You Can’t Outearn Your Stupidity

My plan was to post weekly (I learned from a professional YouTuber that consistency is key to driving impressions). I could use my travel schedule as an excuse, but the truth is I was procrastinating.

You see, the topic of money stresses me out. I grew up poor, and my single mom worked multiple jobs to make ends meet. I vividly remember the time we got kicked out of our one-bedroom apartment in Hong Kong because we could no longer afford the rent. An old lady spotted me and my mom sitting on a park bench late at night (I was enjoying a popsicle) and took us in.

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Mom and I on my 8th birthday
Now that you have a bit more context around my upbringing, you can hopefully appreciate what I’m about to tell you. If you are a capable adult with a stable income and no dependents and still living paycheck to paycheck, something is seriously wrong with you. Get your shit together.

I am not a financial advisor or therapist, but have worked with many financially savvy, literate people and know a thing or two about money management and psychology. Before you can lay out your goals and path to success, you have to first reframe your thinking.

Reframe #1: Stop living your life from crisis to crisis or paycheck to paycheck

Do you borrow money to keep a roof over your head or put food on the table? Do you pay for everything with your credit card and watch your balance balloon month after month? STOP IT. Live by the common sense principal: You don’t got the money, you don’t get to buy! Don’t spend more than you make, and don’t spend money you don’t have. Don’t have money for food? Go to a soup kitchen. Get a second job at McDonald’s.

Reframe #2: Debt is common, but not normal

I actually got into an argument with an Uber driver the other day (he might’ve given me a two-star rating). The guy was taking out a $300,000 student loan to go to nursing school. Listen, I’m all for continuing education and professional advancement, but spending a third of a million dollars (not including interests and opportunity costs) is absolute insanity! Side note: I applied to over 30 merit-based scholarships, and received enough to cover my four years at Yale AND have leftover ‘spending money.’ Anyway, I told the Uber driver that he was stupid (in hindsight, my delivery could’ve been better, but I was hangry). Moral of the story? Stop normalizing debt, and stop skipping meals.

Reframe #3: You will live for a long time, so start setting some life and financial goals

Yoga and meditation people love to “live in the present.” I agree, to an extent. Life is a marathon, and in order to win, you would have to know what your success metrics and milestones are. If I wanted to retire at the age of 50 😉 I better have enough money to live comfortably for at least another 40 years (I eat my veggies, exercise daily, and will live a long, happy, prosperous life). Working backward, I would need to make sure I have a house that is fully paid off and a decent amount of retirement savings. As a security measure, I purchased term life insurance so my family doesn’t get screwed in the event of my passing (tip: purchase your life insurance early and lock in a great rate. I got mine when I was 25, and pay only $30/month for a $1 million policy). As mentioned in my previous post, I view home ownership as an investment diversification strategy. Before you decide to buy vs. rent, you should understand how home ownership enables you to meet your overall life and financial goals.

Reframe #4: Your age is not an excuse; be a savvy consumer

This one is for my fellow millennials. Yes, I like those $9 avocado toasts and $12 protein shakes, but are they really worth my hard-earned money? HELL NO. Be a savvy consumer, and always shop around for competitive prices on goods and services (most things in life are negotiable). Don’t dismiss the little things ­– they add up. Also, it is important understand the value you are realizing. For example, I pay $450/month for my Barry’s Bootcamp membership. No, it’s not a typo. And yes, it is outrageously expensive for a gym membership. Before you start calling me a hypocrite, know that I had done a thorough, six-week competitive analysis before I made the commitment. Ultimately, I decided that given my exercise pattern (once a day, at least one hour of heavy cardio) and need for consistency (I’m a creature of habit, and enjoy working out at 6am every day), Barry’s would be my best option (they make you do things you would otherwise never do to yourself, and I have truly benefitted physically and mentally from the results of my hard work). Remember, the term “expensive” is relative. Understand what it means for you in any given situation.

Reframe #5: Saving for the future is not something you do when you get old

Do not wait until you turn middle-aged to get smart with your money. If you have not set up a six-month emergency fund or retirement accounts (Roth IRA and 401k), stop reading my blog now, and go figure them out ASAP. Remember the beauty of compound interest. Start saving and investing early, and have your money work for you! Also, if you are planning to buy a house, make sure you are saving for the 20% down payment. Why 20, you ask? It is the magic number because it is generally a big enough amount to protect lenders from default. In other words, lenders are far less likely to lose money in mortgages where the borrower has put up a down payment of at least 20% of the property’s value. Don’t worry, I will dedicate a full post to mortgage and lending.

If you have gotten this far in my post, you are my people 🙂 Remember, thriving, healthy, happy adults are debt free and in control of their finances. Before you can become a homeowner, your finances must be in order. If you need help getting out of debt, Dave Ramsey is an excellent, free resource I would highly recommend. Go follow him.

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