S2EP28-Penelope Jane Smith-The Secrets of Financial Freedom for Families

Herb: 00:00:19

Today I have the pleasure of introducing Penelope Jane Smith.

Penelope is the premier financial freedom mentor for entrepreneurs and the go to expert for some of the biggest names in the consciousness business industry.

She is an acclaimed international speaker and certified trainer with over 20 years of teaching experience, the author of the Little Book of Prosperity and the creator of Prosperity Coin, the world's first cryptocurrency designed to support financial freedom for women entrepreneurs. Welcome, Penelope. It is a pleasure to have you here. Thank you for joining us today.

Penelope Jane Smith: 00:00:54

Thank you so much. I'm excited to be here. You know, I'm obviously very passionate about finances. I don't get to talk about the parenting side very much.

So wherever you want to go, I'm up for it.

Kristina: 00:01:04

Excellent. Well, thank you so very much. Yeah, we do like to start with that find that passion question though, right? Why finances? What was it in your past?

Was it a pivotal moment in. Is it because of where you are right now that you love talking about finances?

Penelope Jane Smith: 00:01:18

I think the original spark comes from that. Freedom is one of my highest values. And so I had taken $10,000 of my own money and over four years turned that into over $6 million in real estate.

And my vision was to be financially free and then to teach other people how as well. And so I built up my empire. I was on track to be able to retire by the time I was 31, which was awesome.

And then the real estate market crashed and I lost everything. Like my, that house has just went down like dominoes. I lost my own home to foreclosure. I was masochistic enough to go to the auction on my own home.

Very weird. The electricity got turned off, everything in the fridge went bad. I couldn't afford to get it turned on.

I was ultimately forced to declare bankruptcy. So it was a very, very turn. Just like dark, intense experience that I wouldn't wish on anybody.

And then right around that time when I was losing everything and like scrambling to figure out where I was going to live, just like living in fear that I was going to come home and the locks are going to be changed and my pets trapped inside the house because the house had gone to auction, right? I was like, where do I go?

I got invited to go to this high level mastermind group on Necker island, which is Richard Branson's island in the Caribbean. It was a $50,000 mastermind for six day mastermind. And I had four days to come up with the money.

And of course I didn't have any credit since my credit was trashed.

I didn't have any income, I didn't have any assets, I didn't have anything except I had one thing which was an intuitive hit that I was supposed to be there and I was like really? Self, are you kidding me? Like this, this is what we're supposed to be doing and I made it happen.

And I'm happy to talk about how if you want but the, the important thing is I did and I don't think that I would be here today if I hadn't because it really changed the whole course of my life and business. The facilitator that group had announced publicly that he wanted to win a Nobel prize for single handedly turning the economy around.

And I was like what you can do that? Like that was just such a huge like mindset shift, you know.

And so though I was on this billionaires private island sitting with this question of like what could I do to single handedly turn the global economy around. And so everybody was down in the main house for this like casino night. And I was sitting up at the Crow's Nest which is the top of the island.

It's night, like warm Caribbean breeze in my hair. I'm just like sitting with this question and Christina, I got the download. The download. Can I share what I came up with?

Kristina: 00:03:54

Sure, go for it.

Penelope Jane Smith: 00:03:56

So what I noticed was that everybody has their own personal economy and that may or may not have anything to do with the economy at large. So my personal economy was in the tank but there were other people on Necker island who were having their best year in business ever and doing great.

Their personal economy was awesome.

And so I thought, you know, if I could support enough individual entrepreneurs since we're the ones that create jobs and opportunities, if I could support enough individual entrepreneurs in shifting their own personal economy to one of abundance, then eventually that would shift the economy of the the region and the nation and the world. And I'm like okay, let's do it.

So I started like really focusing on supporting other entrepreneurs with their finances because that's something I'm really good at. And I started making micro loans to women entrepreneurs in Asia, South America, Africa because I wanted to have a global impact right away.

And as happily as a byproduct now my life is pretty awesome.

So I've gone from millions of dollars in debt, going bankrupt, losing my home to multimillionaire financially free getting to run my passion business and do fun things like this like talk to you. I have two young kids myself. I get to you know, work like 25, 30 hours a week, so I have plenty of time to be with them. It's pretty amazing.

And so that's why I'm so passionate about it, is because that freedom is what I want for everybody.

And I also want to help people avoid some of the terrible and painful mistakes that I've made so that they don't have to go bankrupt or lose their house or, you know, any of that, because I wouldn't wish that on anybody.

Kristina: 00:05:30

And that is one of the biggest reasons I asked you to come today, because we've had other financial experts and things on and talking about finances and things like that. But I loved your energy and I love the way that you were talking at an event I was with you at. And then I was like, you know what?

Let's get her perspective on how can families really make their financial freedom a possibility. Right. And especially when we're talking about young kids, because your two are younger.

And then if for some reason you have a special needs kid, maybe something needs to be set up a little bit differently for them. So let her jump in here and then we'll get a real question for you.

Herb: 00:06:04

Yeah, yeah. Because before, before you go, I might be a little quiet here because you keep hitting me in my fields because I was an entrepreneur.

I had built several businesses. I exited most of them basically kind of successfully, but they weren't for me and I'd been hurting myself. And so I.

I exited badly, but profitably from a bunch of businesses.

And then I found one that was working for me, built it up, was just about to take off, and then I had a snowboarding accident and I hurt my head, suffered a traumatic brain injury, but it was the last of a series of traumatic brain injuries I found out later. And, yeah, I went through the business disillusion. I didn't end up losing my house or my wife, thank goodness, because.

But it's like we pretty much lost everything else and we trimmed everything. And so in the bankruptcy happened and all of that. So again, I'm kind of in my feels here.

And the recovery part of this makes it really difficult because what I built, it's like, because of how I hurt myself, I. I don't seem to be able to do that again. And it's not so much a motivation thing, it's not so much a I know thing. It's like, I know. I know.

And even though I know, it's like it still doesn't happen. So I. I might end up being quiet for parts of this because I keep getting stuck in my feels through all of that.

And so I know your story and, and the fact that you've, like, stepped out of that. Wow, congratulations. And I can't wait to hear more.

Penelope Jane Smith: 00:07:40

That's just real, right? Like, for those of us who have hit challenges.

And I, I've worked with people who went bankrupt or also lost everything in the crash or had some kind of health thing or a divorce thing or like, stuff happens in life. And this is part of why I'm so passionate about creating financial freedom.

It's like, what if you don't want to work forever or what if you can't, right? Like, you were just fine and then. And then you couldn't do that anymore.

You know, my grandma ran a gem and crystal shop and that was fine until she was hit by an SUV crossing the street. Now she's like, in the ICU fighting for her life. She can't go, like, sell crystals, you know.

So when you have the financial freedom, when your assets, your passive income that's taking care of all the bills and your lifestyle, then you have this, like, people peace of mind.

Because, sure, you, you can go work and create value in the world and pursue your passions, but you don't have this, like, this stress of, like, I have to go generate money to pay the mortgage and the rent and the bills and the food and support the family and all of those things. So it allows you to like, really design your life from a place of freedom and joy and what's aligned versus, you know, debt and obligation.

And I need to do this because the bills are due and, and all of that. And so thank.

Thank you for sharing that herb, because it's really, it's really powerful and the way I look at it, for me, because I feel, I feel the same way in a lot of ways that I don't have the same capacity or capabilities that I had maybe when I was younger.

So, like, I'm the kind of person who, if I'm really excited about a project, like, I could stay up till 2 or 3 in the morning working on it, whether it's like creating a handmade book or designing a class or planning a YouTube video or, like, if there's something, like, I love creative projects and so I can be all up in it. But you know what? I now have like, a natural boundary called children. And I can't do that anymore.

Like, I physically cannot, because even if I stayed up late, I have a human alarm clock that's going to get me up at 6 or 7 and need things. And so, like, I I physically can't do some of the things I used to do.

And the way I look at it is like, okay, well, this is the universe supporting me and working smarter, not harder. Right. So now I get to learn to lead with my energy, and it's about who I'm being, not what I'm doing.

And how can I rally a team around me and create systems and, like, what's the highest and best use of my time? What's the highest leverage project?

You know, I see people who have been in business maybe less time than me, and they've been able to create more success, or people who are acquiring businesses and selling businesses. I make. There's like, there's people doing billions of dollars. Right. And here I am happy in my little millions, and what's the difference?

We all have the same time in the day.

So it, like, it helps me think about how do I want to approach this, you know, from a being place and from a smart place and from a systems place instead of trying to, like, work and muscle through it. And I think so many of us have been trained, like, you got to work hard. Have you ever heard.

Kristina: 00:10:48

Have you ever heard.

Penelope Jane Smith: 00:10:48

Have you ever heard hard work always pays off?

Herb: 00:10:51

No, it doesn't.

Kristina: 00:10:53

It doesn't.

Penelope Jane Smith: 00:10:54

All you have to do is be alive to know that that's not true.

Herb: 00:10:59

Anybody who's ever been in corporate America knows that.

Penelope Jane Smith: 00:11:02

Yeah. So it's like there's.

I think it's like the leftovers of the Puritan work ethic stuff where, like, we've been programmed that, like, we have to be super busy and we have to be working our butts off to, like, be valuable as human beings. And that's just not true. Right. So I think that the.

The call for me and for you is we get to learn to work in a different way that is ultimately healthier and better and more of a model of what we would want for our clients and children.

Herb: 00:11:33

Right.

Kristina: 00:11:33

And speaking of, that's exactly kind of where I wanted to go with this is, you know, as an entrepreneur mom, as someone who's running a business and everything, and you do have these kiddos. What are some of the things that you put in place to help balance that? And I've heard there's been a shift. You don't really balance anymore.

Kind of like work hard here and then take off and do time here or whatever. How do you kind of do all of that?

Penelope Jane Smith: 00:11:52

Yeah, so how I approach it, and actually I posted a video on my YouTube channel, so you can. You can Search Penelope Jane Smith on YouTube if you'd like.

And I did a whole video on how we were budgeting differently for baby number two because I learned so much having our first kid. And I just. I really didn't know what to expect having a kid, being a mom. I was like, I don't know.

And so I actually completely ramped my business down. Like the, the programs that I've been running for over a decade. I was like, yep, we're done.

Clients who had come to a certain point in their program, like, maybe they'd paid for 12 months and I'd only delivered six months. I was like, here's a refund. Like, I just. I shut everything down except.

Except for my email newsletter because I just felt like I was going into this mysterious great beyond, and I just didn't know what it was going to be like and who I was going to be and what I was going to want to do. And. Yeah, you know, so. So going in, I thought maternity leave was going to be this, like, relaxing vacation.

Kristina: 00:12:57

Yeah, we've raised you boys also. We get it right.

Penelope Jane Smith: 00:13:00

I thought it was gonna be. I was gonna have this little baby that was like a sleep most of the time so I could, like, watch movies and get caught up on my scrapbooking.

Yeah, it was not like that. It was torture. Torture. Like here I ended up having to get an emergency C section after laboring for 24 hours.

So I, like, my body's ripped apart and no sleep, and now I'm like, responsible for this newborn. And I was terrified that if I fell asleep, he was going to just stop breathing. And oh my God, it was intense. Intense.

And I thought I had a lot of support. I had a doula that was coming to check on me. My mom came to stay with me for 30 days after the baby was born. So, like, I can do this.

I'm so supported. And no, no, I needed, like, a lot more.

And so as I was like, building my business back up, I got to look at like, well, what do I really want to create now? And what do I really want to do? And, like, how do I design my business and my life for who I am now and how I want it to be?

And so I shifted my business model. I started off by just doing some one on one coaching just to kind of ramp things up again. And then I was like, oh, okay.

Got maxed out on that really quick. And then I'm like, ready for group programs again. And so I started doing group stuff. But I designed it in a Way where all of the delivery was online.

And some of it I could do asynchronously because as you know, with kids, sometimes the babysitter is sick or the school is closed or they, or the kid is sick or they need something. And so it's hard to like, commit to being in a particular place at a particular time when there's always this like unknown factor.

So I, as much as I could, I designed things to be more flexible like that and doing like, less travel, less going to like in person masterminds and things. So part of it was just like redesigning the business to fit motherhood.

And then part of it was realizing that for me, it was worth paying for way more support than I thought I needed. Because, like, if you, if you have a baby, right, like, if you want to do anything, you have to think about, where's the baby?

Like, you want to go to the bathroom, you want to take a shower, you want to eat, huh? Good luck, right?

And so it's like for you to just survive, there needs to be two people because then it's like one person has the baby, baby, and one person is going to the bathroom. Like, you know, so two, two people are required for basic survival. Then let's say you want food. Oh, you want to eat. Okay.

That's like a third person because we have like self care and baby, somebody needs to go to the grocery store, you know, make the food, whatever, like, and then, oh, you want to get some work done.

Well, that's a fourth person because you need somebody like taking care of the house and then taking the care of, taking care of themselves and then you need somebody working. So. So it's like you need at least like four people on the calendar at all times if you're gonna do all those things, right?

Herb: 00:16:01

We had, we had a wind up swinging chair. Okay. They don't make them anymore. They're all like battery operated and they're quiet.

We had this whole crank, crank, crank, crank, crank, crank, crank thing.

Kristina: 00:16:13

We're dating ourselves.

Herb: 00:16:14

And it would go click, click, click, click. And as soon as that thing started clicking, the kids were asleep. And it would run for like 20 minutes.

Give you time to go to the bathroom, give you time to cook a meal, click, click, click.

Penelope Jane Smith: 00:16:29

Sometimes you can find hacks like that, right? But like, thank goodness your kids liked that. But it kind of. You don't know for sure.

So I actually, I put a high chair in the shower so I could have the kid in the shower with me, right? So you kind of like, you Learn some of those things. So going in number two with baby number two, I was like, okay, I need way more support.

Like, embarrassing amounts of support. Embarrassing amounts of support. So I.

I called up this lady who used to be my friend's assistant, and she had come and stayed with me for a while when Gabriel was little to help take care of Gabriel, my first kid. And she had since moved to Illinois.

And I called her and I was like, would you consider maybe moving back to California and living with me and helping me take care of the baby? Would you please consider that? And she actually, thank goodness her daughter was pregnant and was going to be giving birth to her first grandbaby.

They were also living in California, so she's like, actually, yeah, I'd love to go back to California. I was like, yes. Like, I don't know how I would do without her, because Michael slept with her, like, every night from the time we got back to.

From the hospital until, oh, gosh, probably, like, at least the first six months. She had him, like, every night so that I could sleep so I didn't have to shut down my entire business with Michael.

I kind of, like, ramped it down to more of, like, a mental simmer and then kind of slowly ramp things back up bit by bit. And it was, like, just very smooth and easy, and it wasn't the same level. It wasn't torture. I got to, like, really enjoy having my baby.

So I had her for the sleeping, but then I also had people, you know, making food for me and taking Gabriel to and from school. And it's, like I said, like, an embarrassing amount of support, but, like, that's what I needed to be okay, to just be okay.

And fortunately, it's worth it for me to pay, like, insane amounts of money. Like, I. God, Christine, I spend, like, a hundred grand a year on childcare, and I'm like, how is this possible?

But it's like, there's no chance I can work with either one of them here, you know? And fortunately, I can make way more than that when I do have some time to work, and I'm not even full time, like, 25 hours, maybe 30 hours a week.

Work, to me is like my vacation. That's what. That's when I get to just, like, create and rest and have fun, because my kids are very physically demanding.

So those are some things on, like, how I. How I've managed it.

I kind of lost track of the original question, but it was basically, like, approaching balancing the business with the kids, right? So I get a lot of support. And now Gabriel is in school, and Michael has ABA during the day for five hours.

And so, like, that five hours is my main work time. And then I'm bottom line for the kids in the afternoon and evenings and weekends. And then Mondays, I'm.

I don't book appointments unless it's like a massage, because otherwise it's baby business. Baby business, baby business. And there's never any time off. I'm like, wow, I need a day off where I'm not in either world. Right.

So now I don't book appointments on Monday, and I can be in choice about if I go back to bed or work on a creative project or whatever.

Herb: 00:19:51

Yeah. So that is. That is amazing entrepreneur mindset right there. It's like, I need this to be able to do this. So I'll bring in all the assets.

Oh, I'm going to. I want to learn how to do this. Let's jumpstart it. Bring in a bunch of coaches to help me get there right now. Oh, I need this. Bring in more help.

Whatever I need, because that shortens the distance between what I know and what I don't know. And action. And so again, that. That bringing in that, that assistance, like, to shorten that learning curve. That's. That's like.

That's like entrepreneur 101. But so many people. So many people don't get that switch. And they're like, oh, no, I need to save money. I need. Oh, I made a little money here.

I need to hold that back to get. Instead of, like, no investing it. Get. The people go. And so you took that attitude and.

Penelope Jane Smith: 00:20:40

You like, when they think they're saving money. And I thought I was saving money, but it's actually costing money.

Because what I realized, like, people said kids were expensive, and I was like, okay, like, how much can diapers be? You know, most of the stuff. There's. There's. There's things. I mean, you know, some stuff can add up, right? And if there's a medical thing that can.

That could be really expensive. But mostly, like, you can get. You can get a lot of the stuff for cheaper 3 free through consignment sales, gifts.

There's things like, you know, Craigslist. There's the Buy Nothing project. If you've never gone to, like, buy nothing.org so you can get a lot of baby stuff.

I have received and given thousands of dollars in kids stuff through Buy Nothing because it's like this Rockaroo was great when they were little, but I don't need it anymore. Let me give it to another mom and save her the 200 bucks, you know, or whatever. So there's a lot of that stuff you can handle.

So for me, like the most expensive thing was me not working because I am a rainmaker. You know, I'm like In the top 2% of women entrepreneurs in the country and I'm grateful to be there.

So if you have that, if you have the capacity to earn more than what you're paying somebody to watch the kid, then number one, it gives you a break. Like I said, work is my vacation. And.

And then it also allows you to increase your financial well being because you're making more than what you're paying them. So you're ahead.

Kristina: 00:22:02

So let's jump to family finance a little bit here.

And if families are struggling, and you know, unfortunately right now, some families are doing great now the families are really, really struggling right now.

What would be like one key thing that they could either shift or change that might change their trajectory and maybe help them get on a more stable footing.

Penelope Jane Smith: 00:22:22

Yeah. So there's, there's a spectrum of financial experience all the way from financial crisis.

Like not able to pay your bills, facing foreclosure and bankruptcy. You know, like, I've been there.

And then like all the way on the other end of like wealth building and doing your estate planning and like making sure that my kids are provided for and my trust and wills because they are special needs and might they need that and then like everything in between. Right. And so the key to moving, moving along that spectrum from the crisis side to the wealth side is your money systems.

And this is something we go do it deep into at my Financial Freedom 101 online event is like, over those three days, we put all your money systems together so that your business or your job becomes a vehicle for creating wealth and freedom, not just revenue. And then you're back to square one every day. So I would consider checking that event out because then you get all the systems.

If you go to financialfreedomgift.com you can download my Financial Freedom formula ebook for free. It's a quick read, but it can really help start you on your way.

And then you can also, through that, get a scholarship ticket to that event so you don't have to pay the fifteen hundred dollars on my website. So that's the loophole, that's the hack. Go to financial freedomgift.com and go that way and check out the event.

But without doing the whole three days in three minutes, I would say one thing that's really important to look at is cash flow planning. You know, most people don't know how to manage cash flow. I didn't know that was a thing, you know, when I was losing everything and going bankrupt.

And if I had known then what I know now around how to manage cash flow, I might have been able to keep my house. I definitely would have been able to keep the electricity on. That was like a whole lot of drama that didn't need to happen.

But learning how to make a plan for the cash that's flowing in, and maybe there's not enough cash flowing in to cover everything you want to cover, but any cash that is flowing in, you're basically deploying it effectively. Because I think when people are struggling financially, it's either an organization problem or an income problem or maybe a bit of both.

But like the organization, one that's easier to fix really quickly.

So when you start, when you learn how to manage cash flow and you create a cash flow plan, now all of a sudden you're telling your money where to go instead of wondering where it went, and you can feel like you got a raise even without having to earn more money.

I actually, on my YouTube channel, Penelope Jane Smith, I did a whole demo video of how I create my cash flow plan each month in an app called Every Dollar. So, like, I go in and show exactly how I do it in Every Dollar.

So if you want to see how my husband and I do our cash flow plan, you can check out that video.

And if you don't like that app, it's the same basic concepts in whatever app you use or spreadsheet or yellow pad or whatever, but actually being deliberate with your cash flow, that's a big one. And then if you do need to increase your income, then you can see that you're like, okay, so I've. I've planned. I'm being intentional with my money.

And I. I just need to bring in more. I just need to bring in more.

And in that case, which is not strange, because if you think about it, prices have gone up a lot, like in the United States and worldwide. Like, my friends in the uk, they're looking at their electrical bills going like, oh, my God.

You know, and when you have people on fixed income, their retirement, their pensions, their Social Security, like a certain level of investments and eggs are now 20 times as much. And, you know, it's like, it's really hard. Like, a lot of people's income is not keeping pace with the. With the prices.

And so for a lot of People, you do need to bring in some more money. Money. So in that case, I look at money now and money later.

So if you just like really need some money now, then you might be willing to do some things to get short term cash that maybe you don't want to do forever, but like, you're open to it, you know, and then money later is really like, how do you design income streams or invest in income streams or create income streams around your passion and interest and lifestyle that's like totally aligned and wonderful, but might take longer to ramp up. Right. So let's say you wanted to create an online membership program for parents.

I don't know if you have something like that already, but let's say you decided to build that membership out and there's a lot of pieces of it where it doesn't take a ton of your time to deliver. So it's like not 100% passive, but highly leveraged. And you want to build that.

Well, it might take some time to set up all the features and benefits and like get the marketing systems flowing. So that's, that's like money later, like by all means, start, but you might need to do something in the interim to fill in the gap.

And this is where people talk about side hustles. Right. Which I don't like that economy.

Kristina: 00:27:30

Right. You're always doing something.

Penelope Jane Smith: 00:27:31

Yeah, because I'm like, side hustle. Like, I don't need any more hustle in my life. I've got kids. Right.

But I did post another YouTube video on the top 10 side hustles to create extra income that are like the least hustle side hustles that you can do with kids.

Herb: 00:27:47

Right?

Kristina: 00:27:47

Yeah.

Penelope Jane Smith: 00:27:48

Check that video.

Kristina: 00:27:48

I love how when you were talking about your cash flow plan, you didn't use the dreaded B word. It's not a budget is a cash flow plan.

You're trying to get the money moving and flowing instead of worrying about, oh, did I overdo this subject or this section or something like that.

Penelope Jane Smith: 00:28:04

Yeah. I don't love the term budget because a lot of people feel constricted and it also makes them think about, like, what are their expenses?

And I also want people to allocate money to fun and education and savings and investments. So it's not all about expenses.

It's about like, if you imagine that every dollar or euro or yen is like a member of your team and you're like giving each one an assignment, giving them a job, this is one of the ways that you can get your money working for you.

And imagine a team that is like, well deployed and high functioning and getting a lot done versus a team that's just like hanging out by the water cooler wasting time, right? So you want to like, get your money deployed and ultimately your money can work much harder for you than you can work for it.

So that's why I recommend that you start investing now. Now, now, if you're not already doing it. Because the best time to plant a tree was 20 years ago, and the next best time is today.

And same thing with investing, even if it's just 25 bucks, 5 bucks.

Like, get yourself in that prosperity cycle of investing in assets that are ultimately going to give you more income so you can invest in more assets. And this is where life starts getting easier and easier and easier and you start building that investing muscle, building that investor identity.

Like, do you even think of yourself as an investor right now? I invite you to take on that identity.

If not, because, like, as soon as you invest even a dollar, like an investor, somebody who's invests, you just did that. You're an investor, right?

So like owning that and practicing that and training your system that that is safe and okay and even modeling for your kids, like, this is what we do. We always have money going into investments. You know, I have another. Kept talking about my YouTube channel.

I have another video where like, my son Gabriel is in the video with me and I'm showing, I'm demonstrating in real time how I'm teaching him about money.

And I'm having him like actually use physical coins, you know, because at seven or eight years old, I think having that tangible connection to money and being able to count it and touch it and hold it and we have like a Sacajawea dollars and Susan B. Anthony dollars. And like he knows them all.

Herb: 00:30:14

And they call those manipulatives.

Penelope Jane Smith: 00:30:17

Yeah, manipulatives, you know, and he, he went to Montessori preschool. So yeah, that, that totally tracks. And then I also on the parenting side, or you know, on my side.

So Gabriel, Michael, don't even know about this, but they each have a 529 plan that's a. In the US that's the educational savings plan. So we put money in that every month. And then I hired them, my company hired them as child models.

So they now have earned income and it's totally legit.

Like, I use their pictures in my marketing and my webinars and, and I compared like how much I'm paying for that versus like buying images on Shutterstock, which I also do.

So they're getting a reasonable salary and it's all like all the T's are crossed and I's are dotted and now they have active income and what that allows them to do is, is invest in Roth IRAs. Do you know what a Roth IRA is?

Kristina: 00:31:06

Yes, we do. And yeah, it goes in after tax.

Herb: 00:31:10

It comes out. It goes in after tax.

Penelope Jane Smith: 00:31:12

It comes out not, not being exactly so Roth ira.

I feel it's like, like one of the only like true gifts our government has given us in the US and if you're in Canada, it's even better because you have a tfsa, which is even better than a Roth ira. But it is like the easiest, most passive way to become a tax free millionaire.

Because yeah, you pay taxes going in like you said, but it grows tax free and you can take it out tax free. So imagine if somebody started maxing out your Roth IRA when you were born, like 65 years of compound interest.

You know, Michael, by the time he's 65, even if all I do is fund this till he's 18 and nothing else ever happens, he's going to have like $8 million tax free when he's 65.

Kristina: 00:31:53

I think that might help take care of him.

Penelope Jane Smith: 00:31:55

Yeah, that's awesome. Right? And then let's say I'm not able to do that and I die early. That's what life insurance is for. Right.

So life insurance is to like take care of if I'm not able to build that up before they're 18.

So we have term, we have, I have two term life insurance policies so that if something happens to me before the kids are grown, then it's going to pay off the mortgage and you know, put a million dollars into creating that, that golden goose for them.

Kristina: 00:32:26

Yes, exactly. Yeah. And just because we also have a special needs child we know and our child is older, there's special things that you have to do.

So make sure you're looking for and finding out the laws around setting aside money for a special needs child, etc.

They need care from the state or whatever, you know, make sure you're double checking all of that kind of stuff because it's a very interesting world to have things set up and then run into a law or something that kind of changes it.

Penelope Jane Smith: 00:32:54

Yeah, but those are the things you have to think about. And I think so many people are just like living day to day, trying to get by and it's like you're already working hard.

Why not work hard towards something that's going to have your and your family's life be easier rather than just back to square one every day.

Like get your money on your team, get those dollars working for you through the cash flow plan, through investing you, you know, at the end of the day that could, that can really grow. Like if you start putting just $50 a month aside now, like if you 40 years, you'll have put in 24 grand. Yeah, right. But if you could earn a 50.

Herb: 00:35:06

Again, you've been modeling this for your children.

Kristina: 00:35:09

Yep.

Herb: 00:35:09

And if your children start understanding the cash flow and the investments and the assets and liabilities earlier, then they will probably have a much easier time as they go.

Penelope Jane Smith: 00:35:20

And you can also show them how it grows. Right. Because that 24 grand, if you can invest at like 15 on average, that'll turn into $1.5 million.

Herb: 00:35:29

And this information is not being taught in schools right now, not even a little bit. To get any sort of this, you have to actually go to a high end business school to even get the remote.

So right now even like our high school graduates are coming out with like zero, zero money knowledge whatsoever. So you know, get involved, get. This is so important for our children nowadays because again, the schools aren't taking care of this.

So it does fall on the parents shoulders. And if the parents don't know, well, then the parents need to start learning because it is that important.

Penelope Jane Smith: 00:36:03

Yeah. And that's why we created Financial Freedom 101.

So if you think about all the time you spent in school, growing up, all the time you spent on your business, if you're an entrepreneur, you know, business courses and mentors and all of that, like, is it appropriate to invest three days of your life in getting your money systems dialed in so you can become financially secure forever? Like I think so. So sometimes you just need to like take that step back so that everything else is. You pave the way to have everything else be easier.

Kristina: 00:36:32

Exactly, yeah. And you kind of touched on a little bit. So you said you started working with or talked with your son here around 7 or 8. Right.

Did you, how much did you kind of like talk about it or anything ahead of time? Are you just now kind of introducing.

Penelope Jane Smith: 00:36:45

Him to all I think about, like what are, what are age appropriate money lessons? Right.

Because I think about when I was a kid, my dad would give me an allowance and he'd give, I think he'd give me $2 and he'd give my sister $1 because she was younger than me. And we had to do a lot for that. We had to do like all These chores and things. And my mom also.

My parents got divorced when I was 8, and my mom would also give us an allowance, but it was more sporadic and it was more like $20. And so I look at, like, what that created in me in terms of, like, the beliefs and the relationship with money.

And it was like this, like, okay, I have to bust my ass for almost nothing, but then every now and then I'll get a windfall, but I can't rely on it. And it just, like, created this really weird, weird mix of patterns. So I'm thinking of, like, how. So what is it that I want?

What is it that I want my kids to take away from this? I want them to feel that the universe is abundant, right? And that they can create money when they want to.

And they also want to be, like, mindful of it and not be.

I don't know if spoiled's the right word, but it's not like I'm not just going to buy him everything he wants, anytime he wants, because I don't think that's necessarily healthy either. So, like, one of my friends in college is like a trust fund baby, and he just seems kind of like lost and not happy, you know?

So I'm thinking about, like, what's the end goal? Like, what. What kind of adult do I want them to be?

Or what do I want to set them up for as adults and their belief systems and their relationship with money and how can I nurture that in an age appropriate way now?

And so I figured the, for me, the first way or the beginning was to just have them, like, touch it and count it and feel it, and then start being like, oh, I can do stuff to create it, to get it, and then I can use it to get things I want. So that's where I'm at in the financial picture with Gabriel is like, oh, you want that card game? Awesome.

Let's look on Amazon and see how much it is. Oh, it's $11. Okay, great. Let's take out your pouch and count your money and see if you have $11. And, oh, you need 50 more cents.

Okay, well, what can we do to get 50 more cents? Maybe you could eat some yogurt or, like, right now. I'll give him challenges, but maybe, maybe there'll be, like, jobs.

Like, he really loves YouTube, so I'm wondering if I can actually have him start recording and editing his own YouTube videos, because he really likes it.

So I'm going to get him a Chromebook because his teachers already want him to like, practice using the Chromebook and then see like, ooh, and maybe he could even monetize his YouTube channel and use money for that. Maybe he'll become a millionaire. YouTube, like, who knows? Who knows?

But I'm trying, I'm trying to like, follow his passion and like, bring in money lessons based on helping him have what he wants and do what he enjoys and like, maybe stretching him a little. But I also don't say like, oh, you have to try this. I'm mentioning yogurt because it's like the healthiest thing he eats.

So Gabriel has very limited eating. That's part of his autistic thing. He'll eat like yogurt, protein chips and fruit by the foot and that is it.

Other than junk food, like cookies and cakes and candy and Doritos, which I don't consider any of that food. So. So it'll be like, hey, can. So I'm trying to, like, make him a little more flexible so he'll eat white yogurt.

What if I put a drop of blue food coloring in? And now it's different because it's blue, right? So it's like, ooh, will you have five bites of blue yogurt? You could get a quarter for that. But.

But he doesn't have to. It's like, you can if you want to, but you don't have to.

Because I also don't want to have any like, weird stuff about, like, he has to eat stuff he doesn't want to do or. Anyway, that's kind of how I approach it. Like, I'm wanting it to be fun, I'm wanting it to be abundant.

And I'm also wanting him to make these choices. Like, do you want to spend 11 on this game now or do you want to keep saving towards that 28 toy that you liked? Yeah, you know, like having him.

And you can do both, right? Like this abundance mentality of, like, you can have it all. Let's, let's figure out how.

Kristina: 00:41:08

And I love the discussions of being abundant. Right.

And looking forward and having some choices because instead of planting those seeds of, oh, you know, oh, we can't do that because we can't afford that. Or oh, yeah, you know the old saying, money doesn't grow on trees, that kind of thing. You don't want to do those kinds of conversations.

Instead you want those forward looking conversations. Yeah, absolutely.

Penelope Jane Smith: 00:41:29

Yeah, yeah, yeah. So it's like, oh, you want that? How much is it? Oh, how can we get that right? And want it to be creative and fun?

Kristina: 00:41:37

Yeah.

Penelope Jane Smith: 00:41:37

Yeah.

Kristina: 00:41:38

Penelope, I. I so appreciate this conversation. It's gone in some wonderful directions.

I love how we've tied the family in and really thought about financial planning and things like that as well.

Is there anything that didn't talk about today that you were like, oh, you know, I wish I could mention this while I'm on the show with families and kids around.

Penelope Jane Smith: 00:41:56

Yeah. Two things. One is if you're like, man, I wish my mom started funding my IRA when I was zero.

I just want to remind you that you can also parent your own inner child. And so, like, you can give that gift to your children, and you can also give that gift to yourself.

Because, yes, it would have been great if they started investing in zero, but at zero, but at the same time, like, start now. Now, now. Right. Like, give yourself that gift. Parent yourself as well as your kids. So that's one. The other is I saw this quote.

I actually just saw it on Facebook, and I was like, oh, my God. It, like, completely stopped me in my tracks. And it said, do something today that your future self will thank you for.

I was like, oh, yes, that's what it's all about.

And, like, when I think about my past self and everything she's been through to get me here and, like, all the freedom and choice that she's created for me, I'm just like, thank you. Like, if I think about it for a minute, it'll just. I'll just start crying. Yeah.

I also very consciously think about how can I set my future self up for more of what she's going to enjoy. Right.

And so I hope that as a result of this conversation, that if you're listening to this, you'll do one thing today that your future self will thank you for. Whether that's opening up a Roth IRA for you or your kids or start putting, you know, some amount away in an auto transfer or.

Or having to talk with your family about what you want to create, whatever it is, you know, set your future self up for success, starting right now.

Kristina: 00:43:18

Perfect. Thank you so much. Yes.

And all the information will be down the show notes, but just to say it out loud so they can hear it, where do they get a hold of you? How do they find out more about you and maybe join you if they saw or heard something that really inspired them today.

Penelope Jane Smith: 00:43:31

Yeah. Well, we have a ton of great financial education for free on my YouTube channel at Penelope Jane Smith. If you search on YouTube, you can.

And then I would really recommend, as the next best step, that you download my financial Freedom Formula ebook because it'll take you like less than 10 minutes to read, but it'll give you clarity and inspiration on what it'll take for you personally to become financially free. So quick read, but very powerful and worth it.

And then also, when you request that ebook, you'll have the opportunity to attend Financial Freedom 101 on scholarship if you want to.

hat, you may as well save the: 1500

Kristina: 00:44:29

And that again, is all in the show notes. Thank you, Penelope, so much.

Herb: 00:44:33

And I would like to thank you for being here today, for sharing your story. You know, so many people after the crash and burn, they just called it quits and buried their head.

And, and instead you, you took that and you grew strength from that and you rebuilt. And then not only that, you went out and you shared your story. You told of the crash, you told of the rebuild. That is the classic hero's journey.

You went out into the world, you fought your dragon, you got your butt kicked, your rebuild, you conquered the world and then you came back to the community to share the hero's journey. You are a hero for what you were doing, for what you do, and for how you present yourself to the world.

So many people don't do that nowadays, and so you are a true treasure. So thank you for being here today and thank you for just being you.

Penelope Jane Smith: 00:45:23

Thank you.

Kristina: 00:45:25

All right, friends and family, make sure that you are sharing these kinds of podcasts, right?

If you have a family in your life that you know need a little bit of a boost, a little bit more help, a little bit of family development, as we like to call it.

Send them this way and find out about all the different experts, all the wonderful people like Penelope who have come to share their heart, share their tips, share their information and inspiration for you, and help all the families grow to be happy, healthy, and successful. Until next time, Bye bye now.