The video presents a financial philosophy aimed at children wherein they are advised to allocate their money wisely by spending only a portion of their earnings. The speaker recommends that children spend no more than 70% of their income and outlines a strategy for utilizing the remaining 30% wisely. This allocation includes 10% for charity to foster a sense of responsibility and generosity, 10% for active capital to learn how to generate profit, and 10% for passive capital to understand the value of investments and interest.

This video is a must-watch as it provides foundational financial insights and practical advice for young audiences. It introduces children to useful concepts such as philanthropy, capitalism, and investment, which are framed in a relatable and engaging manner. By starting with small amounts, it encourages them to develop a lifelong habit of financial prudence and responsibility.

Main takeaways from the video:

Please remember to turn on the CC button to view the subtitles.

Key Vocabularies and Common Phrases:

1. capitalistic [ˌkæpɪˈtælɪstɪk] - (adjective) - Pertaining to a system characterized by private or corporate ownership of capital goods, and the creation of goods or services for profit. - Synonyms: (entrepreneurial, free-market, commercial)

We live in a capitalistic society, right?

2. benefactor [ˈbɛnɪfæk.tər] - (noun) - A person who gives money or other help to a person or cause. - Synonyms: (patron, sponsor, donor)

Supporting worthy projects, helping people who cannot help themselves.

3. philosophy [fɪˈlɒsəfi] - (noun) - A set of views or theories held by an individual or group concerning money and how it is managed. - Synonyms: (ideology, beliefs, thinking)

Excellent, excellent philosophy

4. asset [ˈæˌsɛt] - (noun) - A useful or valuable thing, person, or quality that someone possesses. - Synonyms: (resource, advantage, benefit)

Reduce your liabilities, increase your assets.

5. liability [ˌlaɪəˈbɪləti] - (noun) - A financial obligation or debt. - Synonyms: (debt, obligation, responsibility)

Once you understand what taxes are, here's what taxes are.

6. generosity [ˌdʒɛnəˈrɒsɪti] - (noun) - The quality of being kind and giving. - Synonyms: (charity, benevolence, largesse)

No school, no class, no teacher can teach character better than the simple act of generosity.

7. tangible [ˈtændʒəbl] - (adjective) - Perceptible by touch; clear and definite, real. - Synonyms: (physical, concrete, material)

Some profits are tangible.

8. intangible [ɪnˈtændʒəbl] - (adjective) - Unable to be touched or grasped; not having physical presence. - Synonyms: (abstract, immaterial, impalpable)

Some profits are intangible.

9. unique [juˈniːk] - (adjective) - Being the only one of its kind, unlike anything else. - Synonyms: (singular, distinctive, rare)

It'll lead you to unique places.

10. endeavor [ɪnˈdɛvər] - (verb / noun) - An attempt to achieve a goal or an effort toward a given purpose. - Synonyms: (effort, attempt, strive)

It's got you thinking and pondering ways to use your resources and turn it into the dreams you want for the future.

How To Achieve Financial Independence and Freedom - Jim Rohn Powerful Tips

What should a child do with $1? Let me give you the best advice I've got. And this is called sort of middle of the road scenario. And I'll show you how these numbers may change. But here's what I teach kids. Never spend more than $0.70. Now you've got to pick some number. When I met Mister Shoaf, I was at about 110%. But remember, if your outgo exceeds your income, your upkeep becomes your downfall. Good little scenario. So here's the number that I found works best. And in developing a good financial plan, never spend more than $0.70 out of every dollar from now on.

Now kids ask me, what? What do you do with the other $0.30? Here's my best $0.10. Charity, 10% charity. Supporting worthy projects, helping people who cannot help themselves. Some churches teach time, tithe, peace portion, turning back part of what you take out. Excellent, excellent philosophy. That's what that 10% is. And nothing teaches children responsibility and character better than generosity. No school, no class, no teacher can teach character better than the simple act of generosity. $0.10 out of every dollar.

Now you can pick your own number. I'm just giving you my best scenario. Now, the time to start. This is when the amounts are small, easy to give, a dime out of $1. I'm telling you, kids will give you $0.10 out of every dollar if it's part of their philosophy, if you sell them on it. And that's the time to start, when it's easy. $0.10 out of $1. A little harder to give 100,000 out of a million. Someone says, oh, if I had a million dollars, I'd give $100,000. I'm not that sure. We better start you early, when the amounts are small, so it'll all be set in when the big amounts start to come.

Okay, so $0.10 for charity, the next ten cents I call active capital. Capital meaning? Meaning try to make a profit yourself. We live in a capitalistic society, right? Everybody now wants to join capitalism. That's why the walls are coming down. Capital belongs in the hands of the people. That's where the genius is. So the genius is to try to show a profit. Buy and sell, render service, show a profit. Now, here's what I teach kids. Profits are better than wages. Wages are okay, but wages help you make a living. Profits help you make a fortune. The key is to just understand philosophically a little simple economic scenario. And there's all kinds of ways to make a profit.

I'm working on a new book. Here's what it's called. I think it's going to be called. Of course kids should pay taxes. It's going to be an interesting book. In California, where I live, kids do pay taxes. If an eight year old walks into 711 to buy something that costs $1, the proprietor makes him cough up seven more pennies. Eight year old says, what's the seven pennies? Proprietor says, that's taxes. That's taxes.

And kid says, pavon, well, I'm only eight. Proprietor says, congratulations, you're my youngest taxpayer. So in California, kids do pay taxes. Now the question is, should they? Now, the title of my book is, of course kids should pay taxes. You got it. The disciple went and caught a fish, found the miracle coins and paid his taxes and Jesus taxes. So way back then, Jesus did pay taxes. Now the question is, should he? In the answer, my little book says, of course Jesus and kids should pay taxes. Of course. Of course. If an eight year old wants to ride his bicycle on the sidewalk instead of in the mud, you have to pay taxes.

Things cost money. You've got to pay taxes. Aircraft carriers to keep tyranny over there instead of over here. Aircraft carriers cost money. It's expensive to run this whole show. Can't use used missiles. You know, it's expensive to run the whole deal. Of course, everybody has to pay. Now, active capital means try your best to show a profit. Now, there's many ways to show a profit, not just money. Touch something, leave it better than you found it. That's a profit. Some profits are intangible. Some profits are tangible.

Long before Earth day, for all sophisticated people, it was very proper when you left your hotel room to turn out the lights. All educated people, why leave a profit? It's so easy to flip the switch and leave a profit. So as well, a hotel gets the profit. What do you care? All you need to become is a person who leaves a profit. Wow. I talked to a man who runs a whole string of apartments. He said, guess what? Most people, when they rent an apartment, leave it. What? Trashed worse than they found it.

What kind of a reputation would that be? Whatever you touch turns to trash. Whatever you touch gets dirty. Nothing you touch gets better. See, that's a poor philosophy. No wonder it leads to poverty. Small lives, as one writer said, living lives of quiet desperation. This is where it all begins. Failure to leave a profit when you can turn out the lights, doesn't matter what it is. Become profit minded. Profits are better than wages, because profit has the potential to make a fortune. Wages have the potential to make a living.

So I teach kids, take part of your wages if you earned the money, take part of it for charity and part of it to see if you can make a profit. There's all kinds of ways. My book's going to be full of all kinds of ways kids can make money. I teach kids how to have two bicycles, one to ride, one to rent. Now, it doesn't take long to get into business. You don't have to be a genius. Halfway bright, you can start showing a profit.

Now here's the next $0.10 called passive capital, meaning let somebody else use the capital you provided. You're passive, they're active, and let them pay you interest. Profits and interest. unique way to make a fortune. In fact, there's a Bible philosophy I teach teenagers is Bible philosophy. Here's what it teaches. The borrower is servant to the lender. Wow. So where is the power position? Not the spender, a lender. And if I've taught teenagers well, if you ask them among some of the things you want to be, you know, when you grow up, you know, as years pile on, what would you like to be? I'm telling you, among some of the things that they would like to be, if they've sat in on my classes or gotten some of my material, they would say, I want to be one of them. Lenders.

Powerful position. Let somebody else use your capital. Some projects require more capital than any one person has. So we've got capital pools, whether you put it in a financial institution or whatever, right. Earn an interest, earn a profit. Right. Buy a car and sell it for more than you paid for it. Why? Because you leave it better than you found it. Wow. Touch something and leave a profit. Okay.

It's not just wrapped up in money and economics. This helps to teach all other scenarios of life on profits and capital expenditures, what to do with your time, what to do with your life, as well as what to do with your money. Okay? Now this little scenario I call the ideal. Now here's what's important to set up the ideal and work toward it. Because at first you may not be able to do these numbers.

Some people are in such a desperate situation currently, they got to go 97%, 1%, 1% and 1%. I mean, you know, I had to start there. Start with pennies. And remember, it's not the amount that counts. Mister Shaff gave me the clear situation here it is. It's not the amount that counts. It's the plan that counts. When I met Mister Schaff, I'm 25 years old, I said to him, if I had more money, I'd have a better plan.

He said, no, mister Rohn, if you had a better plan, you'd have more money. Six years. Six years in America. Six years. Come on. It's not the money. It's not the amount. It's the plan that counts. So set up an ideal plan like this. Now, you can rearrange this and modify it to suit yourself. I'm just giving you here as an example. So set up the ideal and then start making progress toward it.

Because finally, these numbers are going to change if you move on up into the higher area. Right. The people I work with around the world couldn't spend $0.70 out of every dollar. It would be obscene. That'd be too much. So these numbers are bound to change. I don't know what mine are. Probably 20% up here, a lot larger numbers down here. Okay, so these numbers can change. I'm just offering you a good sample. philosophy. Remember, philosophy is the set of the sail. The economy is not the set of the sail for you.

For you, the set of the sail is your own philosophy, your own thinking, your own plan, your own concept. Don't borrow somebody else's plan. Don't borrow somebody else's concept. Don't borrow the concept. You know, spend all you can, cross your fingers and hope for the best. Don't borrow that. Develop your own philosophy. And I'm telling you, it'll lead you to unique places. Here's two or three more parts of financial independence. Number one, keep strict accounts. This is the best of disciplines.

Keep strict accounts. Did you ever hear this expression, I don't know where it all goes? Do you ever hear that I don't know where it all goes? Oh, we'd love to have you run our company. You don't know where it all go. Whoa. Did you ever hear this? It just gets away from me. It just seems. It just gets away from me. Uh, we'd love to turn the world over to you. It just gets away from you.

Come on, you've got to have better disciplines than that. Let that be the 90%. Let that be the scenario of the 97%. But don't let it be your scenario. Don't let it become your philosophy. Keep strict accounts. Next, a new attitude. I had to develop a new attitude as well as new concepts. Here's what I used to say. I hate to pay my taxes. Shof said, well, that's one way to live.

I thought, well, doesn't everybody hate to pay their taxes? He said, no, no, a few of us have gotten way past that. He says, once you understand what taxes are, here's what taxes are. In our governmental system, in our society, taxes is how you care and feed the goose that lays the golden eggs. Democracy and liberty and freedom, free enterprise. Wouldn't you want to feed the goose that lays the golden eggs?

Someone says, well, the goose eats too much. That's probably true. I understand that. Of course that's true. But see, better a fat goose than no goose. And here's the truth be known, we all eat too much. Let not one appetite accuse another. Of course, the government needs to go on the diet. So do most of us. But, hey, you still have to care and feed the goose that lays the golden eggs. Once you understand that that's what it's for. See, it is so important, the right attitude. Here's what I used to say. I hate to pay my bills. You open up the mails, nothing but these window envelopes, bills. I hate to pay my bills.

Shoaf said, well, that's one way to live. I said, well, doesn't everybody hate to pay their bills? He said, no, some of us are way beyond that. I said, is it possible to love to pay your bills? He said, yes, reduce your liabilities, increase your assets. Wouldn't you love to do that? So start a whole new attitude here. Next time you pay $100 on an account, put a little note in there and say, with great delight, I send you this. $100. I mean, they don't get many letters like that. Reduce my liabilities, increase my assets, my pictures changing, my pictures improving. I love to pay my bills, keep the money in circulation, pay my taxes, feed the goose that lays the golden eggs. It's a matter of attitude.

And here's the last on everybody must pay. Of course, life is called opportunity, but life is called price, that we must all pay. We must all share. One of the classic stories of all time from ancient Bible script says Jesus one day and his disciples were standing by the church treasury, synagogue treasury, watching people as they came by and put their offering in the treasury. And that wouldn't be a bad idea.

Jesus and his disciples standing by the treasury while everybody walks by. Jesus said, how much was that? How much was that? Hmm, interesting. And the story said, some people came by, put in big amounts. Some people came by and put in modest amounts, average amounts. And the story says, then a little lady comes by and puts in two pennies in the treasury, Jesus says to his disciples, look at that.

Look at that. His disciples said, two pennies. Two pennies. What's two pennies? Jesus said, no, you don't understand. She gave more than everybody else. They said, two pennies is more than everybody else. He said, yes, because I'm certain that her two pennies represented most of what she had. And if you give most of what you have, then you've given the most. Wow.

What a lesson to learn. It's not the amount. It's what it represents of your life that counts. Now, let me give you the wisdom of the scenario that did not occur. And this is the greatest of wisdom. And in my own particular, peculiar brilliance, I have the ability to record for you what was not recorded in the scenario of the story. Here's what did not occur, which may teach us one of the greatest of the wise things that was taught in this scenario.

Here's this. Here's what did not occur in this scenario. Jesus did not reach into the treasury and get this little lady's two pennies and run after her and say, here, little lady, my disciples and I have decided that you're so pitiful and you're so poor that we've decided to give you back your two pennies. I'm telling you, that did not occur. If it would have occurred, she would have been, what? Insulted?

She would have rightfully said, I know my two pennies aren't much, but it represented most of what I had. And would you insult me by not letting me contribute what I wanted to contribute, even if it's only two pennies? I'm telling you that did not occur. Here's part of the wisdom of the story that was not recorded. Jesus left her pennies in the treasury, meaning everybody has to pay, even if it's only pennies.

That's the key. And whether you start with pennies or whether you start with dollars or whether you start with nothing, remember, part of the scenario is to spend. Of course, part of the scenario is to invest. And part of the scenario is to show a profit. And part of the scenario is to help take care of people that can't take care of themselves.

If you'll set up your own philosophy, I'm not asking you to buy my philosophy. I'm not asking you to adopt my numbers. I'm only wanting to provoke you to think, for you to come up with a splendid economic philosophy that's got you up early and got you up late. It's got you thinking and pondering ways to use your resources and turn it into the dreams you want for the future. And that's my little story on financial independence.

Education, Inspiration, Economics, Financial Planning, Personal Finance, Generosity, Daily Wisdom