My first distinct memory of money was during a night out with my family at a local pizza shop. I don't remember how old I was, but I'd guess no older than six or seven. The restaurant had a jukebox and I asked my dad for money to pick out a song. Instead of handing over some change, my dad asked, “Is it worth your money?”

I told him no and he responded, “Then it's not worth mine.”

The next time we went to that restaurant, I found myself eyeing the jukebox again. And again, I asked my dad for some money to pick songs on the jukebox. My dad asked the same question: “Is it worth your money?”

This time, thinking I was clever, I said yes. Then my dad said, “Great, then you can spend your own.”

This lesson in the value of money is one of my most vivid memories as a child. My parents generally did the right thing with money: they didn't spend more than they earned and they were good savers. But beyond that, they didn't sit down and teach me about money. Money wasn't an off-limits topic, but it also wasn't a focal point of our routine family dinners. My perception is this isn't uncommon among most families.

So when do we get an opportunity to learn about money?

We don't learn about money basics in elementary school. We don't teach high school seniors how to budget or pay bills. Most college graduates don't take a course in personal finance or receive an unbiased education in the right way to invest money. It's even more unlikely they took a deep dive into financial planning topics like how to plan for retirement, buy a home, save for a child's education, or any other situations in life that require an understanding of how to manage money.

In school, you are given a lesson, then a test. In life, you are given a test and then you learn a lesson—and money lessons can be expensive.

I was fortunate in that I took an interest in basic personal finance as a teenager. It started when my grandmother gave me a share of Nike stock for my 12th birthday. I remember sitting in my parents' living room near the Christmas tree (I have a December birthday) and thinking this gift was boring relative to the video games I also received.

But then we started talking about the mechanics of investing and how the share of stock meant I had an ownership stake in one of my favorite brands. Maybe it was the fact that Nike seemed to be worth more every time I checked the newspaper or maybe it was the dividend checks I received for doing no work at all, but it didn't take long for me to be hooked on the idea of investing.

A few years after that birthday, my parents took me to the bookstore to buy an investment book geared toward young adults. The first one I picked out was Peter Lynch's Learn to Earn: A Beginner's Guide to the Basics of Investing and Business. This book is arguably the most influential book I've ever read. Not necessarily because it was the best book, but it was the source that turned an interest into an obsession.¹

In high school, I asked my parents to subscribe to the Wall Street Journal so that I could read the Markets section. In college, I devoured books and periodicals on investing, personal finance, and economics. My parents were thrilled because I didn't like reading throughout most of my childhood. But reading about finance was different. Making good money decisions fascinated me. It was like solving a puzzle. There was a way to “win,” which appealed to my competitive personality. And while I deeply regret not reading more of my assigned materials in high school, to this day I can't figure out why some of these financial issues weren't being taught in the classroom, too.

What I read in those investment books stuck with me, and even before I reached adulthood, I was laser focused on making the right decisions with my money. As a kid, I worked as a referee for youth basketball games in the winter. In the summer, I worked as a camp counselor on the weekdays and then a car wash and restaurant on the weekends. I contributed the money I made from these seasonal jobs to a Roth IRA even before I went off to college. That early start with finances and investing set me up for success year after year in my adult life.

I didn't start with a lot of money. I didn't use any complicated strategies in an effort to beat the market. From the ages of 13 to 18, I worked and earned a little cash. I read some basic information and consumed enough material to stay interested and engaged. And I invested in the stock market.

There was no magic involved, no trademarked secrets. Starting early and keeping things simple laid the groundwork for my financial success in adulthood. Regardless of when you start, you can use this blueprint for success, too.

THE MOST POWERFUL TOOL IN YOUR FINANCIAL TOOLBOX

“I just want to make sure I'm doing the right thing.”

That's what most people want when they start asking questions about their finances. Maybe you are just finishing college or graduate school. Maybe you just started earning enough to begin start saving more or aggressively paying down debt. Maybe you just had a child and need to understand how to manage your increased expenses (along with a whole new set of child-centric financial goals). Maybe you inherited money and want to ensure you make the most of it.

Regardless of your specific situation, we all need to understand our money and what to do with it. That's not easy to do on your own. The earlier I can reach a person in their life, the bigger the impact I can make on their financial success. That's not because I'm going to help them earn a few extra percent on their investments. It's because I'm going to leverage the power of compounding by putting systems and processes in place that encourage good financial behaviors.

Financial success isn't magic; it's engineering. And time is the most powerful tool in your financial toolbox. Time allows compound interest to grow wealth exponentially. Time allows basic investment theory to hold true. Time and thoughtful planning allow you to make your hard-earned dollars support the life you want to live.

For most of my career, I've been known as an investment expert. This reputation was built by helping countless individuals and institutions as a financial advisor by distilling complicated investment issues into understandable information. Along the way, I've also written monthly articles for the Wall Street Journal and Forbes while sharing my insights across a wide spectrum of national media outlets. Today I'm the Chief Investment Officer at Plancorp, which manages billions of dollars for clients across the country. I'm also the Chief Investment Officer of BrightPlan, a digital advisor designed to democratize fiduciary advice.

Despite those credentials, this isn't an investment book. Yes, investments are a very important part of a financial plan and we will talk about the fundamentals here. But it's so important to understand that fancy, convoluted investment strategies don't ultimately determine financial success. What this book will do is take you step by step through the process of getting your financial house in order and keeping it that way forever.

ENVISION WHAT YOU WANT, THEN CREATE A PLAN TO GET THERE

All too often, people make money decisions without the end goal in mind. They focus on the near term instead. What I recommend is starting with questions like these: What is your perfect money situation? How much would you need to be happy?

I'm not asking for a dollar amount. Picture your life with money never being a concern. For me, that means not worrying about whether each and every purchase is worth it. I order what I want at a restaurant. I take a vacation to the destination of my choice as time and logistics dictate. I live in the house that I want. I want to maintain my existing lifestyle and the comforts that I've worked hard for throughout my career. This is what the perfect money situation looks like to me.

What does financial success look like to you? We'll outline the steps you need to take in order to achieve your perfect money life.

IT'S NOT EASY, BUT IT DOESN'T HAVE TO BE HARD

There are very few things that people delay more than taking steps to improve their finances. It's cliché, but I frequently compare getting financially fit to getting physically fit. We all know we should eat healthily and exercise regularly, and yet most people don't abide by these simple rules. Perhaps the lack of immediate results is what discourages people from going to the gym five times a week or avoiding late-night snacks. For others, maybe it comes down to struggling to find the time or maintain the discipline required to live a healthy lifestyle.

Improvements to your health aren't achieved after a single 30-minute workout or a week of healthy eating. But the amazing thing about money is that you can permanently improve your finances with a single 30-minute activity such as automating your finances or completing one of the worksheets provided in this book (all worksheets can be downloaded at peterlazaroff.com/worksheets). It sounds easy enough, but there are some common obstacles people face when making these simple improvements in their life.

For starters, the number of choices and deciding where to start tends to paralyze people. For example, research shows that employee participation in 401(k) plans decreases when more investment options are available.² But this phenomenon isn't limited to finance alone. It's part of human nature.

One of my favorite examples of this comes from a study of shoppers sampling jams at an upscale food market. One day, shoppers saw a display table with 24 varieties of gourmet jam and received a $1 off coupon for sampling any jam. On another day, shoppers received the same coupon for $1 off any jam, but only six varieties of the jam were on display. When the time came to purchase, people who saw the smaller display were ten times likelier to buy jam than the people who saw the larger display.³

In personal finance, the number of choices and complexity of each underlying option makes it difficult to get started. The purpose of this book is to give you a clear starting point, focus only on the most important decisions to make, and create a saving system that quietly nudges your finances in the right direction without regular effort on your part.

A second problem people face with personal finance is a lack of clear-cut rules for financial success. Financial success, and the path to achieving it, is different for everyone. There isn't a perfect fix for this issue, but this book aims to provide tools that apply to everyone and form a framework for thinking about decisions that are more personal.

A third problem is that the human brain isn't hardwired to make optimal money decisions. Our cognitive and emotional biases create tremendous barriers to financial success. I've included lots of examples and discussions around these biases to help you become more aware of the mental errors we make, and I've also provided strategies to combat them.

Finally, and perhaps most importantly, people get discouraged by the speed of their progress. When you make good financial decisions, it takes time to see the impact. Much like physical exercise, you won't have a six-pack after a single trip to the gym. But unlike exercise, which requires constant action over a long period of time, improving a single area of your personal finances takes only 30 minutes and the benefits can last a lifetime. You just need to allow them time to work.

THE GUIDANCE YOU NEED FOR THE FINANCIAL SUCCESS YOU WANT

The financial industry doesn't always have your best interests at heart. You may be sold different products and solutions based on the person sitting across the table. More and more people are promising to act as fiduciaries—the fiduciary standard requires that an advisor put the client's interest first—but they aren't being policed the way they should be.⁴ I've worked as a fiduciary my entire career. The information in this book is derived from the same advice I give to clients at Plancorp and BrightPlan. The tools and resources are the same ones my wife and I use. Now I want to teach you the things that matter most in driving your financial success.

Innovations in the world of finance will continue to shape the way we manage our financial lives, but good financial advice will never change. If you read this book from start to finish, you will have a game plan for setting and reaching your life goals with minimal ongoing effort. But before we do any of that, your journey starts with learning how to leverage the most powerful tool at your disposal: time.