Money in the bank: $5,000

Owes the bank: $1,000,000

How do you define “success”?

Narrow definition: Make lots of money. Buy a lot of cool stuff.

My definition: Have an impact. Contribute to society in a positive way. Make a positive difference.

Who is actually happy? Money in the bank: $500,000

Owes the bank: $0

Money in the bank: $5,000

Owes the bank: $1,000,000

How do you define “happiness”?

• Moment-by-moment • Long-term

Is happiness something that happens to us?

Or do we create our own happiness?

Owed the bank: $90,000

Did any of this cool stuff actually make me a happier person?

Money doesn’t buy happiness. And going into debt trying to buy cool

stuff will make you absolutely miserable.

Debt is a prison sentence.

So how did I get out of prison?

I stopped trying appear successful and own cool stuff to be happy.

• Sold my car • Sold my motorcycle • Shared my house (got roommates) • Zeroed out my savings so I couldn’t buy more stuff I didn’t need • Stopped spending my income on things I didn’t need and put it

all towards by debt

And I just decided to be happy.

Level 1 Perspective

Level 2 Perspective

Level 3 Perspective

Success Hard Work Cool stuff Happiness

Level 4 Perspective

Success Hard Work Cool stuff Happiness

Positive mindset

Happiness

Level 5 Perspective

“New” Success Hard Work Cool stuff Happiness

Normal stuff

The 5 Rules of a Level 5 Perspective 1. Love yourself. Don’t measure your self-worth based on what you own. 2. Create your own happiness. Don’t expect stuff to make you happy. 3. Say no to IOUs. Live within your means. Don’t borrow money to buy cool stuff. 4. Be free. Save money for an emergency fund and retirement. 5. Have an impact. Define success on your own terms.

Positive mindset

Happiness

• President of Uruguay since 2010 • Donates $130k of his $145k annual salary to charities

that benefit poor people • Lives on $15k a year • Nixed presidential mansion with its staff of 42 and lives

in a small house he has owned for years

Level 5 Leader

Jose Mujica

Does anybody else think like this?

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