Money wisdom or lack thereof

Hello, fellow thinker!

Money is very powerful; It can change people’s lives. For me, the lack of it, and the desire to provide for my family, was the driving force behind my sobriety.

I have been fortunate to be able to earn a good income, but I was never able to manage it very well. The truth is I was never taught the best practices of saving and investing early on in my life and had a short-term mindset when it came to money. I was impulsive, ambitious, and optimistic. I earned a high income early in my twenties and wanted to become rich. I thought if I wanted to get rich, I wanted to make a lot more money than I was getting in my paycheck.

So, I quit my job, cashed out my 401K, got a line of credit and started a business. I didn’t adjust my personal living expenses and carried a huge monthly overhead. After 18 months, I ran out of money with not enough business to carry me forward. I unsuccessfully exited the company back in August of 2016, and found myself in a deep hole with significant losses and debts, and those same high overhead living expenses. I went back to the corporate world and returned to my old ways of living a lifestyle full of drinking and eating out, frivolously spending money, and not saving much of anything. I continued to neglect my fiscal ineptitude.

😎I went from being a young hustler, to a middle-aged buster. 💔

I didnt know it then, but my mistake had less to do with business, than it had with my lack of basic knowledge of personal finances. That was the beginning of my struggle with money as I felt ashamed of my choices, and it lasted for many years, feeding my depression, anxiety, and addiction.

There I was, back in NYC, with even less time to achieve my life’s goals. Namely to - retire comfortably, set my kids up for success, travel and see the world, and drive a convertible with my arm around my wife – you know, live the American Dream! The pressure was higher, and I kept replaying in my head, what my friend John once said to me – “I gave myself a raise on the first day of retirement!” He saved, invested, and planned this for a long time and is now living his best life traveling and reading newsletters…

And what was I doing? I was a slob, staying out late, getting drunk, feeling sorry for myself about not having enough money to by Christmas gifts for my kids, while wasting thousands of dollars at bars and strip clubs.

What the hell is wrong with me!?

That next morning, I woke up with the deepest shame and regret, I found myself in the Abyss. I emerged from the Abyss¹ with a commitment to never drink or smoke again and instead to focus on getting control of my life and my finances.

When you find yourself in a really shitty situation, there are two paths you can take. You can continue to wallow and be miserable, or you can start climbing out of that hole. And from this point forward, I decided - I CAN take action to change my reality.

Determined to take control of my finances, I turned to those around me – friends, neighbors, and financial experts. One name that stood out was Dave Ramsey². His books and the concepts put me on the right path and gave me the foundational ideas I was looking for. The first practical step I took was to track my expenses. I used the Mint app, which gave me a clear picture of where my money was going. At the same time, I renegotiated bills and canceled unnecessary subscriptions. Every dollar saved was redirected towards my debts or savings. I became more mindful of my spending, distinguishing between wants and needs.

Investing Wisely

Perhaps the most significant change in my approach to money was how I handled savings and investments, maximizing tax advantages. I began automatically investing in stocks, and I opened savings accounts that were not easily accessible. This helped in two ways: it prevented impulsive spending and allowed my savings to grow uninterrupted. Another tool that helped me was the Acorns app.³ This app rounds up my purchases to the nearest dollar and invests the spare change. For someone who didn’t know how to save, this tool was a game changer!

Lessons Learned

• Building Wealth: It’s not only about making money, its also about saving and investing it. I started my business because I wanted to get rich quick, and that was my biggest mistake.

• Knowledge Is Power: Educating oneself about personal finance is crucial. It's never too late to learn.

• Automation: Just like any habit, make it easy and automatic and you will see significant results. There are great books on this.⁴

Your journey might be different from mine, but the principles remain the same: Make money, understand your spending, reduce unnecessary expenses, save, and invest wisely, and always keep learning.

PS: I quit going to strip clubs too.

Links to recommended resources and books:

1. Joseph Campbell’s The Hero with a Thousand Faces - “Emerging from the Abyss” is one of the stages of the Hero’s journey.

2. Dave Ramsey’s The Total Money Makeover - Put yourself on a path to financial freedom.

3. Acorn’s App: Sign up for Acorns here - Automatically invest your change into savings.

4. David Bach’s - The Automatic Millionaire - Automate your finances to build wealth.

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If you enjoy these letters please leave me a comment on the online version of this post or you can reply to me directly and tell me what you think.

Keep thinking my friends!

Amir

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