Category: Financial Literacy

It does not matter who you are today, the only thing that matters is who you want to become and the price you’re willing to pay to get there. Tom Bileau on Mindvalley talks

Get comfortable with discomfort. Tim Ferriss

No woman steps in the same river twice. It’s not the same river, it’s not the same woman. Heraclitus 

Life is about growth.

As a young adult, and even into my early 30’s a good bit of my drive was that I wanted to make my parents proud. That changed for me when my kids were small. I stopped working to make my parents proud, and started working to make my kids proud, which is when my personal growth took off.

Early in life, I had an aversion to learning about finance. My husband was a banker, and I let him manage all of our finances. It stressed me out to even talk to him about our finances. 

I was the person who craved homeostasis. I never wanted to be too warm, or too cold, I sought comfort and avoided discomfort at all costs. I was like a child who peeks out the window but is too afraid to go outside and play. I don’t like remembering that version of me.

My hubby would come to me with business ideas and I would fight him on them. We built a mother-in-law apartment for his mom when she lived with us and Damon suggested that we rent it out when his mom moved out of state. I declined. I thought it was weird. I was worried about what my friends would think. 

He came to me with Amway once, which I whole-heartedly refused to do. My parents and some of my siblings had tried that, and I did not want any part of it.

Then something changed

When our kids were young, my husband decided to go back to school to get his degree. One of his classes was a finance class and required him to read a book from a provided list. Damon asked me to read one and write his essay as he was working full-time and I was staying home raising babies at that time. I read Rich Dad, Poor Dad, by Robert Kiyosaki, and it lit a fire under me. I couldn’t get enough. I immediately started reading financial and business books.

My parents

There is an expiration date for blaming your parents for steering you in the wrong direction. JK Rowling 

I love my parents, they are amazing people, but rather short-cited about financial planning. They never progressed financially beyond a certain point. Neither of them graduated from college, for which I was very angry with them as a child. My dad hated his employer, and eventually got laid off because he was so grumpy. My mom worked part-time off and on. 

They didn’t talk to us about college, or help us plan for the future. They didn’t encourage us to take the ACT, or practice tests. I only knew about the ACT because my older sister took it and bragged about how high her score was without having studied, so I thought I better take it. They didn’t encourage us to apply to multiple universities, or do any kind of research, No lie, the summer AFTER I graduated from high school, I thought, “Well, I guess I better apply to college.” I applied to the local community college and went there. 

This story shows lack of foresight on my part too. I get that, but some guidance would have gone a long way.

I don’t fault them, you can’t teach what you don’t know. The flip side of this beautiful coin is that my parents were very hands off when I became an adult and got married. They did not try to involve themselves in my doings, and have NEVER interfered in my marriage. 

A few investment attempts

My folks bought a condo in the college town where me and a few of my siblings went to college. The deal was we could live there on the cheap if we were going to school. I lived there for a few years. A nephew of mine lived there and stopped paying my folks rent. Not cool. After that they sold the condo. When I asked my mom why they sold it, she said, “it got to be too hard.”

I have a rich uncle who told my mom to tell us that if we could save a thousand dollars, he would invest it for us. I had no idea what that meant, so I didn’t take him up on his offer. 

I have a few more stories of my folks’ financial mishaps, but I won’t go into those here. I will say that my siblings and I have been very worried about their financial wellbeing for a while now. As far as I know, they don’t have any retirement savings to live on. 

Making my kids proud

When my kids were still quite young I decided I never wanted them to worry about me like this. I want my kids to be able to look at me and know that I have taken care of myself financially, that they are free to take care of themselves and their loved ones, because I have taken care of myself.

And so, I started learning about finance, and business. I still have a long way to go, but I so enjoy the learning and growing. I love the journey.

Asking your mortgage broker how much you qualify for on a home mortgage is like asking a fox to count how many chickens are in your chicken coop. The Millionaire Next Door, Thomas J. Stanley and William D. Danko

We bought our first home in 2004, 4 months before our oldest was born. 2004 was leading up to the housing crisis that rolled to a boil in 2008. This house was an emotional purchase. The guy we bought it from fixed and flipped houses while he lived in them. This house was so stylish, it had a trex deck with a fire pit, and a built-in BBQ. It had a hot-tub, a fireplace in the master bedroom, a clawfoot tub in the bathroom, designer tile, hardwood floors, and a huge shower with multiple shower heads. We liked it a lot and it was expensive. The bank was willing to lend us way more money than we could afford. I knew very little about finances at the time, and I was still shocked at what the bank was suggesting we could afford as our monthly payment.

Since then, I’ve learned a few things: You have to consider whether you will be able to maintain the property yourself, or if you have the income to pay someone else to take care of it. Here are a couple of questions to consider when looking at buying your first, or subsequent homes:

• Make sure you can put away 5-10% of the mortgage every month for repairs. Home repairs are inevitable, and it’s always better to be prepared for those costs. 
• Look at the roof line, are you going to be able to climb up there and clean the gutters? Are you going to have to buy a new ladder in order to do that?
• How big is the yard, do you have the time and desire to care for the yard?
• When it comes time to paint, will you be able to do it yourself, or will you have to hire out?

Don’t get into a mortgage payment that takes all your resources. Your mortgage should ideally be around or less than 30% of your net income in order for you to live comfortably, and not always be “house poor.” The banks want the loan, they may be nice and smiley, but their end goal is to secure the loan. The logic bankers sell for getting buyers into a mortgage payment they can’t afford is: “you’ll increase your earnings and be able to afford the payment in the future”. What a bunch of crap!! 

Stand up for yourself, don’t let a mortgage broker talk you into more than you can afford. Rent while you save. Buy what you can afford, and enjoy your apartment, or smaller house, and don’t compare yourself to anyone else, or where you think you should be.

If you haven’t met Mr. Money Mustache, I would like to introduce you now. He is a badass and financial independence teacher-preacher. Preach Brother!