Last month, 48% of Americans made new year’s resolutions. For University of New Hampshire (UNH) students those resolutions usually pertain to our school, health or finances. These goals, especially fiscal in nature, can be difficult for college students to digest. However, UNH alumnus Sean Dempsey’s new book “Financial Cheat Codes: How to Win the Game of Finance,” released on Jan.1, is a solid jumping off point. Dempsey graduated from UNH with a Masters of Business Administration (MBA) in 2011. In “Financial Cheat Codes,” he explains life-long strategies to achieve financial freedom as if they were video game cheat codes.
“Financial Cheat Codes” contains important financial advice for any reader, but it is especially helpful for beginners. The content benefits from Dempsey’s seamless integration of multiple other financial books and ideas, compiling them all into one easily digestible book that covers a wide array of ideas and gives readers a place to start. One such idea Dempsey writes about is Nelson Nash’s Infinite Banking Concept (IBC). Dempsey stated he uses the IBC to achieve financial freedom and that this book is a guide for others who want to do the same.
A cartoon video game character traverses through each chapter of the book, as if they were unlocking a new level of a video game for each new concept learned. The illustrations help to maintain a reader’s concentration, as they trick the brain into thinking the financial concepts discussed and jargon used are not as intimidating as they seem.
I interviewed Dempsey about the video games that inspired “Financial Cheat Codes” and the advice he has for UNH students interested in embarking on their quest to financial freedom:
Q: Your book is set up as a video game and uses the “Mario 3” Warp Whistles as an analogy for the financial cheat codes you give your readers. Was “Mario 3” your favorite video game overall?
A: Mario 3 was probably the one that had the most lasting memory for me. I played it growing up probably from age eight all the way through my teen years. I wanted to have an analogy that people would understand and get, because finances and investing is an area that people find very daunting, challenging, sometimes even frightening. So by putting an interesting face to it, I thought it would make it more approachable. And hopefully, I accomplished that. I wanted anyone to be able to pick up a book like this, whether you’re 19 or you’re 90 and be able to still get something out of it. I think the artwork that I have in there does lend itself to maybe a slightly younger audience, which is fine, but the idea is that financial concepts are things that you need to start young. I didn’t want a boring book that you felt like, ‘Oh, that’s not for me. That’s for someone more mature than I, more interested, more invested in these concepts than I.’ I wanted to have a cover that was essentially saying ‘this is for anyone.’
Q: What made you think of viewing these financial strategies as “cheat codes” and setting this book up as a video game guide?
A: What I wanted to do was think of an analogy that would help explain that it’s a poor man’s game to go through life the prescribed way. Everyone and your mother is going to tell you, ‘Do this, then this, then this. Put your money in a 401k, work a nine to five, trade your time for money. This is the way you play the game, young man.’ I wanted to say, ‘No, you actually can get further ahead by learning these cheat codes, these mysteries of the game.’ So that’s where the analogy of these warp whistles came from. I could have used any video game, frankly, but I chose the one that I loved the most.
Q: Each chapter ended with financial quotes that tied back to what was discussed in the chapter. What made you decide to include those? Which of the quotes is your personal favorite?
A: I wanted to include quotes from people I respected and that were reinforcing the concepts of each chapter, because A, I feel like they were valuable, and they were additive, as opposed to reductive, and, B, I didn’t want people to feel like they’re just listening to me, that this is me pontificating on these topics. There are very smart men and women who have come before me and I wanted to show that these concepts are universally adopted by others, many times smarter than I am. In terms of which one was my favorite, I can’t say. I really think every quote was appropriate for the chapter it was in, but I don’t think I have a favorite, per se.
Q: In your introduction, you list fifteen books that people striving for financial freedom should read. Which of those books has helped you the most in your journey?
A: I tried to list them in order of where I felt they changed my life, and I don’t say that lightly. Every book in that list, certainly the top 10, changed my life forever. The biggest one that was the greatest wake up call for me was “Rich Dad, Poor Dad,” by Robert Kiyosaki. He taught me that you don’t need to trade time for money. So, as an old man talking to a young whippersnapper here, I will say, you’re gonna be told by a lot of people in your life, many of which you trust and respect, that ‘after you graduate college, you need to go and get a job, young woman, and you need to work for for your money and you need to put that money in a 401k.’ I did that for about 10, 11 years, and it was a very colorless life. People, especially those that take desk jobs or are in cubicles, take a lot of the flair away from the zest of life. If you are trading your time for money, you’re making a deal with the devil. I don’t believe in that— Robert Kiyosaki doesn’t believe in that—so he taught me that you don’t need to trade time for money. You can follow an alternative path that allows you to make more money, is more conservative, and gives you a lot more freedom and peace of mind.
Q: This is more of a hypothetical question, but in chapter one, you tell your readers to “shirk normal” and be an outlier from the bell curve. If everyone were able to do that, how would that affect the world around us? Wouldn’t that just create a new bell curve? How would you deal with that?
A: Actually, I was thinking about that point while I was writing the book. I think I even had a couple paragraphs on that topic, but I wound up cutting them because they were an additive. The short answer to that question is that, mathematically, not everyone can be an outlier. The problem is that not enough people are even considering alternative approaches. They’re so ingrained into doing things the prescribed way. You go, A, then B, then C, then D. We have the opposite problem. Everyone is falling into this bell curve and there are very few people working as outliers. If I magically snap my fingers, this book becomes an international bestseller, everyone starts following the advice, that’s a great problem to have. Frankly, I don’t know what that does to an economy, because you’re right, we do need people to work. We need folks going through their lives and helping to service the community, but that doesn’t need to be everyone’s future. It’s a great question and I don’t know if I answered it to the best of my abilities. I think you’re right, it’s something I’ve struggled with when talking about my book with others, not everyone can follow my advice. Frankly, I think it takes certain character traits in a person to go off and be abnormal. It’s not going to be for everybody.
Q: In chapter three, you discuss getting out of debt and using Dave Ramsey’s first 3 steps to do so, but warn against following that plan afterwards. How do you deal with having different ideas and opinions from other people giving financial advice?
A: That was an interesting one, because if you study the books that I mention in the intro—and in fact several people have pointed this out to me—the book “Total Money Makeover,” by Dave Ramsey is almost a counterpoint to many other books on the list, like “Rich Dad, Poor Dad.” Dave Ramsey really hates debt, and he talks about things like having a home without a mortgage, cutting up your credit cards, not ever going into debt, ‘you’re a slave if you’re in debt.’ Whereas Robert Kiyasaki, “Rich Dad, Poor Dad,” he talks about things like good debt and bad debt, which I also talk about. In many ways, those perspectives are at odds, but I didn’t want to throw the baby out with the bath water. I think the concepts that Dave gets right are really, really solid, and need to be embraced, like budgeting, saving your money, and stacking your pennies. Even though in his entire framework, he has a lot of things that I think are wrong, I think the things that he gets right need to be emphasized. Let me put it this way: In any book that you read, whether mine or anyone else’s, you need to think critically. You can’t just spoon feed yourself on everything, even with a writer that you like. You cannot just say they’re 100% right or they’re 100% wrong. That’s too black and white for me. I think that you need to be critically assessing someone’s perspectives, and cherry pick the things that you believe are aligned with your values and your ability to execute, and dismiss the ones that aren’t good.
Q: Also in chapter three, you advise getting an Emergency Fund equaling 3 to 6 months worth of living expenses. This can take quite a bit of time. What is the timeline you had in mind for getting out of debt and saving that money discussed in that chapter?
A: “It can take up to a year or two to do that, and that’s straight from Dave Ramsey, that you want to have 3 to 6 months of living expenses saved in an emergency fund. Again, most of these concepts are not my original ideas. They’re taken from people I feel are much smarter than me, and I’m borrowing them and just consolidating them into one source. The short answer is one to two years to do that, maybe longer, if you fall back on hard times and you need to dip into that fund. The more you dip into it, the longer it’s gonna take to build up.”
Q: Nelson Nash’s IBC is the most important aspect discussed in your book. How did you first learn of this concept?
A: A friend of mine, his name is Tim Boyle, introduced me to this concept, I want to say 15 years ago. He came over to my house around 5 o’clock to talk about it, and we didn’t stop talking about IBC until I looked down at my watch and it was 4 o’clock in the morning. I wind up reading the book, rereading it. I read it a third time in the span of one week. It’s a very short book, but it was one of the most groundbreaking concepts I’d ever heard. One of the ways that allowed me to step away from the 9 to 5 rat race is by employing the strategies of IBC.
Q: The Whole Life Insurance policy is also very important to your plan. Given the benefits that come with it, is it more difficult to receive than a regular life insurance policy?
A: Whole life is a pivotal component of infinite banking, IBC. Hopefully, I did a somewhat decent job trying to explain the difference in the book. Whole life is essentially buying an insurance policy on your entire life, as the name implies, right? Versus getting a typical policy called a term policy, where you’re getting it for a finite amount of time, say, 20 years or 30 years. If you do it for 20 or 30 years, though, you don’t build equity in policy. It’s a different product for different means, but I’d be lying if I said I didn’t think one was better than the other, I’m obviously a big advocate of Whole Life. But I also would say if you are near the winter years of your life, you’re in your 70s, 80s, 90s, it can be very cost prohibitive to get whole life insurance. Whereas, if you’re a young 18 year old, it [life insurance] can be extremely cheap, and the best thing you can do is buy yourself a policy now while you’re young…and you’ll be able to have it your whole life and build equity in it. So I think it’s much better. There are many benefits, like I said; you build equity in the policy, so you can borrow against it, you can have it as a safety net, which is what I do, or you can use it for investments. It will never break what’s called the compound interest curve, so you can borrow against it and still your money stays in the policy. Again, I don’t want to litigate the entire book. I have a whole chapter on this, but I’m a big fan of whole life. I think the benefits are incredible. Not to mention the tax advantages…The best thing you can do for yourself, even if you ignore the rest of this interview, is buy yourself a very inexpensive whole life policy while you’re young. You’ll be thanking yourself 20, 30 years from now, it is the best thing you’ll ever do. I wish I had bought more policies when I was younger, I didn’t start buying these things until my late 20s. You should try to ferret away as much money as you can now, when you’re young, so you can have it for investing when you’re older. With that, then, do whatever it is that you’re passionate about, and do it with 110% of your ability. Try to shirk normal and get out of a 9 to 5 to do what your heart actually wants you to do. We weren’t put on Earth to live in cubicles. We were put on Earth to experience the passions of life, and experience the time with friends and family. Give back to others, help your community. These things you can’t do when you’re avoiding the sunlight in a dark cubicle.
Q: In chapter 11, you urge people to “be a college opt-out.” How do you balance saying that when you yourself have a Bachelor’s degree and an MBA? Do you regret those degrees?
A: No, I don’t regret those degrees, and let me clarify this. This is probably my most controversial subject in the book, so let me be very clear about what I mean by this…I don’t want to insult anyone by saying they made a bad decision. What I am against is not college as an institution, or college as a decision. I’m against college as a knee jerk reaction to, ‘I don’t know what to do with my life… I guess I’ll go to college.’ I think individuals that are not deliberate about their decisions, if they just see college as, ‘I need to figure out who I am, and learn who I want to be,’ and maybe they’re taking loans and don’t recognize the dangers of taking a huge amount of debt early on in their life. It’s dangerous because, unless they or their parents are independently wealthy, they’re most likely leaving college with what would be a mortgage around their neck. So, if you graduate college, with $100, $120, sometimes $150,000 worth of debt, and you find yourself, frankly, no further along that you hadn’t gone to college, it didn’t help you in your career choices, that’s very, very dangerous. Frankly, I’ve seen that happen with many good friends and family members who went to college and didn’t do something with their degree. So be deliberate, that’s my takeaway. Be very deliberate.
Q: In the back of the book, you have a section showing your own investments, including the monetary amounts. Were you hesitant putting personal information out there like that?
A: I was. In fact, my editor almost made me cut it. I felt it was incredibly important to keep there. It was one of the decisions I fought for the hardest, though. Because one, I don’t know any other book—I’ve read a lot, hundreds of financial books—I have never seen anyone else do that. I thought it was unique. And two, I wanted to demonstrate that embarking on your financial journey is not all peaches and roses. I wanted to show my successes and my failures together. They’re not all grand slams. I have a lot of singles and doubles in there, some triples. I have one or two home runs. But I also demonstrate that I’ve struck out. I’ve gotten really burned by investment decisions and I explained why many times I didn’t follow my own advice, and that’s why I got burned. I wanted to demonstrate through very specific and vivid examples that investing is not a cakewalk, it’s not for the timid or the meek, it requires diligence, and you can get burned. So I wanted to put all those concepts in there and be very real with my readers about that. I think honesty is important.
Q: What was the moment you decided to take all of your financial thoughts and put them in a book?
A: I will remember that moment until the day I die. Rewind the clock, let’s say, about 4.5 years. I had started, with that same friend I mentioned earlier, an investment group with him. That meeting that I mentioned, with him and I talking about IBC, turned into trying to meet regularly to talk about a number of financial concepts, and we both then started inviting friends. What started as just two of us drinking whiskey in my basement until all hours of the night turned into an actual established investment club that now has about 109 members. About two years ago, we had about 30 people in my basement and someone who was new to the group said, ‘Sean, I’m new to this. What book should I start reading? You guys are talking a mile a minute, and I’m really excited. How do I get started? Do you recommend a book that I can read to get started?’ And I said, ‘A book? No, but here’s this book, and that book, and this book,’ those 15 that are in the introduction. Then Tim would list some, and I’d list some, and it was like a deer in headlights. He looks right back at me and he goes—this is what I’ll remember till the day I die—he goes, ‘Sean, I love you, man, but hell no. I’m not gonna sit, go home and read 15 effing books. What’s one book that you think I should start with, tonight?’ I couldn’t give him an answer. I felt like a jackass, but I said, ‘There is no one book.’ That was a real wake-up call for me. As someone who’s had my life changed by a number of these books, I wanted to see a single book that contained all of the concepts that changed my life. I said, ‘Well, it doesn’t exist. I’m going to write it.’ This was the culmination of about two years of work, but I think it turned out really good, and I’m really proud of it.
Q: Any final words to the readers?
A: I guess I’ll close by saying I advise everyone who is reading this article, if you got to the end, your next step is so important. Your next step should be to start. It’s like going to the gym. You’re not gonna go in there and start bench pressing 400 pounds. Start by just walking into the gym, making that initial push to challenge yourself. Pick up a five pound dumbbell. Just start somewhere. An investment future is the same way. You do not need a lot of money or knowledge to get started. You can start with reading this book, or even just a handful chapters, and then go and be deliberate and do something. If you don’t ever start, you’ll never finish.
“Financial Cheat Codes: How to Win the Game of Finance” can be purchased here.