Some of the best lessons I learned about money didn’t come from working for investment banks or managing a hedge fund… they came from my parents. Below are some of the most important lessons I learned growing up – that remain a part of me every day – and will in 2018 as well.
This is my father’s catchall advice. Going to Mexico with a backpack on your back and a whiff of a job in a town you’ve never heard of? Think before you do anything stupid. Plunging down a new career path with no safety net where you’ll be doing something completely new? Think about where it takes you. Have some cash burning a hole in your pocket? Think about the best possible way you can use it – for today and for tomorrow. It sounds obvious, but thinking (especially about money) is actually quite hard for most people – so they don’t do it when they really should.
2. What money is… and what it isn’t
I learned to believe a few things about money…
1. Money is a way of keeping score. But it’s only one way of keeping score – and it’s one of the less important ways of keeping score. Other things matter a lot more.
2. Money is a tool. It’s a way of getting what you want – whether that’s time, travel, space, or a diamond-encrusted chess set from the Gobi Desert. And usually, it helps to have money to make more of it.
3. Money means options. If you have money, the range of opportunities available to you – what you can do with your time – expands dramatically.
4. Conversely, no money equals fewer options. If you’re struggling to make ends meet, your menu of opportunities is limited because you’re focused on making rent or the car payment tomorrow. You can’t choose what to do because your money requirements are dictating to you what you have to do.
But money is not an end in itself. The day that the number in your bank or brokerage account defines you, is the day that you need a money enema to straighten your head. Hearses don’t have luggage racks.