Culture vs Behaviour of The Financially Independent
Today I want to talk about culture / upbringing vs the behaviour of the financial independent.
Wanted to bring this up today as this is something that has affecting me and something I had to correct to get on the right path towards financial independence.
For myself, there were certain things I heard growing up that shaped the way I thought and behaved around money that I didn’t realize until I got older.
For example; going up in the church you would hear, money is the root of all evil, or you don’t get certain opportunities cause of your skin colour, your being oppressed by a group of people.
I believe culture shapes what people normalize, talk about, value, fear, and expect.
Culture can influence behaviour and behaviour influences financial outcomes over time.
The more I went down this personal finance journey, I realized it’s less about race and culture itself and much more about the repeated financial behaviours, habits and beliefs people operate with over decades.
I believe a person from any background can adopt financially strong behaviours once they become aware of them as this is something that I did.
For myself:
investing was never discussed,
business ownership isn’t common,
retirement planning isn’t explained,
and money conversations are emotional instead of strategic
But once you learn and actually have a couple of wins, It’s hard to go back to the things you use to hear when you were younger, and start taking things at face value.
Once I exposed myself to the books, youtube videos, podcasts and blogs and actually started executing on the knowledge I’d obtained, I started to say, oh these people are just doing things differently.
You come to the conclusion that it makes sense why these people are doing better financially.
Tracking Your Money
Growing up for myself, money seemed be tight. It seemed as it was always about surviving vs thriving
One of the first thought leaders I got exposed to was Dave Ramsey. When people call into his show and are in financial distress, he always talks about sitting down and making a budget.
Knowing where your money is going
David Bach, another leader in the space, doesn’t believe in a budget but says you should track your money and know where it’s going.
Once I learned about this, I starting using Mint to track my money and it was a game changer. The app is not around anymore so now I just use a regular spreadsheet.
Once I did that, I knew right away weather I was in a deficit or surplus at the end of the month
Having a snapshot makes it simple to see the areas you need to makes changes.
Debt
Growing up, you see purchasing decisions based on wanted something vs do I have the funds to actually pay for it.
It would be nothing to see someone put a purchase on a credit card or take out a line of credit to get something they desired.
The shocking thing is that the debt being accumulated was for things that go down in value.
I was watching a podcast with David Bach (can’t remember which one) and he said something that’s so true:
“You don’t go in debt to buy things that go down in value, you only go into debt to buy things that go up in value.”
In 2019 when I refinanced my condo, there were 2 things I purchased. My second home that I was going to move into and my 2006 Honda s2000.
That Honda s2000 was a dream car for me for a very long time. The funny thing is, since I’ve bought that car, it has actually doubled in value.
Educating Themselves on Finances
A majority of people are not awarded the privilege of being taught about personal finance at a young age. Most have to learn and educate themselves.
Growing up, their was always a huge emphasis on post secondary education.
“You have to be educated.”
But then ask someone about investing, not a clue
So “education” is so important yet the majority of “educated” people will not educate themselves on basic investing and how to grow your money.
This never made any sense to me.
I passed my Canadian Securities Course to be eligible to work in the investment field, but never had a grasp about investing. I more just memorized the material then actually understanding it.
Once I learned and understood invests, what investment style was the most successful for the average person and actually executed on it, it was a game changer.
Once I started seeing success with my investing, I actually got upset. A little frustrated.
Your telling me regardless of what culture or background you come from, you can open up a brokerage account, preferably a TFSA to start in Canada, fund it, start buying investments and no one will ever ask what race or gender you are when purchasing them ?!?!?
It was a game changer for me.
