Do you know where your money goes? Curits Banks, author and Money Smart Mentor, discusses his journey in learning how to make money work for him. Visit his website to learn more about him and what he does.
Emmalou Penrod
Hello, and welcome to the first of a series on understanding how money works. Money is a big challenge for most families. In fact, many studies have shown it’s the leading cause of divorce. So I’m happy to introduce this series of addressing just how money works and how you can make it work for you. Today, I’m really honored to have a special guest. This is Curtis Banks. He’s a financial educator, and Money Smart Mentor, and he’s going to talk about take control, get control of your personal economy. Curtis, welcome.
Curtis Banks
Thank you, Emmalou, I am so excited to be here with you on this podcast. I recognize in today’s time how important it is to get control of the money that you make, and to create your own personal economy, to fulfill your own family’s needs, and prepare for the future. And building wealth for the long term.
Emmalou Penrod
And I’m excited to have you because I know you are probably the best example I know personally of someone who has mastered this, and is helping to teach it to others. I love your story. You weren’t born wealthy, were you?
Curtis Banks
No. Thank you, you know, I’m so excited to be able to share what I’ve learned and experienced. And today, I am financially free. And it allows me to have better control of my lifestyle and prepare my family for the next generation. But it wasn’t always this way. In fact, I was born in a three bedroom house with no running water and no electricity on my grandparents farm. My grandparents had a third grade education. And they were sharecroppers. They raised 17 children in that three room house with no running water and no electricity. That’s where I started. And it’s just a great example that where you start isn’t necessarily where you have to finish.
Emmalou Penrod
No, not at all.
Curtis Banks
And so I’m here to share with you today that there is hope. And there’s opportunity for you to get better control of the money you make. And notice I call this get control of your personal economy. Most people don’t think about their household as their personal economy. Just like the larger economy, there is inflows and outflows. And there are things that you have to do in the middle. And what we do at Money Smart Education is we teach how money works. So that you can get control of the inflows, what you do with it once you got it, and control the outflows better. And we have some very straightforward concepts that people don’t learn in school. Now, how do I know people aren’t learning this in school is I didn’t learn it in school. In fact, my parents worked to really provide a good education for us as we’re growing up. And they instilled in us some really good habits to get a good education so we can get a good job. And I actually did that in the first 10 years of my career. And the results were at the end of the 10 years I had made, I was making more money my parents. However, I was spending practically every dime I made. I don’t know why. I didn’t have any financial education. But I didn’t see myself as having a problem at the moment. But it came to a head as I neared the 10 year mark in my career.
Emmalou Penrod
So you had learned how to earn money, and you knew how to spend it.
Curtis Banks
Yes, I knew how to bring it in. I knew how to let it go out. Right, but I didn’t understand what to do with it once I got it. So this is, this is a, conceptually think about this as a concept for a moment. Incoming money, what you do, how you make manage it, and what goes out. I had the in flow really well, because I was doing the career that I loved. And I was making more money than I thought I would ever be making. And I was letting it go out as fast as it was coming in. In fact, it was going out faster than it was coming in. Because I created debt, I create a significant amount of debt, which meant I had just mortgaged future income to pay off debts that I’ve made in the past. And that was traumatic, it was a traumatic time for me to be working a part time job, and still not making ends meet and spending more and more time away from my family. Because my outgoing was greater than my income.
Emmalou Penrod
So you were working full time, a full time job, that job that you love that paid very well, and then a part time job to help cover expenses. When did it all come to a head? When did you finally realize something has got to change?
Curtis Banks
Thank you. It was insane. It was insane. When I look back at it, right. And it all came to a head. One day, I’m sitting at my dining room table. I’m staring at this big stack of bills. And I just got off the phone with my third bill collector. And bill collectors are mean people. They all three share with me how terrible the person I was, because I was not meeting my financial obligations. I was feeling pretty low at that moment. And I had done everything I could do that I knew to do at time to overcome the situation. I had gotten a part time job. And I had gotten consolidation loans. And I had done all that I knew to do, but yet the challenge persisted. So the only thing I knew at that time, was to put my face in my hand. And I began to pray. I prayed for a better solution, a better way to manage my money. And that began my journey. It was like a commitment to do better. I didn’t have all the answers at that moment. But I began a journey to pursue the answers. And the answers began to show up. And as they showed up, I learned more about what to do with the money that I make. And I created over the next 15 to 20 years, I created a system that worked, that allowed me to one, increase more income, and manage what I make in a way that allows me to keep more of it. And to prepare for my longer term. And manage consistently, what goes out.
Emmalou Penrod
So this is something you basically taught yourself. Did you have other mentors or help along the way?
Curtis Banks
Yes, the best thing any of us could do is to get help. Just attempting to do something you’ve never done before by yourself is a long road. So what did I do? I began to read books, books about money, from how to manage your money, find personal finance to investing. And as I learned more, I began to ask deeper questions. And then I began to interview and talk to people who were doing the same thing I was doing so that I understand more of the perspective. And then I talked to people who were building wealth. And I was so surprised that people who are building wealth learn and do things different than people who were spending all their money. And I began to pay attention to those subtle things that they were doing. And I applied them to me and then it became a system.
Emmalou Penrod
You know, that’s why I knew I could learn from you because you’ve been through it. You’ve done it. You’re an example of how to master these skills.
Curtis Banks
Yes, they are skills and when we’re in school, they’re teaching us to prepare to get a job. They’re not teaching how to keep money and not teaching how to build wealth, which is what I teach. And this is what I share with people because making money is one thing, creating wealth from that money is another. And it’s not taught in schools. Now, let me say this about the school system. The school system is really great at teaching you what you need to know to get a job. They’re pretty much designed do that, because they work with industry. Industry is saying, “Hey, people need these kind of skills. People need these kind of skills.” And so they do a great job of giving you the skills that industry is needing, because it keeps the industries going. And it works. If you want to learn how to build wealth, the school system is not your place to go. You have to go outside the system, to learn how to build wealth. That’s one of the big takeaways that I had. Now, again, this is not a knock on the school system, because they are doing what they are designed. And the teachers, if they understood how to build wealth, they would be teaching. Because they are committed to doing what they do. So they teach you what they know. And I learned a lot in the school system. And I have a great education from the school system. And but I had to learn about money and building wealth outside the system from people who had actually done it before.
Emmalou Penrod
Can you talk just a little bit more on what you mean by building wealth? You know, a lot of people think I’m earning money, you know, I’m wealthy. But you’re designating that’s not the same thing as building wealth.
Curtis Banks
You are so so right. So wealth, as it turns out, is not income. Wealth is not being rich either. So rich are people who have lots and lots of income. They aren’t necessarily building wealth. Wealth, by definition, can be measured in time. And so here’s how I describe wealth. Your wealth, is the number of years that you can maintain your current lifestyle when your job stops. The number of years you can maintain your current lifestyle when your job stops. That sounds familiar, right? It’s retirement. We are all right in the workforce. People look forward to retirement, which means the job stops, so that from that point forward, they’re living their lifestyle based upon the wealth that they’ve created while they were working.
Emmalou Penrod
That’s more than just putting money in savings.
Curtis Banks
It’s savings and investing. For example, for many employees, companies have a 401k, as an example. The 401k is an investing machine that allows you to create wealth. So you put a percentage of your income in. Many companies will match with an instant growth from what you put in. And so the 401k is a great way for an employee or business owner to create one to begin investing for the long term.
Emmalou Penrod
And I understand that if your employer has that program set up, that’s a no brainer, of course, you’re going to want to participate in that. But that isn’t enough, is it?
Curtis Banks
Depending upon how much wealth you’re looking to create, right? So we have to remember that wealth is the number of years you can maintain your current lifestyle, when your job stops. So it’s important to know your number. So your wealth number is not the same as mine. And my wealth number is not the same as Warren Buffett’s. Right? So we don’t compare our wealth. In other words, I don’t compare myself with other people. I use as an example to show you that your number is your number, my number is my number. So let’s say as an example, you want to maintain the lifestyle of $10,000 a month, then you’ll need to have accumulated enough sources of income that are passive that will provide you with $10,000 a month and it could be a 401k. You could be investing in real estate. You could be investing in the stock market. You have many, and you can have a business. So you have many options for how you create your wealth for the long term.
Emmalou Penrod
Well, writing a book and earning royalty on the book you wrote, is that a passive income?
Curtis Banks
Absolutely, absolutely. And what’s really cool about these are they become passive later in life. In other words, the royalties, they come in whether you go into work or not. The 401k, you can set up a scheduled payment once you retire. And it shows up every month, whether you go to work or not, right. That’s the idea around your wealth is that at that stage in life, you don’t have to work to get it. You’ve already done the work. Now it’s there for you. Isn’t that cool?
Emmalou Penrod
That is way, cool.
Curtis Banks
So the system is designed in a way that you have all kinds of tools available to you. What I come to understand is that in the first 10 years of my career, these things were there. I didn’t have the understanding to utilize them. So back when I started my first 10 years, there was a 401k. There was all kinds of things, real estate and stockmarket. All those things were there. I just didn’t have the awareness to use them.
Emmalou Penrod
Yeah, you had the income, but you weren’t building wealth.
Curtis Banks
That’s the sad part about it, Emmalou, is that I had the income. I just didn’t have the awareness of what to do with it once it came in.
Emmalou Penrod
My thought when you said that is some people don’t have the income, but they can still manage what they have.
Curtis Banks
Yes. Always, always be responsible, and manage what comes in. Here’s an example. The average income in the US is somewhere around $64,000 per year. If you took 64,000, if you had 64,000, or income, and if I asked you, do you make enough to save? You have two choices? You can say yes or no? Right?
Emmalou Penrod
Right.
Curtis Banks
If you say yes, then you’re really onto something. But if you say no, not only is it likely that you won’t save now, when you’re making 64. But when it doubles in the next five to 10 years, you’ll be making 128? You’ll say the same thing.
Emmalou Penrod
Yeah.
Curtis Banks
When the income and mind doesn’t change, you do the same thing you did with the lower income, you will do it with the higher income. Yeah, that was my experience.
Emmalou Penrod
You’ll establish that pattern. And if you’re not in the habit of saving I, I’ve heard that on whatever income you have live on less than you make. Yes. And really, that’s doable, we work so hard to keep up with the neighbors and you know, get a new car every year or whatever. And we don’t really have to do that if we have this long term. And it sounds like this is what you’re talking about a long term vision.
Curtis Banks
You have to have a longer term view. And here’s here’s an example of a longer term view. So we talked about $64,000 as being the average income. And some people will say they don’t make enough to save. And some will say Yes, I do. But what would happen if you actually did save 10% of the 64,000? over a 40 year period, right? So most people work 40 to 50 years. So over a 40 year period, that $64,000 turns into $2.4 million. Right? It turns into $2.4 million. So it’s a lot of money. So if you think 64,000 isn’t enough to save, look at what it can become over 40 years, which is 2.4 million.
Emmalou Penrod
And that’s without adding any interest.
Curtis Banks
Right, right. That’s just if you every year, if you took 64,000 and then the next year you had 128, right? So every year you’re adding 64,000 to the number so it’s 64,000 times 40. It turns into a big number times 40 years, but
Emmalou Penrod
You’re saving 10% so if you think 100 right, yeah, you’re saving 10% of the 64,000. So that 6400 a year okay, yeah,
Curtis Banks
Right. So what I’m right on so at the end of 40 years, if you accumulate all the 64,000, you would be at 2.4 mil But if you save 10% of that 2.4 million, you’d have $240,000 saved.
Emmalou Penrod
Yes, yes. Yes.
Curtis Banks
And if you were saving in, say a 5% interest, you’d have over $700,000.
Emmalou Penrod
Yeah. Right. Yeah.
Curtis Banks
So thinking about it from the long term has advantages. That if you only think about it as a monthly income, it will look like a small amount. And people will spend it, right. They’ll say, Oh, I don’t make enough to say, but if you only think about it for the longer term, and decide to keep 10% of it.
Emmalou Penrod
So you see that small monthly amount adding up?
Curtis Banks
Yes.
Emmalou Penrod
And it makes a difference. Yes, I agree. Yes.
Curtis Banks
Huge. So someone who makes $64,000 a year, that saves 10%, at 5% interest, can have over $700,000, accumulated over a 40 year period, and be in a much better position when they get ready to retire.
Emmalou Penrod
And if they’re able to find an investment that earns more than 5%,
Curtis Banks
They’re out there, in fact, a 401k, managed appropriately, should be averaging somewhere around between 10 and 15%. And I say that, because when you look at the growth rate of the stock market, which is what most 401 K’s are built around, including bonds and have some other types of investments in them. But they’re fundamentally based on the stock market. And the market is growing like crazy. In fact, even today, we’ve seen all time highs in the last month for all three majors like the S&P, NASDAQ, and other indices are just growing like crazy.
Emmalou Penrod
And there are other ways to invest. Now I know you personally have also invested in real estate,
Curtis Banks
Yes. So part as I was visiting with people and learning how they built wealth, there are a few things that’s continued to show up stock market, real estate, and business, starting a business. And when it comes to real estate, but one of the most important things you can do is to own where you live. Now, I know there are a lot of opinions out there about I look at the numbers, look at my own experience. And I remember and and utilize what I learned from other people. So if you own where you live, you get to create equity in your property. And home ownership, it turns out, in the US, is the foundation for building wealth for the middle class. It’s been this way for many, many years. So if it can work for them, it can work for you. Right?
Emmalou Penrod
Yeah. Now I know at this time, there are a lot of young people struggling to get into that first home and because of the current, but it still is a dream worth having. And I understand in some cases there can be a rent on or what hope you have for those young couples just trying to get in that first home.
Curtis Banks
There are so many ways that you can get in. Most people will look for ways to to not do it. I mean, that’s just way.
Emmalou Penrod
They’ll choose to rent.
Curtis Banks
They’ll look for ways to not so if you choose to do it. There are many ways to do it with minimal down payments and options to get into the market. So today, the interest rates are lower than they’ve ever been. Housing prices are moving upward. And in many areas, they’re higher than they’ve ever been.
Emmalou Penrod
Yeah.
Curtis Banks
And the demand for housing continues to go up. So I’ll share with you a secret about housing. And this is I learned this years ago, and I apply it today. And the secret is the demand is ever growing. So when you have a high demand for something the prices tend to go up.
Emmalou Penrod
Yep.
Curtis Banks
So we’re not making any more land.
Emmalou Penrod
Nope.
Curtis Banks
Right. Here’s the key. The high school graduates, the high school graduates, are always, a good portion of them, will always be looking for a place to live. Do you have any idea how many high school graduates we had in 2020?
Emmalou Penrod
I’m sure it’s a huge number.
Curtis Banks
About 3.7 million high school graduates in 2020. Yes, it’s an alarming number. And the numbers continue to go up. So the demand for housing is continuing to go up. Yet the amount of space available stays pretty much constant. What does that do, this drives demand. And so I learned this really, really early on, people need a place to live. And that makes real estate, an ideal market for investment. So starting with the place I live, I began that journey. And then I began to invest. And properties so other people can have a quality place to live.
Emmalou Penrod
Good to know.
Curtis Banks
Yes. And so I think Emmalou there’s just so many wonderful tools available to begin the journey to building wealth. And it’s a matter of learning about them, and understanding how they work and creating your own personal economy strategy. Right? So how much am I going to be focusing on on my 401k, or the stock market real estate, and starting a business so that I can create the personal economy that I desire to have 10, 20, 30, 40 years from now, when I choose to retire? I have these sources of income that I’ve worked so diligently on for the last 40 years.
Emmalou Penrod
Yes, and you are an excellent person to be teaching that because you have learned it, you’re you’ve done it, you’ve got the information, how do people contact you?
Curtis Banks
Emmalou, Thank you for that. I can be reached at Curtis Banks 360 dot com. And when you go to Curtis Banks 360 dot com, it’s a it’s a place where you can get access to me either on social media, all social medias are at Curtis Banks 360 dot com. My book is available at that site location, The Book on Money Management, how to build a foundation for wealth. This book, I wrote over a 15 year period, it took me 15 years. Why? Because I was learning how many works, and I was applying these strategies, and I was making notes that were at a detailed enough level so you can understand the concepts. So that I can teach the concept and my focus originally was for my family. And you talk to my kids, they’ll tell you we used to have these financial meetings every week. And and part of that was my growing into it. And part of it was growing them into it. And and they are my two youngest children are in this business with me now. My youngest son does all the website, and then all the technology that’s on the website, and then my youngest daughter is in our client services, and she helps our clients from the time they sign up for one of our programs, to engaging in the program and being there to be a facilitator for them and their growth. I am so excited about this that it is it is so so inspiring for me to see my kids in this business and see them doing what the book and our training is all about and seeing their success.
Emmalou Penrod
Well, and what a legacy for them to see this example have been taught the skills and the tools to use. And, you know, what greater legacy could you live? Could you leave for your children and then teaching them how to have a better quality life?
Curtis Banks
Absolutely. And so, on that on that site, Curtis banks 360 dot com, you can also download my contact information directly to your phone. You can also schedule a one on one time with me. You don’t have to call me to say hey, can we talk? Just go to the calendar and schedule a virtual coffee. And we’ll have a open conversation. You can ask questions and I’ll share with you answer any question you have. And I’ll share with you my experience. And it’s all about helping people who have an income to work on increasing it. And there are some things you can do that you may not be aware of. I’ve learned a number of things that I can do to increase my income that I just wasn’t aware of before and then how to keep more of your money. That is when I say keep that is money that you don’t spend you get to keep it and I call that money you saved. And then for the money you save, how do you grow it? Right? So we talked about some odd options 401k, real estate investing, stock investing, and starting a business. There are other things you can do. But those are fundamentals that you can do to grow the money you keep. And then the next step is all about protecting the wealth that you’ve created. How do you protect the for the next generation so that your next generation will have access to what you intended them to have access to? without going through the probate system?
Emmalou Penrod
This? I’m glad you brought that up the protection? Yes, I know, I’ve talked to so many people who they thought they had that 401k they had that. And then a medical emergency came up some crisis, and it took the whole. So how do you protect that?
Curtis Banks
I don’t want that. So there are some really good protection strategies that I’m willing to share with you. And you have to be thinking about that for the long term. Otherwise, all the work and effort you put in over the 40 years, and all that what you’ve accumulated becomes at risk for the next generation, because probate, unfortunately, what it does is the state is looking for the tax that it can get from the estate of the person who passed.
Emmalou Penrod
Yeah, yeah.
Curtis Banks
And the lawyers are looking to make as much money as they can, in that probate transaction.
Emmalou Penrod
Well, yeah,
Curtis Banks
right, which means that your family will get some number less than 50% of the total estate,
Emmalou Penrod
if you have not planned properly, Oh!
Curtis Banks
If you’ve not planned properly. So there are two parts of protection. So there’s two aspects to his protection, right. The first is where you’re living. And the second is, after you pass, right, so that it goes to the right people in the right portions, the way you intend it to happen.
Emmalou Penrod
This is wonderful. Curtis, you have a lot. Yeah, to share with families. And I, I know, I’ve been working with Curtis for a couple of years. And I am so grateful for his expertise and how much he’s helped me. So I encourage families to reach out to you and get some, you know, they say knowledge is power, but it isn’t just the knowledge, it’s applying the knowledge, learn what to do and do it.
Curtis Banks
Yes, yes. Here are my three words. Learn, understand, and practice, it’s embedded in everything I do. So you have to learn the top topic. So learn about wealth. And then aim to increase your understanding, you have to begin to practice it. So take the first step, start learning about your 401k. Start, learning about real estate investing, look into buying your own home. So as you begin earning, your understanding will go up. And then you will learn more. And you practice your understanding goes up. And that is such a powerful technique. That is it’s fundamentally built in everything that we do. From the programs to the mentoring, it’s built in.
Emmalou Penrod
Awesome!
Curtis Banks
Emmalou I, I’d like to give a quick shout out because I’m so proud of you and what you’re doing here.
Emmalou Penrod
Thank you, Curtis.
Curtis Banks
It has been my desire for many, many years, as I began this journey, to help other people. And when I made contact with you, when you and I met, it was apparent to me really clear right up front, that we have something really powerful in common. And that is our desire to help families to learn how money works, so that they can create the kind of lifestyle they desire, and then be prepared to create wealth for their next generation. That was so apparent to me that you and I have been on this journey together and what you’re doing In Support of Families is so powerful I am. It’s my own my personal honor to be a part of this and to do what I can to help you and to help the families that you’re here to help.
Emmalou Penrod
Well, I’m glad Curtis because you’re going to be able to help a lot of people. Thank you so much for your time.
Curtis Banks
You are welcome. It has been my honor and pleasure and for those who are looking to reach out Curtis banks 360 dot com. When you go there, you can order the book, you can schedule time with me. You can look into some of the other things that we’re doing at Money Smart education. Most importantly, reach out schedule a virtual coffee and let’s begin to understand what we can do to support where you’re going.
Emmalou Penrod
Awesome. I agree. I’ve read the book. It is definitely worth it.
Curtis Banks
Thank you.
Emmalou Penrod
Well, thank you, Curtis, and you have a great day.
Curtis Banks
Thank you.