Why Ashton Kutcher Says “Money is a Drug”

Ashton Kutcher Remember to start college, get a credit card, and then spend carelessly. “I assumed that at some point I would be able to afford it,” he says.

That’s because, like most people, he was never taught the basics of financial education, including spending, saving, and managing debt. Because of this, Americans today have an incredible burden of debt: the collective debt of U.S. consumers is $ 14.9 trillion and the average household credit card debt is $ 5,315.

Why Ashton Kutcher Says “Money is a Drug”
Why Ashton Kutcher Says “Money is a Drug”

“The truth is, if I hadn’t been exceptionally lucky, I would probably have been in the same situation as many of these people,” says Kutcher, who of course enjoys a successful acting and investing career.

Partly because of this, he’s been passionate about helping people run their financial lives and why he’s executive producer on the hit show From going broke. The show shows dramatic financial interventions where host Dan Rosensweig, CEO of education technology company Chegg, organizes financial interventions with young people who are heavily in debt and struggling to control them.

  • Read: 11 Super Simple Things You Can Do NOW To Get Out Of Debt

Kutcher and Rosensweig hope that people will look at their relationship to money and then reconsider. “If we can get people to understand, appreciate, and respect their personal finances, America will be in a much better place,” says Rosensweig.

In this conversation, Kutcher and Rosensweig discuss the show, people’s biggest misunderstandings about their money, and how to start taking back control.

Dan Rosensweig, CEO of Chegg. Image: Courtesy Chegg.

Many Americans are not taught a financial education, but how many, in your experience, know that they are not good at managing their finances?

COOKER: The most overwhelming thing we find is that people haven’t learned the fundamentals of financial management from any institution and that frustrates and annoys them. But neither did they learn from their parents. Nobody teaches these simple basic rules of personal financial wellbeing unless they come from a family that already has them. This is the bare reality of why the rich get richer and the poor get poorer. Financial literacy is truly intergenerational. If your parents don’t have financial knowledge, it’s unlikely you will.

At some point everyone thinks they are doing the right thing, the basic premise is, “I know enough not to get into trouble.” But when you’re 18 or younger and people give you these “debt collectors” – they put this plastic debt collector in your hand and suddenly you can buy things that you couldn’t before. So you do this. People accumulate debt over time, assuming that when they have money they will pay it off.

But they don’t realize that until the moment of crisis comes and you are evicted from your home or you can’t pay for bare minimums and feel betrayed by the system you made, you just run into more and more debt.

What did they learn when they began to intervene in people’s financial lives?

ROSENWEIG: We wanted to prevent people from having the opportunity to hold others responsible for their situation. At the end of the day, only one person is responsible for fixing your problem, and that is themselves. You are the CEO of your life and you have no excuses. You have to make difficult decisions, live with and control those decisions.

COOKER: Basically, money is a drug. The nice thing about this show is that anyone who walks in has to say, “I’m broke.” Which means admitting you’ve hit rock bottom. There is a lot of ego associated with wealth and material objects. Getting people to a point where not only are they saying the words “I’m broke” but also being proactive and being able to move on is usually a very emotional experience because people it must let go of your ego and your own identity tied to your money and materialism. It is a very difficult thing.

Ashton, it’s interesting how you phrase the problem: you describe money as a drug and say that people have to admit they have a problem, which sounds a lot like starting a 12-step program. Do you think people need to fundamentally rethink their relationship with money before they can fix their financial lives?

COOKER: Yes, and it’s extremely demanding. People in debt lead a borrowed life and have to pay at some point. In some of these cases, people have taken out Parent PLUS loans so that they are not borrowing for life only; They are their parents’ lives. Getting people to face this reality is a challenge.

The program sets up a mirror and tells them, “I want you to look at yourself.” Then he says, “Would you like me to look different and better, and feel better, and get away from the drug that administers it? Here are some tools that will allow you to do that.”

As you intervened in people’s financial lives, what did you find out about the most important things that you were missing out on? I wonder what others can learn from these people’s experiences.

ROSENWEIG: I want people to understand that they need to have a goal before they raise money for higher education. You need to have a return perspective. If you spend so much time and money on these subjects at this school, can I pay it back, and if so, by when? If this is beyond your imagination, the chances that you will pay for it are much lower. The facts show that 40% of all students with loans fail to pay them or are behind schedule. That’s a huge number.

These are questions that are rarely asked, because this myth is repeated again and again: To get into the middle class, you have to complete a four-year degree. Well, only 50% of all high school students attempt a four year degree and 43% of them drop out. So really, only 25% of the people who go through this system are able to be successful after paying all the money and borrowing all the money.

Then you live a life where you borrow the money but don’t pay it back until after school, but you have other expenses too. If you don’t save money to prepare, after leaving or graduating or dropping out, all of a sudden you will have expenses called housing, transportation, insurance and medical care and no one has told you how much money it all costs, when are you? probably need and how much you should earn.

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So, as Ashton says, nobody taught you how money works. Money can work for you when you invest it and generate more income and wealth. But if you borrow money and don’t pay it back on time or only make the minimum payments, it will cost you money.

One of the characters on the series owed $ 1,900, and by the time they paid the money at the current rate, it would be $ 20,000 for 20 years because they don’t understand how interest is accrued and how the minimum money is paid for they are a nuisance. .

The most important thing to understand is that if you owe money, the same thing that you have in your bank account is not yours, it is theirs. Treat it like it’s other people’s money, not your own.

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