Heather J.

Bailey
LIFE LESSONS ASSIGNMENT – FIN 1050

Lesson 1 – “If You Want to Change the World”: Our struggles are similar. These lessons apply to all.

• Make Your Bed

One lesson Admiral William H. McRaven shared out of ten was the “Make Your Bed” lesson. If you
make your bed every morning, you will have addressed the first task of the day with a feeling of
accomplishment, leading to the next task and the next accomplishment, and so on. A made bed will not
only start your day out in a successful pattern, but it will give you encouragement at the end of the day,
when you go to lie down in the nice neat bed, that tomorrow will be better.

I selected this lesson because I have heard it before, and I have a few sons who served in the Marine
Corps that also learned this lesson. I believe it to be motivating because I’ve tried it and it definitely
gives you that first feeling of accomplishment for the day, and a certain comfort when you go to bed. It’s
a good lesson to follow.

I think I could use this as a motivator financially. It’s a stretch, but if I take the advice as Admiral
McRaven intended, the first accomplishment leads to another and another for the day. This is goal
setting. If I set savings and action goals to better my financial situation each day, I could have a check
list, starting with making my bed. Once you check off that first thing on your checklist, you can’t just
stop, leaving your list unfinished. That first checkmark is important. It gives you that motivational shove
you need.

• Don’t Back Down from the Sharks

The second lesson I chose from the Admiral’s Commencement was “Don’t Back Down from the
Sharks”. He is basically saying not to be afraid. Stand your ground. There are a lot of sharks in the world
you will have to deal with.

I have run into many sharks in my field of work. I’ve always wanted to walk in their shoes. I chose
this lesson because I’ve always wondered where to draw the line where I shouldn’t overstep, and when I
should stand my ground. I’ve been in many instances when a situation wasn’t being handled very
efficiently, and I wanted to put in my two cents. Most of the time I am shut down with phrases like, “It
just wouldn’t work” or “we’ve tried that before”. It is frustrating because I feel like nobody is really
hearing me. I’ve been in my field for a long time and feel like my ideas have merit.

If I really feel like I need to be heard, I don’t back down until I get some sort of acknowledgement,
and either make a change for the better, or get a real answer so I can move on. I think this trait is
sometimes annoying to people, but it also stands out. One day soon, it will help me move up the
leadership ladder into a position where I can make a nice salary. So far, it’s worked for me just fine.

• You Must Be Your Very Best in the Darkest Moments

I thought the Admiral’s Lessons were all very valuable, so I chose one more: “You Must Be Your
Very Best in the Darkest Moments”. Sometimes you have to swim in the dark or disorienting waters. You
must be calm and composed and bring your inner strength to bare.

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 Heather J. Bailey
LIFE LESSONS ASSIGNMENT – FIN 1050

I couldn’t resist this lesson because it sort of hit home for me. This lesson and “Don’t Ever, Ever
Ring the Bell” go hand in hand in my opinion. When you are in your darkest, most deafening, debilitating
moments, if you ring the bell, you’re done. Things could go spiraling downhill quickly. I have a family to
support. I have always had to calmly find my way out of the dark, keeping my composure for my
children. I think that I tell myself everything will work out, but I have to bring forth my will and strength
to make it so. Problems don’t just magically disappear.

Financially, this has already benefitted me. I’ve fought through abusive relationships,
homelessness, and sexual harassment at jobs. I’ve shown my competency and loyalty and willing to
work hard at everything I’ve ever done, even when it got rough, decisions were unclear and not easy, or
I was exhausted and felt people were pushing me down. I always kept moving along until I landed where
I am now. I am going to school, working full time with a company that I like, in a position that doesn’t
feel like the bottom of the totem pole, with a nice benefit package and a 401(k) I’ve been growing for
almost 20 years. I have always put my best foot forward.

I really liked the video. It was motivational, funny, and the speaker was definitely warranted to
speak to life lessons. If I can get any of my children to read his book, I will.

Lesson 2 – Compound Interest

The difference between simple and compound interest is the way it is calculated from the
principal. The given percentage of just the principal over several periods does not add up as fast as the
same percentage take from the principal plus the earned interest. What compound interest does is grow
exponentially, which is why time and compounding are the key elements of saving.

What I learned from using the Compound Interest calculator is that rate of return is a huge key
as well. If my rate of return is just 4% higher, my retirement in 25ish years will be triple the amount it
would be. I also learned that I am better off than I imagined. I’ve never really computed what my 401(k)
should amount to because I wasn’t sure how. Since I started my 401(k) when I was 19 and have an
employer that matches my contributions up to 6% of my income (which I fully take advantage of), I am
well on my way to a good retirement, as long as my rate of return doesn’t drop below 10% too often.
Currently it is 16% which is very exciting.

Whenever I think about compound interest, I wonder how many places I’m NOT receiving that
from. Up until about last year, my employer was matching my 401(k) per pay period. Now they only
match it at the end of the year. I’m not sure if that would affect my rate of return since there’s not more
money month to month, but it shouldn’t affect the way the interest is compounded if it is compounded
annually. There are still a lot of questions I have about compounding. Things like, how do I keep away
from loans or credit cards that compound daily? Is there a cap? It can help me when I’m the person
profiting, but really hurt if I’m borrowing.

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 Heather J. Bailey
LIFE LESSONS ASSIGNMENT – FIN 1050

Lesson 3 – Financial Frauds & Scams

• Charity Scams

A charity scam is a type of scandal where a scammer sets up a fake organization, big or small, which
takes “donations” from the unsuspecting public to line their own pockets instead of contributing to a
named purpose. These scams are particularly active during times of natural disasters or around the
holidays when people are especially charitable. They also prey on sentimental values.

In the Associated Press, AP Regional State Report, (2019), author Fabiola Sanchez wrote a short
article of a charity scam that is more common than anyone would want to think about. A couple was
charged in Pennsylvania last August for theft by deception and receiving stolen property after they faked
the birth and death of a baby and established a GoFundMe account. They obtained over $600 in
donations and gifts from friends and family before it was determined that the picture of the baby was
fake. $600 doesn’t sound like much, but what a disgusting example of scamming the public, let alone
their own family and friends.

Reference:

The Associated Press. (2019). Couple accused of faking baby’s birth, death in charity scam. AP Regional
State Report - Pennsylvania. Associated Press DBA Press Association. Retrieved from
http://search.ebscohost.com.libprox1.slcc.edu:2048/login.aspx?direct=true&db=n5h&AN=APff61feaf30
074f6481f7e0339ed6a63f&site=ehost-live

Falling victim to this type of scam can be somewhat avoided by following a couple of do’s and
don’ts listed in usa.gov. One important thing is not to pay with cash. Typically, your bank or credit
establishment can provide fraud protection and refund you or put a stop on a payment if you’ve paid
with a check or credit card. If you are donating to a charity other than a GoFundMe, you can check it out
with your state consumer protection office or the Better Business Bureau to make sure it’s not fake.

• Ponzi Schemes

A Ponzi scheme is a scam that relies on people to invest their money. New investors’ money is
taken to pay first investors what they think are returns on their investments. More and more new
investors are enticed to come in, and everyone is making what they think are returns, until there is no
more new investment money, and the current investors try to cash out. The entire scheme collapses
because the enterprise they invested in was nonexistent, and there is no money left coming in.

The story of one of the biggest Ponzi Schemes in history is told in a Social Research article, “A Case
Study of a Con Man: …” (2018). It is about Bernie Madoff, who was the founder and sole proprietor of
Barnard L. Madoff Investment Securities. Not only was it the largest documented Ponzi scheme, but it
went global. His investors were unaware that any payments made to them were in reality, someone
else’s money, not a return on their own. Madoff owed investors more than $50 billion across the globe
before the scheme collapsed, and eventually he was sentenced to 150 years in federal prison.

Reference:

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 Heather J. Bailey
LIFE LESSONS ASSIGNMENT – FIN 1050

Henriques, D.B. (2018). A Case Study of a Con Man: Bernie Madoff and the Timeless Lessons of History's
Biggest Ponzi Scheme. Social Research: An International Quarterly 85(4), 745-
766. https://www.muse.jhu.edu/article/716113.

To protect yourself against a Ponzi Scheme, per usa.gov, be wary of any investment that
regularly pays positive returns, regardless of what the overall market is doing. Avoid investments if you
can’t get complete information about them. Be alert to account statement errors. And be suspicious if
you don’t receive a payment or have difficulty cashing out. Don’t put your money in investments that
promise big returns with little to no risk. Don’t contribute to any investment that isn’t registered with
the SEC or with state regulators. And Don’t get financially involved with any unlicensed investment
professional or unregistered firm. And as we’ve been taught throughout this semester, do your
research.

Lesson 4 – Big Hat, No Cattle

I’ve had the pleasure of meeting all sorts of people in my life who are rich, poor, or somewhere
in-between. “Big Hat, No Cattle” refers to someone who appears to be wealthy because of luxurious
belongings and lifestyle, but in reality has little net worth like the character, Teddy, in “The Millionaire
Next Door”. I have a neighbor that I always referred to as someone playing “Keeping up with the
Jones’s” which is just another saying that means the same thing. This neighbor drives a new Nissan
Titan, owns a Jeep Wrangler with a lot of modifications, a small boat, a motorcycle, and a side-by-side.
He is always wearing expensive sports apparel, always buying a different pair of cleats for each sport he
plays, or a new, expensive set of golf clubs or softball bats to impress people. However, whenever I’ve
had conversation with him, he’s swimming in debt. I know that most people don’t live within their
means, but this is extreme.

On the other hand, my mother is more like Tex from the book. She did all the budgeting and
financial management for the household. For as long as I can remember, when I was a little girl, I was
raised as if we were poor. I had a clothing budget that was very small for school clothes only. And was
never allowed to shop for clothes at the mall, only Kmart. I earned a $5 allowance for the week if I did all
my chores. And we never ordered food for dinner, or went out for fast food, or even had any soda or
junk food in the house. Mother always cooked. She was also very strict, not letting me allow anyone eat
our food, so I didn’t invite friends over much. I just thought the budget was super tight because we
didn’t have much money. Now that I’m an adult, I see that my parents were just frugally saving their
money (borderline stingy) and waited for nicer things. They have plenty to live on. I once asked for a
donation to help finance my husband’s new business and received a $10,000 gift from my parents. I
never imagined they had that much stashed that they could just drop.

I can learn a lot from both extremes, from Teddy to Tex. Saving is important. It’s not always
about proving what you are or aren’t worth. And try to live within your means at least. Millionaires next
door are a lot more common than you think. I’ve been saving up to be a millionaire since I was 18 years
old, and I’m not there yet, but plan to have at least that much by the time I retire. It’s a common goal.
However, I will have to make sacrifices to make it happen.

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 Heather J. Bailey
LIFE LESSONS ASSIGNMENT – FIN 1050

Lesson 5 – Find the Obstacle & Clear it

As I watched the TED Talk video by Russell Redenbaugh, a few things stuck out to me. Mr.
Redenbaugh’s speech was about the difficulties he faced in life after becoming blind and disabled at the
age of 16. My first thought was how terrible to have been completely normal one day, and at such a ripe
age to lose what must have felt like everything in an instant for making one bad decision. But what he
still had was his mind. When he got the news that he would never see again, he wasn’t devastated, but
relieved that he could finally start his new mission in life. He used the end of one chapter in his life to
start a new one. The other thing that stuck out to me was how his father would read to him motivating
stories and poems. Mr. Redenbaugh took the motivation and didn’t give up. He wanted a skill, how to
make money, and persued it.

My husband Chris also has an inspirational story. During his previous marriage, he had four
children, all about a year apart. He and his ex knew there was something not right with the oldest,
Brandon. When Brandon was a little over two years old and still not walking or using his right arm, when
the other children started to walk before him, they took him to countless Dr’s to try and find answers.
Eventually he was diagnosed with Cerebral Palsy. The Dr’s said he would always be wheelchair-bound
and would probably never talk. Chris refused to treat Brandon any differently than the other three kids.
He never gave up trying to teach him to walk and talk, and he put him in school just like any normal kid.
Around the time the kids were 4,5,6 and 7 years old, the marriage ended, and Chris took full custody. He
was a single father of four. Unable to afford daycare for four children, he tried to seek assistance from
the state and was refused. So, in order to take care of his four children and be able to keep a roof over
their heads, he went into business for himself so he could work from home. This was a huge obstacle for
him, but he stuck it out. Brandon learned to do everything any other kid could do; communicate, walk,
run, ride a bike, draw, play video games, etc. I met Chris when Brandon was just 11 years old, with an
amazing outlook on life. I’ve also had the pleasure of watching Brandon go on to graduate high school
and go to the School of Art. Both Chris and Brandon are inspirational to me.

Near the end of the Ted talk, Mr. Redenbaugh spoke of having courage. This is something that I
struggle with. I have always kept my head barely above water and have always been afraid to take risks
and lose everything. But deep down, I know I would have the support of my loved ones to help me pick
up the pieces if that were to happen. My husband is my rock, and I can’t think of anyone with more
courage. Now I just need to overcome the fear of change so I can move up in the world. My husband has
been a great example that even when things get hard, it is possible to make your own situation better if
you keep moving forward. Just as Russell Redenbaugh emphasizes that it’s possible to be larger than
one’s fears and circumstances. His speech is very inspirational.

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