Tag Archives: grads and finances

My Grad Commencement Address: About Marshmallows


If I were doing a commencement address at some graduation this month, it’d be about marshmallows.

That was a Stanford experiment in the late ’60s, that’s been proven to be incredibly accurate, and replicated right up to a few years ago. Researchers gave four to six year olds a marshmallow, pretzel, cookie, or some treat the kids really wanted. They then told the kids they could eat it whenever they wanted. But if they waited 15 minutes, they would get another one to double their treat.

It turns out that this delayed gratification was a powerful and accurate indicator of their marks, their education level, their weight, and their financial success as adults.

Maybe the marshmallow test for graduate age people is 15 days before making impulse decisions. Maybe it’s leaving the credit card at home during the week. Maybe it’s the most powerful financial tool of paying yourself first in savings before spending, or maybe it’s too late, and they’re doomed anyway.

Broke is the new rich. That was the T-shirt a 20-something guy wore at a festival. His age is certainly right in that thinking – even though it’s so wrong and so self-destructive. The millennial generation age 18 to 35 can be forgiven for wondering if they’re ever going to get any financial traction. There are over 85 million of them in North America who, on average have less than $1,000 saved.

There’s a great quote from Shaquille O’Neal: “It is not about how much money you make. The question is are you educated enough to KEEP IT?”

You may think that the average 20 something can’t get ahead. Yes you can! Get your debt under control, or have the delayed gratification to not get into debt in the first place. Start with your first paycheque, or starting this week, have two percent taken right out of your account and transferred into investments. There’s no chance you’ll miss that $60 or so. Then, every six months, up it by one percent. Again, you’ll never miss $20 or $30 until you’re saving 10 percent. Every hundred bucks saved is nearly $9,000 when you retire.

But that’s a BIG marshmallow test that only one or two people from a grad class will embrace. If you’re one of those few people, or want to be, read four short chapters in the Money Tools book and you can get really pretty quickly and easily. If not, remember me as you’ll want to email me in a decade when you’re broke and need help.

The mark you get on your lifetime financial learning isn’t an A to an F. It’s measured in your investment account balance and your debt, and you get a new mark every month for the rest of your life. It might be a mark of minus 30,000 in debt, or a mark of plus $45,000 in investments…

Three Grad-Year Resolutions That’ll Last a Lifetime

Happy Wednesday, especially to all grads, whether it’s high school or University. On a personal note, that includes my stepsister Brigitte McKenzie in Victoria, now Pastor Brigitte, who just graduated as a Minister in the Evangelical Lutheran Church this week. I’m so incredibly proud of her!

Her aside, for the 18 to 25 year old grads, it’s unlikely you’ll believe me or your parents. But one day – years from now – hopefully you’ll remember these three resolutions or heads-up before it’s too late:

Go vote in every election: Every level of government politicians make financial decisions for you that YOU have to pay for over many decades. You are the most impacted by their spending (or not spending) priorities. But your 18-24 age group won’t invest the half hour: Less than 38% of you vote. Compare that to the over 65 age group where 75% vote. Easy math: Which group gets their way? Which groups gets the most benefits? But also which group will pay the most and the longest?

Keep using your debit card: If you’re 18 or so, you always have because you couldn’t get a credit card. If you’re graduating from University, you’ve probably been using one for most of your purchases. Keep it up. It’s the best way to stay out of 20% credit card debt. Stats say you’ll change over to credit cards by your early 30s. It’s the powerful credit card marketing making you think you’re getting a lot of free points or perks. Maybe you will…but it’ll cost you 10 to 50 times what you’re getting through the fees and interest.

Fight the attempts of retailers to make you stupid: For a few years now, almost every advertised payment is weekly or bi-weekly – for expensive vehicles, I’ve also heard payments per day. It’s just stupid and designed to make the payment for whatever it is sound so tiny you’ll want to buy it and finance it.

In Red Deer, off gasoline alley, a large new apartment building has a huge poster on the front: Rent for $295 per week. The stupidity continues. Who rents an apartment for a week? That’s called a hotel! But the dummy-down marketing continues to expand. Better something stupid like $295 a week than the reality of actually paying $1300 a month.

Stop and think: Pull your phone calculator out and multiply it by 52 weeks and divide by 12 to get the real payment!