A Pivot In Mindset Concerning Personal Finance

Are You Ready To Pivot Your Mindset To Change?

I'm forty now, but looking back on my past and my upbringing in New Orleans, I didn't get an allowance and whatever money I did get, I likely spent it all on cloths and food.  I am pretty sure if memory serves me correctly that I never had a piggy bank or checking and savings account in which I was actively putting money in myself because I had become aware that I needed to know how to manage my money.  There was no classes on personal financing, though if home economics was still around perhaps I would have learned it there.  I can't honestly say I remember my parents mentioning anything to me about personal finance except, implicitly, I knew I wasn't likely to get Jordans, or Filas, or Troop because their money was earmarked for other things.  They may have been on budget, but I didn't know it as such.  It wasn't until in my late thirties that I had even started to have conversations with my dad about personal finance and other investments.  

Talking Dollars

So, the subject of money and use of it wasn't really talked about openly in my household.  I know though my parents controlled the money and rarely could I get the brand name cloths I wanted to buy for myself because I didn't have any, nor did I want to get a job.  I remember as a youth the pressure to fit in and that included having the latest fashions like Girbuad, Polo, Nike, Tommy Hilfiger, etc.  Those brands made it appear as though you had money. Although my parents might not have talked to us about personal finance, through their actions I knew they valued that we get a good education and we went to private schools since I was 10 years old.  My parents sacrificed making us fashionable to make us educated.

The Rebellion

As a youth, you butt heads with your parents on a lot of issues because you are young and dumb, not yet knowing that difference between you and them is that they have seen and experienced more in this life than you to that moment.  So, they are trying to guide you from having any of the bad experiences they may have seen or had themselves.  That is of course if they are loving and caring parents.  My parents wanted us to go to college, get a job, eventually settle down and have kids and family.  That is the American dream of sorts, but it is not all that simply anymore for Americans.  I did eventually go this route, but it wasn't that straight path that maybe my parents would have liked, it had a lot of twists and turns, ups and downs, going off the path, and returning to the path.  

The Revelation

As I was sitting on the stairs at my parents old house, after dropping out of college and kind of being lost not knowing what to do with myself.  Creditors were calling the house seeking payment for student loans which I had that I had defaulted on.  I had no job and my parents were footing the bill while I tried to find myself.  It was in this moment I realized that all my parents had been doing for us was trying to ensure that when they were no longer here to be there for us and provide for us that we would be able to take care of ourselves and stand on our own two feet.

At that moment the resistance stopped, the struggle against what my parents were trying to guide me through also stopped.  It was in that moment I found myself and understood what I needed to do.  I started back to work as a temp worker making about $6.50 an hour.  I started paying my dad rent to help pay the house note.  I paid for my own food.  Working as a temp worker was some long hours and back breaking work on Budweiser trucks or on the shipyards digging sand out of a shipping container.  I had brains enough to know that that wasn't going to work for me and my parents didn't raise a fool.  I knew I had to get back into school to get my degree like my parents had been preaching, but I couldn't get any new student loans and my dad after being burnt by me not following through the first time said no, he wasn't footing the bill.  Frankly, I couldn't blame him, nor did I.  So, I had to figure something out on my own.  I wind up deciding to go to the military as I could start paying back my loans and use the GI bill once I got out to get my degree.  

First Pivot

So far, I have said all this to say what about a pivot in mindset concerning personal finance?  I would like to say it's all  these things which happened before which would lead to the pivot in my own mindset around personal finance and my life in general.  I knew I was going to have to and was responsible for taking care of myself, no if, and, or buts about it.

Pivots in mindset to this point:

• I pivoted away from not knowing anything about how hard it was economically to make it in this world to knowing first hand
• I pivoted away from trying to have some brand name stuff to define me
• I pivoted away from low paying jobs that were not going to get me very far
• I pivoted away from avoiding creditors and started manning up to the debts I had promised to pay and started actually paying them
• I pivoted away from thinking that my parents, or anyone else needed to do something for me in order to sustain myself

So fast forward, I paid back all the creditors I owed, did 4 years of military service in the Army, used the GI bill to get my degree in Computer Science, got a job, settled down and got married, but still working on the kids part.  This was exactly what my parents wanted me to do, in addition to wanting us to do better than they did.  But how can I do better than they did, my dad worked 40 plus years for USDA and my mom did nursing and continues in nursing education to this day.  Os wants to take care of himself and his family the way my folks took care of us and I can do better by doing some things which my parents might not have the opportunity to do because it was 5 of us kids they were investing in.

Second Pivot

I was working at the time and even though I was happy to have my first job in IT, I had always told myself to measure how well I was doing by if I was able to pay my bills, save a little money, and have a little disposable income as well.  If all 3 was working, life was good; otherwise, something was broken and needed to be fixed.  At the time I had 2 of the 3 working for me; though like a lot of folks, I had money to pay my bills and disposable income, but nothing or very little was left over to save each month.  This was my level of personal finance, though flawed, it was a good rule of thumb.  

As close to as I can recollect this was around the time where I started getting more serious about my personal finances from reading books on investing in real estate, to budgeting, etc.  I can remember going to look at duplexes to buy in Houston, and I also changed jobs, in part due to my 3 pronged formula above, in order to make more money.  With the extra money I was making, I just remember wanting to get out the remaining debt which I had on my car and few very small student loans I needed to take while in college the second time.  It was also perhaps due to the thorough examination my cousin did of my finances when I was applying to get life insurance, that I saw how not so good I was doing with my finances.  It was then I learned my net worth was negative $11,000. 

Pivots in mindset to this point:

• I pivoted away from spending "all" the money I had. I would become more conscious to save more
• I wanted to get out of debt and paid over and above on payments to do so quickly with the additional money I was making.  So by this time, I was very conscious of the debt in my life and it's impact on me
• I was interested in investing in real estate and was trying to educate myself about it
• I was introduced to life insurance and its importance in a financial plan.
• I started investing alot in my 401K with the extra money I was making 
• I was thinking how can I improve my net worth from being negative, after hearing this term for the first time in my life 

Third Pivot

2006 - 2010 was kind of that get out of consumer debt, tracking spending, and saving phase so that I could invest more, time of my life.  2010 - current is kind of the time when the knowledge gained, the preparation, and the action got us on the fast track to financial health.  My wife and I had just got married in 2010 and any debt was completely paid off in that year, we were out of consumer debt and not trying to get back in it.  We live a modest life below our means in the same house I bought in 2008, had no car payments for 5 years, and now only have one, no major consumer debt, we invest in appreciating and/or positive cash flowing assets and our net worth today is $386,000 because of it.  We also have protections in place, so death and disease don't just erase all of that progress.  I have covered a lot of these topics in previous blog post, so I won't rehash it here.  You can view the links under start here to begin to discover what I have learned and want to share with you as I continue to grow.  

One other thing which I would be remiss if I didn't mention is that though a pivot in mindset concerning personal finance can change your financial outlook in a positive way, it doesn't mean everyone is shifting their mindset at the speed and pace at which you may be.  So, you may need to slow things down to ensure that you and/or other stakeholders are swimming in the same direction.  To avoid this from being a source of tension, make sure their is togetherness in the pivot of mindset concerning personal finance.

Pivots in mindset to current:

• Gaining proficient knowledge in topics such as real estate investing, stocks, stock options trading, online businesses 
• Staying out of consumer debt 
• Maximizing good credit
• Living below our means 
• Investing in assets that appreciate in value and/or produce positive cash flow 
• Working in tandem on knowing and improving our personal finance

In Closing

In this blog, I wanted to go back in time a bit and explain the experiences which I believe have led me to have a shift in mindset concerning personal finance.  If you truly want to transform your mindset concerning personal finance, you have to start where you are, but if you keep on track and empowering yourself through knowledge and understanding, you can see in a short time, it can make a tremendous impact to your long term financial health.  You too may have experienced and/or experiencing some of the impediments I had along this journey, but if you start to pivot your mind concerning your finances, the results will come.

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