12 things I learned about money far too late in life

Money is a store of the time you spend at work.

While you’re spending time at work, you’re apart from your family.

Many people misunderstand what money is. They get caught up in what money can buy them or how money can make them feel. When I think of money, I think about what I had to give up to deposit dollars into my bank account. When you get one thing in life you give up something else. The thing you often give up for money is your time.

When I chat to a future billionaire entrepreneur, I know they had to give up a safe career, perhaps a house, and most likely time with their family.

I learned about the point of money far too late in life. Here’s what I wished I knew about money much sooner that will help you experience a level of freedom you didn’t know existed.

1. Who you are before the money is everything

Money elevates your character.

Work on your character before you work on your ways to make money. The reason is that who you are while you’re making money determines who you will attract into your life.

You’ll attract people who can help you make more money when you’re a half-decent person that is humble, nice to talk with, and willing to change your beliefs when you receive new information.

Money flows in your direction when you treat people ridiculously well. Without people, there is no money.

2. A jerk with money is the worst kind of human being

Go on a dinner date with one of them.

Before you’ve finished your $100 steak and chips you’ll be dying to evacuate the restaurant and wipe the disgust off your pretty face.

I was that asshole. I was the worst kind of human being. I was the guy that would spit on a charity trying to raise money for a good cause. I was the guy that would salary shame anyone earning below 6-figures and call them “lazy.”

I had to lose everything to learn my lesson.

You don’t need to do the same. You can throw away the asshole way of life. How much money you have isn’t a status you flash like a Rolex watch.

Put your financial status away.

Replace status with curiosity, imagination, and a willingness to listen to people’s stories despite how much money they have or will have.

3. Money can multiply itself without you

I used to think if I wasn’t working then I wasn’t making money.

I was always working to make money, and I had no idea why. The making money treadmill was exhausting for a skinny guy with undiagnosed, severe mental health problems. It doesn’t have to be that way.

Lu Kang on Twitter posted this:

My 3 month old son said: “Daddy, I don’t need a PS5. Use that money to buy land, or get an LLC started in my name”

Now clearly he is joking because his son can’t talk at three months old. But the financial lesson is powerful.

Buy things that have real value and make money while you sleep.

4. An hour a day spent learning about finance can save you a lifetime of work

A financial education can help you make money without you having to do anything. What you know about money determines how much time you spend having to make it.

Money is a representation of your purchasing power.

What if understanding your purchasing power was the answer to your goals, not working harder?

That’s what happened to me. When I took the time to understand basic economics, money printing, and how different types of assets work, everything changed.

Spend an hour a day learning about finance. Or start with an hour a week.

Every hour you spend learning about money is another hour you don’t have to spend making money.

5. Money can do a lot for other people

“The problem with money is you think it’s about you.”

That’s the one thought that completely changed my entire financial future. I learned that money wasn’t about me anymore.

Money was about what I could do with it to help other people. That’s why I became a teacher. Setting up a group chat full of students who wanted to learn from me was one of the most rewarding things I’ve ever done.

It had nothing to do with money. It had everything to do with community.

Community makes us feel like we belong to something much bigger than ourselves. It feels better than the tiny goal of acquiring money to buy stuff we don’t need.

6. Money can be a measurement of your level of generosity

Billionaires don’t impress me much.

As I’ve become a 30-something man with a couple of grey hairs, I’ve become obsessed with generous people.

I like the silent generous type.

A guy I work with is one of those people. At the start of the pandemic we went to buy some bottles of water for an event we were hosting. We were days away from going into lockdown. Everybody knew it.

He had the foresight to understand small businesses were going to do it tough. When it came to choosing the shop we’d buy the bottled water from, instead of choosing a multinational supermarket, he chose the tiny cafe with two employees who were about to face the biggest financial battle of their life.

I stupidly said “but their water is the most expensive.” He said “that’s the whole point. Every tiny decision we make has a ripple effect and this business needs us right now.” Suddenly, I got the message.

Price can be measured in the number of bottles of water it buys you. Price can also be measured in the difference you get to make to the lives of complete strangers.

It was one of those lessons that almost brought a tear to my eye when he explained it to me. I found it hard to keep it together and protect my manly, tough guy act. What was about to happen to our country because of the pandemic was overwhelming. This tiny moment made me understand my role in the financial system.

Money you spend has enormous ripple effects.

7. As fast as you can make $1M you can lose everything

At 26, I was part of a successful business. Employees twice my age used to walk into my glass fishbowl office and try to stir me up.

“You’ve got everything at 26. It must be a dream,” they’d say. I would tell them that as far as you can make a million bucks you can lose everything.

It hadn’t happened to me and I don’t know why I said it. I guess my consciousness predicted what was about to happen. Shortly after, that comment became true. I lost everything.

It’s a fast ride to the top of the money ladder. It’s an even faster ride down if you don’t lower your ego and understand what money is designed for.

8. Money helps you stress less

Always chasing money is exhausting. Debt brings about enormous stress.

The point of money isn’t to get into lots of debt. The point of money is to buy back your time so you don’t become a slave to debt and do work you hate to make your debt repayments.

Debt repayments make you a slave to money.

Use money to lower your stress, not increase your stress with more debt.

9. The value of money changes over time

$1 today isn’t the same as a dollar tomorrow.

Money issued by governments decreases over time. The house you hear about that went up three times in price didn’t go up at all. The value of the house measured in traditional currency just went up because of inflation and money created out of thin air by governments.

10. Patience helps you make better financial decisions

The people I’ve seen personally go bankrupt all tried to get rich quick. They kept jumping from one idea to another, searching for a pot of gold. Their goal was money, not doing the work.

“Choose a job you love, and you will never have to work a day in your life,” says Confucius.

Quiet, patient work you do over 5+ years will make you more money than you could ever hope for. Do the work and be patient.

11. Careful risk management creates millionaires

There are good times and down times. 2001 was a down time when the dot com bubble burst. 2008 was a down time when banks nearly collapsed and we faced a rough, prolonged recession.

In between these down times people can get rich. But it’s not whether you get rich during the good times. It’s whether you stay rich during the down times. Mostly, that comes down to risk management, which is your ability and the discipline to diversify where you put your money.

I read an article today of a man who has just gone all in on Amazon stocks. He didn’t bother to do the research. He didn’t notice the founder, Jeff Bezos, cashed out a lot of his shares recently. He didn’t look at the PE ratio to see if Amazon shares were overvalued. He just bet his life savings on a company he knows nothing about.

Risk management is understanding what you’re buying and not putting all of your savings into it despite the hype.

Big bets ruin you financially.
Small diversified investments allow for the inevitable downside.

12. Have your money stolen

“Hey so you haven’t returned any of my calls and that doesn’t make me feel very good about giving you all my money, so if you could please give me a call back today that would be great. Thanks.”

Writer, Nicoles Cole, admitted in an article that as a 19 year old he had money stolen from him. The admission could have made him look silly. But actually, it didn’t. Getting robbed at 19 taught him how to spot con artists.

Cole can spot a liar from a mile away. You could argue the scammer who stole his money was the one that got short-changed.

Once you meet a bank account robber and give them access to your money, you’ll never do it again.

I met a guy in a dark parking lot when I was 16 years old to sell him a Nokia mobile phone I knew was stolen. As I handed him the phone through his car window, I waited for him to give me the cash. Seconds later he drove away as fast as he could, which is why he wanted to do the transaction from his car window.

Dishonesty leads to financial loss.
Trustworthy people make a lot more money.

Understanding money is one of the many answers to your problems that most people learn far too late in life. With time and less stress you can be a lot more effective in life.

When you realize money changes who you are and your ability to affect other people, your entire world changes. You stop trying to stack up assets to make people you don’t like at dinner parties be impressed by your latest purchase.

The best financial purchase is one that creates a ripple effect in the lives of others. Use money to create tiny ripple effects.

Use your life to pay it forward to someone who can’t pay you back.

This article first appeared on Medium.

This article is for informational purposes only, it should not be considered Financial or Legal Advice. Consult a financial professional before making any major financial decisions.