The Things I Wish I Had Known About Money…I Could Write a Book

I don’t come from a background where the people around me were prone to always make good decisions about money. I guess one can easily draw the conclusion that I also wasn’t born into a wealth legacy. In my environment, there was only the occasional windfall. I had to learn the rules of money the hard way. The windfall mentality has a strange effect on your beliefs about money. As you get older, and start to earn, your paycheck becomes the windfall and it tends to burn a hole in your pocket. You spend, and you really don’t feel satisfied until all of your disposable income is gone. Most of us spend on things associated with the desires of our group, culture, or both. A good deal of our need references come from a variety of media sources, but then again, don’t we choose our media programs based on the groups we identify with? It’s a vicious cycle.

Without a doubt, television has always been a great tool for the banking, and credit, industry. In particular, I have to give a shout-out to Edward Bernays, the inventor of public relations. I don’t want to go into a retrospective on the culture of television, but I will say that once it was in every household, it was easy for corporations, along with the banking industry, to help the average American go for broke. Television taught us how important it is to keep up with the Joneses/Kardashians. I know it's hard to admit, but we do spend an awful lot of time and money competing with one another. Sometimes the competition is subtle, and other times not so much. Not paying attention to the source of our desire to spend may lead us down a path to financial chaos, miserable, dead-end jobs, and unhappy relationships. Most of us don’t consider the impact our relationship with money has on our relationship with others, but it does. Our beliefs about money set a standard for how we value ourselves, and also how we’ll make relationship choices.

One of the most important things I wish I had known about money is that banks are in business to make it, and they make most of it by taking mine and yours. I’ve also learned that, despite their charming and witty commercials, banks are not your friend. Your association with them is strictly a business transaction. The primary goal is to lend you money, and have you pay that back plus interest for the privilege of borrowing. Don’t let me get started on student loans. That’s a topic for a whole other blog post. I don’t really have anything against banks. I will even go as far to say that, without student loans, it would have been difficult, if not impossible, for me to go on past an undergraduate degree. I’m sure many would agree that banks are a necessary evil. My perspective has changed, though, and I now understand how important it is to figure out the most strategic (and of course legal) way to profit from the amount you’re borrowing, especially if your goal is to build long-term wealth.

For too many years, I thought I was on the road to building wealth while I spent myself into debt. The economic downturn, and my research into the psychology of groups, caused me to take a look at the motivating factors of my own spending and why I believed it was okay to be in debt. Most of my adult life I had an income that could, potentially, put me on the road to building wealth, yet I avoided those deep money questions, the primary one being: Why do I buy?  If I could go back and do it all over again, I would come out of the gate with a very different mindset.  Starting with my first job, my number-one priority would be to lay the groundwork for a wealth legacy. I would pay more attention to economic news, and commentary, including their relevance to domestic and foreign policy. I would pay attention to the movement of money and investing on a global scale because I would be clear on how these things all tie into my future earning prospects and financial security.

I would take serious stock of the money decisions made by the adults around me as I grew up. I would then make a conscious decision to do something different. If I chose to have credit, I would use it strategically. I would try to pay my balances off every month, or apply as much to the outstanding balances as possible until it was all paid off. I would pay attention to every dime the bank made from me in interest.  I would start out with an understanding that money represents freedom in a very real sense, but that freedom can only occur if the money you earn is used with intent. Not being born into wealth doesn’t make you financially handicapped. It simply changes the starting point. In that respect, there are rules in the game of wealth. I know now that it's important to have a game plan or, instead of gaining freedom, you’ll sentence yourself to a life of slavery to debt.  I would consider looking outside of my general environment for those who’ve accomplished what I’d like to financially. I would also try to stay aware and prepared to act on solid investment opportunities when they present themselves.

The internet made the concept of buying low and selling high clearer for the average person to wrap their financial mind around.  Before I buy a particular item now, I pause to reflect on its resale value. More often than not, it doesn’t even matter if I’m buying it for personal use. The potential of this idea has been, for the most part, exclusive to people with big money to invest, but the online marketplace has been a game changer.  More than ever, now people understand that wealth legacies can be built by investing in a variety of tangible items, having appreciative value, such as collectibles, precious metals, and fine art.

If I could go back, owning a home wouldn’t be the priority investment. For generations, we’ve been fed the idea that home ownership should be the jewel in the crown of our investment portfolio. There may have been times when this was the case. I do know of several people who bought and sold, within a year or two, during the last real estate boom, and profited $100,000 or more, but I think it’s fair to say that we’ve come to the end of the phenomenon.  Realistically, when you factor in the cost of repair, taxes, location and then, of course, project what might be the cost of living when you finally sell, you’ll probably find that the best way to view your home is as an investment in your family’s future in terms of community, school district, and a sense of comfort, and not a monetary gain.  Today, the decision to own or rent should be considered with long-term goals in mind.

Knowing what I do now, I would offer to anyone seeking advice about money not to take the journey backward. Don’t end up trying to use your talents to earn a living after you’ve worked for years at a job or profession you hate. Try to figure out what you're good at early on.  Identify the thing you like to do that excites you and gives you a reason to really look forward to getting out of bed in the morning, and then figure out if there's a way to earn a living doing it, even if you have to do it part-time at first. That way, even if you don’t reach your wealth goal, at least you can say that the journey meant something to you on a very personal level, and that you had a good time.

Related Reading

History is a Weapon (Propaganda) by Edward Bernays

Related Video Links
In Debt We Trust: A Documentary
How Money and Credit Control Your Life


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© 2018 Diane Coleman. No part of this work, written by the author, may be reproduced, reposted for any website, or print publication, without prior permission.

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