One day I plan to write a book. I already know the title of my book – “They Still Teach Our Kids Who Slept With Pocahontas”.

Are you shocked by my proposed title? You should be outraged. I am.

Why? Every year, beginning with first grade, until we graduate from high school, schools teach our kids American History, often touching on subjects related to Christopher Columbus, the Pilgrims, Captain John Smith and Pocahontas.

Now please try not to misunderstand me. I do not mean to be disrespectful to Chris, John and Pocahontas. They are great historical characters, and we can learn a lot by studying history. My point is we should be balancing our history lessons with lessons in finance.

My book will address basic life skills that lead to financial independence. Sadly, these financial independence life skills are seldom, if ever, taught to our kids. I believe it is our duty to correct this shortcoming and arm our kids with skills that will lead them to financial independence.

A critical lesson to gaining financial independence is to grasp the power of the concept of the time value of money and then take action to reap the benefits of this life-changing concept.

The concept is very simple. Any school-aged child can get this concept. I think most adults can too! Let’s begin.

“Where did I learn about the time value of money?” you might ask.

I have a degree in political science from the University of Maryland. I also have a master’s degree in business administration from Boston University. Surely you might think that I learned about this critical life skill from my college pursuits. Wrong! I can’t recall one instance of the discussion of the time value of money in school.

Well then, where did I learn about? Believe or not, it came from an enlisted Sergeant Major in the United States Army. Of all places, that’s where I discovered it – when I was a sergeant in the good old Army. How was I enlightened?

One day, I attended a muster. If you haven’t been in the Army, then you might not understand musters. Basically, a muster is a must attend meeting. If a soldier fails to attend, the soldier is subject to disciplinary action. The main subject matter at that particular muster was the time value of money. I remember the meeting like it was yesterday. What the Sergeant Major did that day made the biggest impact on me in the five years of my service to my country.

The muster occurred in the early 1980’s, perhaps 1981 or 1982. I am not exactly sure. I do remember the overhead projector and the view foils. That was the preferred presentation to a large group in those days. The personal computer was not yet available to the masses.

Here’s what he said. At the age of 22, the best asset one usually has is time. As one gets older, the value of this asset begins to rapidly diminish. Suppose your recent college graduate daughter (Anne), 22 years of age and armed with her new diploma, gets a job as a teacher. Immediately, Anne decides to set aside a little bit of money into a tax-deferred saving plan, say $48 per week (that’s $2,500 per year). She invests in a mutual fund and realizes 12% return annually. She does this every year, until she is 65 years old.

When she is 65, how much money will be in her account? $3,029,531. Wow!

The Sergeant Major continued with the lesson.

Suppose Anne faithfully puts $2,500 into the account each year until her 30th birthday, and never puts another nickel into the account after she reaches 30. Her twin brother Nathan has a great time and spends every penny he earns during his 20’s, saving nothing. On his 30th birthday, Nathan wakes up and begins to save $2,500 each year until he is 65. Anne and Nathan get the same rate of return in their tax-deferred account – 12%. Anne has put $20,000 into her account and Nathan has put $90,000 into his account.

Who has more money in their account at age 65? Anne’s account balance is $1,818,374. Nathan has $1,211,158 in his account. That is the power of the time value of money!

To drive this point home, the Sergeant Major continued. He posed the question, “What opportunity loss did Nathan suffer by not putting $2,500 into his account when he was 22 years old?” In the above example, Nathan’s failure to invest $2,500 at 22 cost him $326,825 by the time he was 65. Who can afford to make a $326,825 dollar mistake? I sure would hate to do that? Wouldn’t you hate that too?

Now for the most impressive and memorable part of the Sergeant Major’s presentation.

The Sergeant Major showed us one foil that I will never forget. The Sergeant Major, a soldier for 28 years, showed us an actual account statement from an investor in the Fidelity Magellan mutual fund. The balance in the account was well over $1,000,000. It was clear that the account holder had reached financial freedom. The Sergeant Major went on to say that the investor, beginning in the very early 1960’s, had patiently and with great discipline, put into the account at least $50 a month, sometimes more when the investor could afford to do so.

Then the stunner, the most effective lesson of my military career – the Sergeant Major showed us the name on the account – Sergeant Major McKenna, our battalion Sergeant Major! Sergeant Major – thank you for what you did that day! That was true leadership!

Now folks, I encourage you to take action and call your professional financial planner today. Good Luck!