What would you tell your younger self about money? Here are my top 5 things.
I’ve learned a lot in my 20 years as a financial planner. Here’s what I wish I knew 20 years ago.
Time to read: 9 minutes
Table of Contents:
Lesson #1 - Whether you [feel] you can or you can’t, you’re right
Lesson #3 - You have the power to define the meaning of money in your life
I am going to share with you what I would tell my younger self about money.
But, before I share mine, I think it would be a worthwhile investment of your time to think about the lessons you would share with your younger self.
So…
If you could tell your younger self one thing about money, what would you say?
And if you could teach your younger self a lesson about life, what would it be?
I’m sure you’re thinking, ‘Brent! I can’t think of just one!’
Given that I am sharing five lessons, it’s only fair that you can come up with as many life or financial lessons as you’d like.
But I encourage you to take a minute to think about the lessons you have learned, and, maybe more importantly, to make sure you are still applying those lessons to your life choices today.
If there is one thing I’ve learned in my twenty years as a financial planner it’s this,
“It’s not your money that fails you; it’s your choices.”
So let’s dive into the five lessons that I want to share with you. As a financial planner for almost twenty years, I’ve learned quite a bit not just from my personal experiences but also from having worked with thousands of people of all ages and across all stages of life from starting their professional career to retirement to the passing of a loved one.
Lesson #1 - Whether you [feel] you can or you can’t, you’re right
Credit to Henry Ford for this one, kind of. He actually said,
“Whether you think you can or you can’t, you’re right.”
I am not discounting the power of positive thought, but how we think is just the tip of the iceberg when it comes to what really drives our decisions and our actions. In fact, 90% or more of our decisions are driven by our subconscious mind that is controlled by how we feel. And how we feel about our money is based on our emotional relationship with it.
Money is one of the most emotional elements that touches our lives and it is a top cause of stress for many people around the world. Studies have shown that stress and strong emotions can override our neocortex (our higher level thinking brain) and hijack how we make financial decisions. Our feelings quite literally determine how we think, and most of us aren’t aware of the subconscious emotions that are driving our decisions and determining the quality of our lives.
We all have emotional triggers attached to money. They could be fear, shame, disappointment, regret, unworthiness or even placing our self-worth on our net worth. These feelings can lead to a negative emotional relationship with money which can lead to negative self-talk which can lead to a story that we aren’t capable of making progress with our finances.
When we feel we can’t, it becomes a self-fulfilling prophecy.
When we feel capable and we think clearly, we can improve our financial decisions. When we improve the quality of our financial decisions, we can improve the quality of our lives. This all becomes possible when we are consciously aware of how we feel and we work to create a positive emotional relationship with money.
When we feel calm and have clarity and confidence in our decisions, we put ourselves in control of the lives we want to live.
If you want to master the role that money plays in your life, start with mastering your mindset.
Remember, whether you feel you can or you can’t, you’re right.
Lesson #2 - Define the game you want to play
“If you've been playing poker for half an hour and you still don't know who the patsy is, you're the patsy.”
― Warren Buffett
What do I mean by the game? Your game is the life that you want to live. It’s who you want to become, what you want to achieve, what you want to contribute, and what you want to experience. Your game is different from mine, as it should be. Many people never define their game, and, as a result, they end up playing someone else’s and they never seem to understand why they can’t get ahead. If you play someone else's game, you rarely, if ever, win. Why? Because you’re the patsy.
Define the game you want to play and then get to work creating your edge.
For me, I decided my professional edge was going to be in financial planning. I dedicated the first 10 years of my career to being world class at my craft. After 10 years, I had an edge, and that edge allowed me to join a small team that founded Facet in 2016 (which was ranked #46 on the Inc. 5000 Fastest-Growing Companies in America list in 2022). That edge may one day help me build the kind of wealth that can create financial freedom for my family. My game is financial planning. My edge is my education, experience and expertise.
As a financial adviser, I talk to a lot of people about their money. The most successful people I know aren’t crypto millionaires, they weren’t following Reddit and messing around with GameStop or AMC stock, they aren’t day traders or “experts” in trading options or currencies because they took a two-hour class online. They are masters of their game and their craft. They have an edge that they built over years (not days like social media platforms seem to suggest).
Developing your edge is a lot like compound interest. The return feels small at first but, with consistency and focus, your personal growth starts to explode in the years ahead.
Stop playing someone else’s game. Define the game that you want to play (the life you want, the values that will drive your decisions, what brings you true fulfillment) and start creating your edge to make it possible. If you don't, you will play someone else’s game and by someone else’s rules.
Lesson #3 - You have the power to define the meaning of money in your life
Society, over thousands of years, has placed a cultural significance on money. To the external world, money conveys status, fame, power, intelligence, success, and other things on people that have it. If you aren’t careful, society, the external world around you, will define the meaning that money has in your life.
But here’s a little secret. There’s a second and less discussed meaning of money and it’s very personal and entirely internal. It’s part psychology (how you think and feel about it), part utility (how you use it), and part subjectivity (personal choice). When money, and how you use it, is aligned with your values, the person you want to be, and the life you want to live, it gains real meaning in your life.
For the happiest, most fulfilled people that I know, money isn’t about fame or power or status.
Money is freedom.
It’s freedom from financial worry and stress. It’s the freedom to choose how, where, and with whom you spend your time. It’s the freedom to define the person you want to be and the life you want to live. Money, and more importantly your plan for it, is the freedom to control and shape your future with confidence.
The right plan for your money is all about giving you the freedom to live life on your own terms. Money isn’t everything, but, used well, it can give you the freedom to do almost anything.
However, there’s a big catch. Freedom, as it turns out, isn’t free.
Lesson #4 - You set the price of your financial freedom
I define financial freedom as having enough passive income, and the wealth to generate that passive income, so that it can cover the lifestyle expenses for the life that I want to live. It’s when work (trading time for money) becomes optional. And that freedom has a price.
Think about it this way. If you need $40,000 per year of income to maintain your lifestyle, you need roughly $1,000,000 to achieve financial freedom. At $80,000 of income you need $2,000,000 and at $120,000 you need $3,000,000. Your number is the price you are placing on your financial freedom. As your lifestyle expenses increase, so does the price.
Most people struggle to achieve financial freedom because they can’t keep the price from increasing. They continue to increase their lifestyle expenses which increases how much wealth they need to create the passive income they need to cover their expenses.
George Foreman summed it up nicely,
“It’s not at what age you want to retire. It’s at what income.”
This doesn’t mean you shouldn’t buy a nice house, a nice car or even that lake house. It simply means to be aware of the impact these decisions will have on your freedom, how you spend your time, and the quality of your life. You set the price of your financial freedom, and every decision you make is either making your freedom more or less affordable.
Lesson #5 - Miracles and money have a lot in common
At some point in my relationship with my clients, I ask them one question, “What is a miracle?” The most common answer is that a miracle is something that we can’t explain or didn’t think was possible.
I prefer to use Charles Eisenstein’s definition that,
“A miracle is something that is impossible from one’s current understanding of reality and truth, but that becomes possible from a new understanding.”
Many of us, myself included, enter our adult lives with limiting beliefs or a limiting mindset that stems from lessons we learned as children. In fact, many of the subconscious thought patterns that govern our financial decisions are formed by the age of seven.
These subconscious beliefs, values, and attitudes determine our individual money stories – what we believe to be true and what is possible with it. In essence, your story determines what you think is a miracle (and impossible for you to influence) and what you think is possible (and within your sphere of influence).
If we are open to exploring our money stories and taking action to change them, we can create a new narrative around what is possible. And I can honestly say that once you figure this part out you will unlock the unlimited potential of money to be a powerful tool to help you define, shape, and express the person you want to become and the life you want to live.
Your decisions are the only way you can influence your life, and the quality of those (financial) decisions will determine the quality of your life.
As Ralph Waldo Emerson so eloquently put it,
“The only person you are destined to become is the person you decide to be.”
Your next decision can change your life. What will it be?
Cheers to health, wealth, and the good (financial) life,
Brent