How I got this way..
..on the subject of money
Originally published on January 15th, 2025
Welcome to financial wellbeing post #1.
One of our closest friends spent some time with us right before New Year’s. She mentioned a training she once attended where the following question was posed to all trainees:
‘Tell a story about your life that describes your relationship with money.’
Below is one of my “chapters:”
My love affair with the study of personal finance began during my junior year of college. In Autumn of 1998, I was finishing up my junior year at Cornell, running one semester behind schedule (most of my classmates were starting their senior year). The previous year (1997), my girlfriend and I were expecting a child. We got married in March and in October, our son was born. My (and as a result “our”) finances were total chaos and I’ll come back to that later. I was taking a course on real estate finance and learning how interest worked and the lessons were so relevant for me that they couldn’t possibly escape my grasp, despite my historically loose grip on academic knowledge.
The day I learned how interest worked, and in particular how it compounded, I walked through the front door of our one-bedroom apartment and opened the closet door, just to the left of the entrance. On the floor of the closet was a shoebox, which was filled with unopened envelopes from the credit card company. I opened the box and looked at the envelopes with new eyes. I now saw these envelopes differently than I had when they arrived in my mailbox and I had stuffed them in the shoebox unopened. This is what I now understood because of a 1 hour 40-minute long class in which I learned about how interest works:
Each $50 sweater I purchased would cost me $324 in seven years (excluding the fees I was incurring due to nonpayment)
I’d purchased about 12 sweaters, so the $600 I thought I’d spent was really about $4,000
Tommie Hilfiger could afford to spend $4,000 for sweaters and so could the CEO of Citibank, which issued the AT&T Universal Card that I used to buy the sweaters
But since I earned $8/hour and was a full time student who had been married for one year and was the father of a one-year old baby, I could not afford to pay $4,000 for sweaters that cost $600… which I also could not afford!
The concept of compound interest is a “beast!” A $50 sweater can cost hundreds. A $600,000 home often really costs more than $1,000,000. But I also learned that just like compound interest was multiplying my costs, it had the power to multiply our income and create wealth. I went to college with a lot of rich kids and as a kid who had grown up in what would be considered an under-privileged neighborhood and as a recipient of public assistance benefits, it felt like everyone around me knew things that I did not. I figured that the knowledge I was being exposed to explained much of how the wealthy got wealthy and stayed wealthy. Decades later, having traveled a length of my own financial journey and having served as a finance executive (including managing a $5 billion corporate balance sheet)… I still think that!
Since that fateful day in 1998, we’ve experimented with several financial practices and principles to see what works for us. Now that our children are older than I was when I opened up the shoebox of unopened bills, I enjoy sharing with them the things I’ve learned along the way. In a sense, I’ve been sharing these ideas with them their entire lives. In fact, the older I get the more I realize that my parents taught me lots of amazing financial lessons and time will allow those lessons to continue to unfold. I’ve recently begun to share some of these lessons more publicly and will be doing so on Wellbeing Grant as well, over time.
A few thoughts in a nutshell:
(1) money is a tool to be neither revered, abused or neglected (i.e. don’t leave your bills unopened in a shoebox.. lol.. but seriously.. don’t do that!)
(2) there are some basic principles of financial management that serve us no matter where we sit with respect to financial net worth
(3) developing wealth is about:
developing healthy money habits and practices that serve you, your family and community
being intentional about how you use the money resource
neither financially exploiting nor being exploited by others.
More to say on all this…
Until then,
Be well.. and wealthy…
Wellbeing Grant
