Albert Einstein and personal finance – the two are rarely used in the same sentence. But the man behind the theory of relativity said one of the most basic yet essential quotes when it comes to money – “Compound interest is the 8^th wonder of the world. He who understands it, earns it; he who doesn’t, pays it.” Well, it isn’t really clear if Albert Einstein actually said it but compounding interest is really a cool thing.

Compound interest is interest added on interest. A 10% yearly interest on Php 100 is not Php 10 every year. This is because of compound interest. In the second year, the Php 100 grows to Php 110 and 10% of that is Php 11. When it comes to finances, the earlier you start saving and investing, the higher the potential of compound interest because of the longer timeline. This means younger folks have, if they start saving and investing early, the upper hand when it comes to finances. This is where parents come in.

Personal finance, even just the basics, should be taught to kids and teenagers. To make this more fun, you can give bonuses and incentives from time to time, such as doubling the amount of money your kids save in X months or giving your teenagers a stock market challenge where the one with the most profits earns a prize.

Aside from compound interest, what are other money principles kids should learn? Look no further. MoneyMax.ph, a Philippine comparison portal for financial products such as loans and credit cards, created an infographic on 10 money principles kids should learn:

From creating proper money habits to practicing both saving and earning, the 10 principles above are sure to give your children a head-start when it comes to their finances. The earlier your kids start, the more time they have to learn, practice, and live the above-mentioned lessons for a healthier financial life for both them and you, as their parents.

To share what we do, my wife and I have been teaching our kids 3 basic money principles whenever they get some money: SAVE, SPEND, GIVE — principles that are truly important life skills for them to have.

Let us teach our children be wise, to love others and most importantly to love God and they will be set for life.

Train up a child in the way he should go; even when he is old he will not depart from it. (Proverbs 22:6, ESV)

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I have said it time and time again and without shame that Dave Ramsey is my role model and benchmark when it comes to my finance advocacy

What makes Dave Ramsey really good is his straight-to-the point and no-nonsense approach with personal finance. Here’s a great video on why we should start looking at money differently and go against what the world has been teaching us. It’s time to go against the normal!

Like Dave, I believe the bible holds the answers to our many financial questions… as well as all the other questions we have in life.

A lot of people ask me why they are not earning as much as they should and they feel demotivated when they compare their income with others. In my talks and seminars, I encounter a lot of people who will confess to me that they can’t save simply because what they earn is just enough for their needs. While many of  us can’t save is because they spend more than they should, a big number of us is simply not earning enough.

In my book the No Nonsense Personal Finance: A Step by Step Guide, my first step was about improving cash flow by applying two things — Earn more money, Spend less money. A lot has been said about spending less money but we must also give the same emphasis on earning more money. The best way to earn more money? Invest in yourself and make yourself excellent in what you do.

Excellence in work is a guarantee for you to earn more wether you are an employee or you are in business. Income is a result of value and as your value increases, your income will ultimately follow.I know some of us feel that we are doing our best but the question is are we doing things excellently? Promotions, opportunities and profit will be a by-product of work done in excellence. If you feel that your current environment does not see the excellence in what you do, just be patient and continue to excel and you will reap the fruits of your excellent labor — sooner than later.

If you are truly excellent, people will see it one way or another and opportunities will follow you. I love how the Bible encourages us to be excellent:

Whatever you do, work at it with all your heart, as working for the Lord, not for men, since you know that you will receive an inheritance from the Lord as a reward. It is the Lord Christ you are serving. (Colossians 3:23)

Do you see a man skilled in his work? He will serve before kings; he will not serve before obscure men. (Proverbs 22:29)

I believe that everything we do should be a form of worship to our Lord therefore, when we work, it should be excellent because we worship an excellent God. It’s time to be EXCELLENT!

Here’s a very nice video about excellence in the workplace: