Last weekend, I was sitting at home, talking to our two chocolate labs, Rylee and Cassie, about macroeconomics. I asked them, “You know about important things like the sad state of excessive US debt, interest rates, and challenging economic conditions on the leg of the ‘K,’ right?” They looked back at me with a quizzical expression, letting me know they were missing the point.
So, I tried again and asked them, “Okay then, do you think the FED or the Treasury will be able to protect the dollar’s reserve currency status?” Again, blank stares. I could tell they wanted to answer (after all, Labs do all they can to please), but that I was speaking a foreign language.
Knowledge of Basic Economics
What is so sad is not that our chocolate labs cannot answer these questions, but that if I sat among a group of young, everyday Americans and asked the same questions, I would get the same looks. People might have heard of the Federal Reserve and our “K-shaped” economy, but I doubt the discussion would go any further. For most Americans these days, news is consumed in sound bites or social media headlines.
Critical thinking and in-depth reasoning are rapidly fading, replaced by TikTok videos and AI pundits. No one believes every American needs to be an economist, but understanding the economic news and how it might affect your life or finances is essential. The older you get, the more important it becomes, as your window for course correction narrows. Knowing the difference between real economic news and AI-generated or fake economic news is essential. Mastering basic financial skills and concepts early in life makes life a whole lot easier.
So, if I could share some financial and economic lessons with our chocolate labs and younger Americans, what would they be?
Basic Financial Skills
We have written many times about the lack of math skills among our youth. Those articles have focused on basic concepts such as addition, subtraction, multiplication, and division (see the reference section of this article). Even the ability to mentally calculate change from a dollar seems lost. Today’s younger generation can swipe, tap, and click better than they can count. If the cash register breaks or the internet goes down, the store goes silent, and checkout lines back up. Like Latin, math is becoming a lost language.
This is a recurring theme for us because a mastery of math, even rudimentary, is a building block of a successful life. There is nothing you can do or choose to do as a profession that does not eventually involve math. And if you cannot make change for a dollar, you cannot master even simple skills, such as understanding the value of compound interest.
Hard Work
Nothing is more important than work. Work obviously provides income, but it also builds self-esteem, creates contacts, fosters friendships, and offers opportunities. Hard work is even better because it sets expectations for those around you and leaves less time for spending.
“Hard work beats talent when talent doesn’t work hard.”
In the 1930s, industrial engineer Allen F. Morgenstern coined the phrase: “Work smarter, not harder.” This was never meant to be a choice but a way to combine efficiency with hard work. For most of us, it is this combination of working smarter and harder that paves the way to success. It is an encouragement to avoid wasting effort and to optimize how you use your time.
“Start by doing what’s necessary, then what’s possible; and suddenly you are doing the impossible.”
Hard work also brings other benefits, such as achievement motivation. It reinforces that talent and intelligence help, but nothing replaces effort, and that effort toward a task can overcome different obstacles. Eventually, you learn to combine effort with the desire to succeed, and the key to success is to do your job better than anyone else. It is a dog-eat-dog world out there, and you want to be the leader of the pack.
Spending and Delayed Gratification
Nothing captures the generational shift between early Baby Boomers and today’s young adults entering the job and housing markets more than HGTV. My wife and I often marvel at young people in their late twenties or early thirties buying their first or second home.
Invariably, they cannot purchase a house without the perfect granite countertops, dual-lavatory bathrooms, an open-concept living area, and a gas stove with six burners. All of those things are nice amenities, but not in a starter home. If they are essential, and I mean really important, to you, you need to look up and understand the definition of conspicuous consumption.
“We have built houses we do not need, to impress people we do not know.”
Looking for those amenities in your first house leads to a higher-than-necessary mortgage and makes the sellers very wealthy. Deciding to buy a home and immediately have it renovated is even worse, because it usually confirms that you made a bad purchase decision and are willing to compound that decision with additional debt.
We may not have a housing shortage as severe as that described in the media. Instead, we might have a combination of geographical mismatches, unreasonable expectations, and ignorant buyers. My wife and I had granite countertops in our fourth or fifth house in our forties, when we could afford them, not in our twenties or thirties, when they would have saddled us with debt. Sweat equity in your first homes (all homes, really) builds wealth and lets you acquire skills along the way.
Saving and Compounding
If you have a job, you can save. If you have an entry-level job and you can only save a little, you can save. Even if only $5 a month, you can save. If you are lucky and grab a really well-paying job, you can save more. In America, if you develop good saving habits early in life, you will become wealthy. A fifty-cent cup of coffee from home or a dollar coffee from a gas station saves you about $5 from a designer coffee store like Starbucks. Better yet, wait until you get to work and see if they have free coffee. If having your friends see you with a Starbucks cup is essential for some reason, buy a Starbucks tumbler and fill it up at home. Five cheaper coffees in a week buy you one share of Energy Transfer (symbol ET) stock with a 7.5% dividend. Keep buying and let the dividends compound, and before you know it, you will have the beginning of your first stock portfolio. The path to wealth is all about goals, discipline, compounding, and time.
“Time is your friend; impulse is your enemy. Take advantage of compound interest and don’t be captivated by the siren song of the market.”
There are many of these opportunities we face in our lives, and the decisions that make you wealthy are small ones. But the compounding effect of those decisions is huge.
Study, Constantly and Forever
All my life, I was surrounded by adults who read daily; my wife reads constantly. When I was younger, this mystified me, but as I matured, I came to understand. These people loved learning, the constant growth that comes from education, and that education starts, not ends, when you leave school and go into the real world.
"Anyone who stops learning is old, whether at twenty or eighty. Anyone who keeps learning stays young.”
A person who masters carpentry can build or repair their own house, creating value in their skills and in what they can build. A company manager learns skills that can be transferred to other companies, creating opportunities and worth. A parent who teaches their child to work multiplies these values through example and by pushing them into the future.
“Commit yourself to lifelong learning. The most valuable asset you will ever have is your mind and what you put into it.”
Economically, find something that fascinates you and get into the details until you know that facet of finance; then move on to the next thing and master it, and use this knowledge to multiply your effectiveness in your own investing.
Love of Ignorance
Many in Washington want our understanding of most things to peak at about the level of a chocolate lab. Ignorance of money, economics, and how our government finances itself is not an accident; it is how our elected representatives govern. It is one of the only examples of ignorance being viewed as a resource. This is not an American phenomenon; it is universal. In any country with massive debt and trade deficits, politicians benefit from the complexity of their economy.
Even in America, I have become convinced that it is in the best interest of our Federal and State Governments (politicians) for citizens not to understand many of the financial issues we face today. That is more than a little bit cynical, but it is true. The more you know, the more you dig in, the worse it looks.
‘When government fears the people, there is liberty. When the people fear the government, there is tyranny.’
The proof is in the results. In Washington and in state capitols, we talk and talk about improving our education systems, but it never happens. We outspend the rest of the world per student without accountability for teachers, parents, or students.
If our education system is so poor that our children cannot do basic math, then our politicians can never be challenged for their poor monetary and fiscal behavior. Our children must be able to understand math, finance, and economics at least at an introductory level for us to be free. Last week, I learned that most state prisoners in Georgia have an average of a fourth-grade education. So, the state forecasts the need for prisons based on fourth-grade test results. A sad commentary on public education and politics on many levels.
We need to set goals for educating our children far beyond what our chocolate labs can achieve and hold everyone accountable for those goals.
References and Additional Reading
Related Internal Links
Simple Test, Big Implications, April 28, 2022.
Inflation and Debt, November 20, 2023.
Inflation For the Rest of Us, December 12, 2023.
Financial Decisions of Our Youth, June 6, 2024.
The reference to Energy Transfer (Symbol ET) is not a stock recommendation; it is an example to convey the concept of investing and dividend compounding. Many examples are just as relevant.
From Cradle to Grave: Lifelong Learning Quotes to Embrace Knowledge at Every Stage, by Albert Einstein, The Education Magazine, theeducationmagazine.com, Last accessed January 14, 2026.
Hard Work Beats Talent Quote: Unpacking the Power of This Timeless Quote, by Admin, TumGazeteler, tumgazeteler.com, September 24, 2023.
Henry Ford – principles of service of a self-made man, Henry Ford, henry-ford.net, Last accessed January 12, 2026.
How to Work Smarter…Not Harder!, by Nancy Mendelson, Hertelier, hertelier.com, October 7, 2021.
The problem with “working smarter, not harder”, by Staff, Wingspan, libertywingspan.com, March 24, 2023.
