The Financial Priority Stack: 8 Principles for Building Wealth

Simple rules that compound over a lifetime

Why a "Stack"?

Financial advice can be overwhelming. Should you save? Invest? Pay off debt? Start a business?

The Priority Stack gives you a clear order:

Master the first principle before obsessing over the last.

These 8 rules, in order, form the foundation of lifetime wealth building. Follow them in sequence.

The Stack

1. Spend Less Than You Earn

The foundation of all wealth.

It doesn't matter how much you make if you spend it all (or more). This isn't about deprivation — it's about intentionality.

Income	Problem Spender	Wealth Builder
$30,000/year	Spends $32,000	Spends $25,000, saves $5,000
$100,000/year	Spends $105,000	Spends $70,000, saves $30,000

The gap between income and spending is where wealth comes from.

For athletes: Your income may spike (NIL, signing bonus) and then drop. Living below your means during high-earning years is critical.

Challenge: Track every dollar for one month. Where is it actually going?

2. Pay Yourself First

Automate savings before you can spend it.

The mistake: "I'll save whatever is left at the end of the month." The reality: There's never anything left.

The solution: Treat savings like a bill. It comes out automatically before you see the money.

Traditional Approach	Pay Yourself First
Income → Spending → (Maybe) Savings	Income → Savings → Spending

How to implement:

Set up automatic transfers to savings on payday
Start with 10%, increase 1% every few months
You'll adjust your spending to what's left without thinking about it

For teens: Even if it's $20/week, make it automatic.

3. Understand Compound Interest

Time is the ultimate asset.

Einstein (allegedly) called compound interest the "eighth wonder of the world."

Here's why:

Starting Age	Monthly Contribution	Years	Final Amount (7% return)
15	$100	50 years	$620,000
25	$100	40 years	$262,000
35	$100	30 years	$117,000

Same monthly amount. Starting 10 years earlier more than doubles the result.

The key insight: Compound interest means your money earns money, and then THAT money earns money. It's exponential, not linear.

For teens: This is your superpower. You have decades for compounding to work.

4. Avoid High-Interest Debt

Credit cards can destroy wealth.

Debt Type	Typical Interest Rate	Good or Bad?
Credit cards (carried balance)	20-30%	❌ Wealth destroyer
Payday loans	400%+	❌ Emergency only, avoid
Car loans	5-15%	⚠️ Necessary but minimize
Student loans	5-8%	⚠️ Investment in yourself, be strategic
Mortgage	6-8%	✅ Often wealth-building

The math: If you carry a $5,000 credit card balance at 25% interest, you'll pay $1,250/year in interest — just to stand still.

Rule: If you can't pay your credit card in full every month, you can't afford what you're buying.

For athletes: The temptation to finance a lifestyle you can't sustain is real. Debt amplifies that mistake.

5. Tax-Advantaged Accounts First

Why pay more taxes than required?

The government offers tax breaks for certain savings:

Account	Tax Benefit	Best For
Roth IRA	Tax-free growth forever	Long-term wealth (for earners)
401(k)/403(b)	Pre-tax contributions, tax-deferred growth	Retirement (with employer match)
529 Plan	Tax-free growth for education	College savings
HSA	Triple tax-advantaged	Healthcare (if eligible)

Priority order:

Get any employer 401(k) match (free money)
Max Roth IRA ($7,000/year)
Max 401(k) if you can
Taxable accounts after that

For teens: Roth IRA is your #1 priority if you have earned income. See Roth IRA for Teens →.

6. Diversify Investments

Don't put all eggs in one basket.

Strategy	Risk	Expected Return
All cash	Low	Very low (loses to inflation)
One stock	Very high	Unpredictable
Diversified index funds	Moderate	Historically 7-10%/year

Simple diversification: A total stock market index fund holds thousands of companies automatically.

Why it matters: Any single company can fail. The market as a whole has always recovered over time.

For athletes: Don't invest heavily in businesses related to your sport or your own NIL ventures only. Diversify outside your career.

7. Protect Against Catastrophe

Insurance is for rare but devastating events.

Insurance Type	What It Protects
Health insurance	Medical bills that could bankrupt you
Auto insurance	Car accidents (liability required by law)
Renters/homeowners	Your stuff and liability
Disability	Your income if you can't work
Life (if dependents)	Your family if you die

The principle: You can afford small losses. Insurance is for losses that would devastate you.

For athletes: Consider disability insurance — your income depends on your body.

8. Invest in Yourself

Education and skills compound too.

The highest return investment is often yourself:

Self-Investment	Potential Return
Learning a high-value skill	Lifetime earnings increase
Health (fitness, nutrition)	Longer productive years
Relationships/network	Opportunities, support
Mental health	Capacity to perform

For athletes: Your training IS an investment. But also invest in skills that last beyond your playing career.

The ISP philosophy: The whole curriculum — academics, life skills, financial literacy — is investing in yourself.

The Stack in Action

Here's how a teen might implement the stack:

Priority	Action
1. Spend less than you earn	Track spending, create a simple budget
2. Pay yourself first	Auto-transfer 20% of any income to savings
3. Understand compound interest	Open a high-yield savings account, watch it grow
4. Avoid high-interest debt	Never carry a credit card balance
5. Tax-advantaged first	Open Roth IRA when you have earned income
6. Diversify	Invest in broad index funds
7. Protect against catastrophe	Covered by parents for now, understand importance
8. Invest in yourself	Commit to academics + training + life skills

What ISP Teaches

The Financial Skill Tree is built around this stack:

Stack Priority	ISP Curriculum
1-2	Banking Basics Challenge, budgeting exercises
3	Compound interest visualization, Roth IRA challenge
4	Credit building challenge (proper use, not debt)
5	Roth IRA opening challenge
6	First investment challenge (index funds)
7	Insurance module (health, auto basics)
8	The entire ISP model — academics, training, life skills

The Priority Stack Challenge

ISP students can complete:

Audit — Where are you on each of the 8 priorities?
Action — What's the ONE next step for your lowest-mastered priority?
Teach — Create a "You Teach" explaining one priority to another student

Common Mistakes by Priority

Priority	Common Mistake	Fix
1	Lifestyle creep (spending rises with income)	Budget based on need, not income
2	Saving what's "left over"	Automate first, spend what remains
3	"I'll start investing later"	Start now, even with $50
4	Minimum payments on credit cards	Pay in full or don't charge it
5	Using taxable accounts first	Roth IRA before taxable brokerage
6	Stock picking or timing market	Boring index funds beat most pickers
7	Skipping insurance to save money	One event can wipe out years of saving
8	Only investing in financial assets	Skills and health matter too

FAQ

Q: Do I need to master #1 before working on #3?

A: Not perfectly master, but have a handle on it. If you're spending more than you earn (going into debt), fixing that comes before investing.

Q: What if I can't save 20%?

A: Start with whatever you can — even 5%. The habit matters more than the amount. Increase it over time.

Q: Isn't this too conservative for young people?

A: The principles are timeless. The specific investments (more stocks when young, for example) can be adjusted for age and risk tolerance.

Q: What about crypto/real estate/starting a business?

A: Those can be part of the picture, but usually AFTER the foundation is solid. Don't skip to advanced strategies before basics are covered.