P1 — 12 Money Lessons I Learned Early
Childhood was an analytics playground for me. I was constantly observing…everything. Listening in on adult conversations, watching people’s habits, watching what people said, and seeing how things were done — not only with my parents, but all the adults I interacted with throughout childhood.
I observed many things around me at a relatively young age; I had a heightened sense of awareness, which allowed me to notice what was and what wasn’t working with people’s finances.
The 12 lessons I Learned Early
- If you don’t need it, rethink it.
- Prioritize ruthless financial self-education
- Avoid debt that eats away at your wealth.
- Prioritize communication about money with your partner.
- Set the standard of having multiple income streams.
- Enjoy life, but not above your means.
- Student loans can be avoided by working through school, seeking employer sponsorship, or applying for scholarships and grants.
- Integrating minimalist habits will create more opporunities for you to build wealth.
- Start your kids early. Have them learn the importance of work ethic and earning and managing their own money. Provide the basics and invest in them, but cars, phones, and unnecessary items they can spend their own dimes.
- Don’t follow the masses. Most people will never experience or build wealth because they are focused on living in the moment, don’t save for their future, and don’t want to integrate self-discipline with their money.
- Spend time around people with money. Learn from them. Watch them. Observe. Take what works. Leave what doesn’t.
- Ruthlessly save and invest. By the time you’ve worked for others for at least ten years, have at least 1 million dollars saved.
- Bonus: see below for lesson 13
“One in three Americans (32%) is uncomfortable discussing finances in their relationship, according to new research (Yahoo Finance).”
Lesson 5: Set the standard of having multiple income streams
My parents always managed multiple income sources, which is how they provided my siblings and me with significant opportunities before our departures. Endless extracurricula ractivities, private school, public school, homeschool, international travel, books for years.
They not only have multiple income streams, they got creative when they needed more money.
This invaluable habit taught me the value of not relying on one income source, and when you need more income, get creative.
Don’t shrink.
Does 1 income source work long-term?
Some people get lucky and are able to successfully get by with only one income source.
However, most will deal with an income loss, an economic recession, pandemic, or an unexpected financial hardship that takes its toll on one income source.
My parents not only had their primary jobs but also successfully ran businesses and pursued other income-yielding ventures.
Lesson 2: My Parents Facilitated Financial Education
No one in my family was or is a financial expert.
But we all had the opportunity to learn and educate ourselves about money because my parents had us read personal finance books at the dinner table, introduced us to finance and business gurus, and even brought in a financial advisor into our home to help us set up our ROTH IRAs.
You don’t have to know sh*t about money to teach your kids about money.
If you’re financially ignorant — like many, it’s okay to stay humble and learn about money with your kids so you can model healthier financial behaviors to them, and they can practice these habits early on.
One of my parents’ greatest gifts to me was financial education, which I have carried with me throughout life. Of course, you can’t force your kids to be interested in learning about personal finance, but you can guide them and expose them to proper knowledge to help them succeed financially.
Lesson 13: Give Your Kids A Taste of Financial Knowledge
Everyone has to take responsibility for their financial paths. It’s not parents’ responsibilities to financially support their children or take on the burden of their children’s financial mistakes.
I could’ve taken the financial education I learned during childhood for granted.
I could’ve easily stopped learning about finance at the dinner table but continued reading personal finance books on my own time and dime.
My parents increased my financial options by facilitating education. Though my parents weren’t financial experts, they were big on financial education, which was all I needed to choose a productive financial path.
As parents, all you need to do is introduce your kids to knowledge. Give them a taste of knowledge and see what they do with it.
Take it a step further by modeling healthy financial habits.
How you handle your dollars can set the blueprint for your kids.
They’ll have to decide if they want to implement it, but at least they’ll always know there is a better way to do things.
But even if you model unhealthy financial habits to your kids, they can observe the outcomes of those financial habits and decide for themselves if they want those same outcomes or different ones from alternate paths.
Everyone is responsible for their financial outcome.
P2: How To Build Wealth Slow, But Fast
Some people want financial freedom.
Some people want to be debt-free.
Some people want to earn 100k.
Some people want to save 250k.
Some people want financial peace.
Some people want to be billionaires.
Some people want to be millionaires.
According to Nomad Capitalist, around 1.5% of the adult population is composed of millionaires, with 38% of those being in America.
What this means?
Most people aren’t millionaires and likely never will be, but it doesn’t mean they can’t be millionaires.
At some point in your life, you’ve likely dreamt about being a millionaire and what you’d do if you had a million dollars in your name.
According to Ramsey Solutions, it typically takes 27 years to become a millionaire, with the average age of a millionaire being 49.
However, some say it can take much longer.
For example, Thomas Corley’s research found that the average self-made millionaire takes 32 years to reach that status, but 52% of people need 38 years, and 21% need 42 years.
Quick and easy is how most people prefer to build wealth.
It seems nice, but it’s a pipe dream.
Wealth is usually built slowly until it compounds fast — similar to Warren Buffet, who amassed most of his wealth in later life stages.
According to NBC, The odds in any lottery are about one in 300 million. That’s about 1 in 292.2 million for Powerball and 1 in 302.6 million for Mega Millions.
The same is true for cryptocurrency and hyper-aggressive business and investment deals.
They can be a way to make quick money or lose a lot of money super fast if you’re not cognizant of the pitfalls.
Who wants to practice patience and build wealth over time when there are seemingly endless opportunities to have and obtain wealth now?
Not many.
I get it. It’s not sexy.
It isn’t easy to practice patience and self-discipline for years, which is why most people aren’t millionaires or wealthy.
If building wealth super fast consistently worked, we’d have an abundance of wealthy individuals, but we don’t because quick and fast money building is not how the game works.
Building wealth is a slow game, and then once you reach a certain threshold, your wealth starts compounding exponentially (Read Warren Buffet’s story).
But first, you have to integrate self-discipline in three areas consistently:
- Investing.
- Increasing your income.
- Living below your means.
Once you master these steps and consistently practice them, you will inevitably build wealth.
Many income earners will likely have a set amount of income they can invest in, but this is not the end of the world.
It simply takes time.
If you don’t have time or want to build wealth faster, switch up the variables.
- Invest more.
- Live significantly below your means.
- Increase your income more frequently.
Are you ready to commit to building wealth?
The journey might seem slow at first, but then you arrive.
Remember, time will pass you by anyway.
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This article is for informational purposes only. It should not be considered Financial or Legal Advice. Not all information will be accurate. Consult a financial professional before making any significant financial decisions.