I grew up in a fairly financially literate household.
My dad was a serial entrepreneur with a high tolerance for calculated risk, and my mom was the more conservative one who had a mind for resourcefulness. In short, my dad earned and my mom saved, and they made a great match for each other (and for their kids to learn from).
And even with this (what I believe to be comparatively uber-healthy relationship to money compared to what a lot of people grow up with as financial role models), there were still some things that I wish I had been taught much younger about money (or taught at all).
Not to go too far down the conspiracy theory hole here… but the more disempowered we are when it comes to our relationship to money, the more controllable we are. The more controllable we are, the easier it is to convince us that we’re defective, and need a solution to our inherent brokenness.
Everyone has their stuff when it comes to money. It’s such a loaded topic because, in a society that values productivity and achievement above all else, it’s so easy to conflate our net-worth with our self-worth.
Over the last decade I have had the great fortune of having some truly remarkable mentors (and clients) who had such bulletproof money mindsets that a lot of their wisdom has rubbed off on me through the years.
So, without further ado, here are the nine things I wish someone had taught me about money in my teen years, so that I could have had an earlier leg up in life.
1. The money you make matters, the money you save matters
An often passed around sentiment is that “It’s not about how much money you make, it’s about how much you save.” And while this is valuable advice for a good percentage of the world that overspends and lives beyond their means, it isn’t an either/or equation, but rather a both/and.
Yes, saving money matters, but so does your income.
An expert saver who makes $20,000 per year will generally not save as well as someone who is an okay saver who makes $500,000 per year.
The income you generate through your work is important, and so is how much of that you are able to hold on to and invest.
Both sides of this equation require effort and discipline.
It can require effort to let go of your mental blocks to money and discipline to put in the effort that allows you to call money into your life. It also requires effort and discipline to not then immediately turn around and spend all of your earnings on a new pair of thousand dollar sneakers every week.
I will go deeper into both sides of this equation at multiple points throughout this article.
2. Time is more important than money
The following is a true story.
There once was a local fast food restaurant that put out an offer online that said, “If you print this coupon off and come in to this location, you can get a burger for free. Absolutely free. No strings attached. Valid today only.”
The burger was roughly valued at $6.
Within the hour, hundreds of people were lined up outside of the restaurant, and the line was so long that they packed themselves in covering more than four city blocks.
Now, everyone loves a good deal, and I get that.
But if you zoom out for half a second and think about it rationally… many of these people were waiting more than two hours to get their ‘free’ burger. So if you do the basic math, they were valuing their time at approximately $2-3 per hour.
I bet that if you asked those same people if they would sit on your drive way and do absolutely nothing for $2 an hour, most of them would say no (well, at least I hope that that would be the case).
But that’s exactly what they were doing. Instead of coming in the next day and spending $6 and getting their food in three minutes, they were willing to wait two to three hours to get it.
This true story is a microcosm of how people relate to time and money.
People with unhealthy money mindsets disproportionately overvalue their money, and undervalue their time.
With all of the money mentors that I have worked alongside over the last decade, the exact opposite has always been a faster ticket to financial freedom.
Don’t be so married to holding on to your precious dollars at all costs (pun intended), and be more aware of how you invest your time on a day to day basis.
If you don’t like a book you’re reading, stop reading it. If you can’t stand the movie you’re watching, leave the theatre. If you find yourself feeling completely drained after hanging out with your friends, and this has been a pattern for months or even years, then change your social circle. Bulk-buy certain things that you know you will be using long-term (toilet paper, toothpaste, salt, etc.), again, not for the dollar savings as much as the time you save by not having to go pick it up whenever you run out.
Your time matters. You can always make more money, but you can’t generate more time. So treat it as the precious commodity that it is.
3. Be roughly aware of where your money goes
It isn’t necessary to know where every single dollar goes. You don’t need a super detailed monthly spreadsheet accounting for every outgoing cent. But it is important that you have a general finger on the pulse of a) where your money goes, and b) approximately in what volume.
I have known people who accounted for every dollar, and I think that this level of detailed attention quickly leads to anxiety and scarcity thinking.
And I have also known people (many more people, compared to the previous example) who completely turned a blind eye as to where there money went for years. And while it is good, on one level, to generally trust that money flows in and money flows out, having no sense of what your monthly expenses are is a one-way ticket to broke-dom.
You can use an app like Mint, or just put all of your expenses on your debit and credit cards, and then look at your statement at the end of the month.
Are you surprised by what you see? Do you spend more on entertainment/food/clothing/transportation than you assumed?
The point isn’t to make yourself wrong. Simply having the rough number in your mind as to what you have already been spending is enough of a start. Then, if you want to start making small and gradual adjustments as to where your money goes from that place of awareness, you are free to do so.
4. Focus more on value creation than you do on penny pinching
Most money advice focuses too much on saving. Not buying your morning coffee at Starbucks might save you $100 a month… but it isn’t going to make you rich.
If your goal is saving a significant amount of money, creating massive value for the world matters more than cutting costs.
I think of it like this…
You can’t control the direction the wind is blowing, but you can create a bigger sail in order to catch more momentum for your boat to coast with.
Sure, put some energy towards cutting costs. Negotiate your monthly phone bill down $20/month if it’s easy enough to do. Make your own breakfasts instead of eating out every morning.
But most of your wins will come from the unlimited upside of the equation, which is creating more value for the marketplace.
Which leads us to…
5. You can always become more valuable to the market
Abraham Lincoln was quoted with saying, “Give me six hours to chop down a tree and I will spend the first four sharpening the ax.”
Or, how this is relevant in money terms, there’s no way that you can double the amount of hours that you have in a day with which to work, but there is a way in which you can double the value that you bring to the marketplace. This is that whole ‘work smarter not harder’ thing you’ve probably heard before. Except instead of working in a more intelligent manner, it’s about becoming more as a person.
Get your master’s degree. Start a new business. Put out a new product.
Find a way to sharpen the ax that is you. Add more value, receive more value.
Or, as Zig Ziglar once said, “You can have everything in life you want, if you will just help other people get what they want.”
Focus less on ways that you can find and generate money, and think more about how you can either help more people (scale) or help the people that you’re already helping that much more (depth/impact).
This overall mindset shift also lends itself to the idea of being a lifelong learner. As long as you are growing, learning, and giving more, you will never want for anything. It is only when your mind collapses into a selfish, constricted state that it convinces itself that money is a scarce resource that must be conquered and hoarded.
6. Reward yourself
If you’re a parent and you’re going on a long road trip, eventually your kids (who are sitting patiently in the back seat) will become bored and will start asking “Are we there yet?”
This is how your subconscious mind/inner child works when it comes to saving a good amount of money.
If you delay gratification and do a good job of building wealth, but you never reward yourself, your inner ‘kids in the backseat’ will grow tiresome and start revolting.
Many of my clients are what I would consider to be super-earners (making anywhere from $3-200 million dollars per year), and this is a common trap that they can fall into.
Discipline is a valuable skill to have in your tool belt. But if it isn’t offset with occasional fun, play, rest, or reward, then the soul dries up and you will feel depleted and/or resentful.
So make sure you’re rewarding yourself along the path to keep your full self engaged and aligned in the process. Rewards are always highly individual. What is a reward to some is a punishment to others. So make sure you’re regularly checking in with yourself and asking ‘What does the carrot on the end my stick need to look like for me to stay motivated in this journey?’
For me personally, anything to do with body work, self-care, play, or quality time and experiences with friends usually does the trick. I also recently bought myself a $2,000 electric skateboard (after sitting on the decision for over a year) and it brought me so much joy that I wish I had done it sooner.
7. Get rich slowly with long-term investing and thinking
Just like most people value their money more than their time, in my experience, the majority of people also think in too short of a timeline.
They want to get rich quick. They want investment opportunities that will make them instant millionaires. They want to know how to start businesses that can generate crazy amounts of cash from day one.
Without fail, all of the most successful super-earners I know got to where they are through hard work, consistent effort, and patience.
As Conor Oberst, of Bright Eyes fame, once sang, “I’d rather be working for a paycheque, than waiting to win the lottery.”
One super non-sexy way that I invest my excess capital is with an app called Wealthsimple. It consistently gets me anywhere from 10-15% returns on my savings accounts. Now, for someone who is a day trader, crypto fanatic, or serial entrepreneur with twenty businesses on the go, these returns might seem pithy. But for someone who loves thinking about money as little as possible (my hand is raised high), this app is an absolute god-send.
(Side note: this article is not a sponsored post, but because I personally use this service, you can get your first $10,000 managed for free when you invest your money through this link)
8. Let your money work for you
Money is energy, and energy wants to move. So sitting money is dead money.
With this in mind, sitting on a large amount of money and just having it collect dust in your chequing account is a guaranteed way to lose money as inflation will be whittling away at your savings.
While there are times when sitting on a pile of liquid capital is a smart choice (when you think we’re on the precipice of a recession, when you’re waiting to invest in undervalued stocks, when you’re about to buy a business, etc.), by and large, you want your money making money for you.
Anyone who has spent even an hour learning about investment strategy has likely heard the term compound interest. This is when you invest money, the addition of interest to the original amount of money occurs on top of the principal amount, and then you earn interest on the principal sum plus the interest. This effect compounds with time, and you make money on top of your earned money.
So if you invest $100,000 in an account that nets you 10% returns year over year (without investing a dollar more), then after a decade your $100,000 turns into $259,374. If you are able to let that amount sit for another decade, then that amount accumulates to an amount just shy of $700,000. So this stuff adds up fast.
Two things to let percolate from this section:
a) invest all spare capital you can into an account that nets you somewhere in the 6-15% range and leave it alone for as long as you can, and
b) time matters. Get your savings into a high interest (and ideally tax-free) savings account as soon you as can. Those extra years will pay massive dividends long-term.
This is how simple saving for retirement can be for people with normal jobs. If you sock away $50,000 up front and put in $10,000 a year for a number of years, you hit a million dollars in savings faster than you might have thought possible.
9. You are the most important asset you could ever invest in
Last and certainly not least, the most valuable asset you could invest in is yourself.
Warren Buffett, one of the grandfathers of modern investing once said, “The best investment you can make is in your own abilities.”
If there’s a mentor that you want access to but you have to pay, then pay. If there’s a mastermind group that has a financial requirement to join, pay that too. If there’s a program, a training, or a workshop that you know will be good for you but it costs money, pay that money and make it happen.
Again, people are too stingy with their money and not stingy enough with their time.
The right coach, counselour, or mentor can literally shave years off of your learning curve if you are open to receiving their gifts (and paying for those gifts).
I have invested tens of thousands of dollars in mentors, coaches, therapists, and experts over the last fifteen years, and I have never regretted a single dollar spent. In fact, I can attribute all of my greatest growth surges (in terms of personal fulfillment and financial mastery) to times where I anted up and put my money where my mouth is.
So if you’re holding back on investing on yourself because it costs money, I would encourage you to look at that and second guess it.
Think of all the time, energy, and effort it could require to try to learn it on your own. And then think about how much sooner you could be out of pain and into pleasure once you commit yourself fully.
Invest in yourself first. You’ll be glad you did.
Dedicated to your success,
Ps. Here are a few recommended resources and a solid reading list on the subject of financial literacy and overall money mindset:
– Wealthsimple (robo-investor that can predictably give you 6-15% returns so you can beat the market without investing any time into day trading. This is where I personally put all of my money that I am not actively involved with)