004. If only I had known better about money before

Today I am going to be vulnerable and speak openly about the anger that comes once you learn about money and look back at the decisions you took in the past and realize what a different present would it be, if only you could have taken different decisions (and know then what you know now).

As painful as it gets, I am going to nummerate my financial mistakes (and hopefully you can learn from them earlier than me):

1. Spending on designer items while having zero wealth is a losing game.

   When I started having a salary in my first job, I wanted to get fancy things. The latest phone (a blackberry at that time), a designer bag, a luxury car. Yes, I got all of that and I was looking very good, I have to say. However, I could not see, how I was waisting my money trying to "look" rich, instead of actually creating wealth.

2. Priotizing saving instead of taking action to invest.

   To be honest, once I realized I literally wasted a decade of having generated thousands of dollars on compound interest I got really angry. If only I had invested the money I put aside to my bank account with so much discipline, this would be another story. Those "unearned" dollars are the cost I phase (and everyone elses too) for not having financial literacy. We miss so many opportunities that we dont even know they exist because the lack of financial literacy hinders us to see them. 

3. Putting all my money in one place, a house to live in.

   Back in the days, coming from a middle-class family, I learned that success in live came with purchasing your own house. That would be the BIGGEST investment of your life. So, I followed the "rules" and put all my money, let me clarify here: ALL MY MONEY in buying a house, which not only violates the diversification principle of investments, but also it was a "dream house" meaning, it was way more expensive that I could afford. It was so expensive, that it remained quite empty inside, no money for furniture. Now I know there is a term for this, it is "house poor". When you put all your money in one place and then struggle to have a confortable life because you have a huge payment on your mortgage. Now, I have a very different approach to real estate, which of course, does not align at all with my decisions from the past. I learned that a house to live in is a liability actually, because it does not make you more money. On the contrary, to an investment property to rent, which you can rent and receive income from it, which can help you pay back the mortgage. Have you heard that multimillionaires tend to live in rented places? That is because they do not want to lock their cash in the place where they live, but to invest it instead where it generates more cash and make them even wealthier. We were sold the idea that we need to own a house to be successful, now I really believe that this is just a strategy to have you locked in debt for decades, therefore, having the need to have a job to pay back that huge loan. 

4. Thinking I knew what I was doing with my money

   I have always considered myself a person of excellence. Meaning, I give my best in every action I take, because I made that part of my personality. This was no different when it comes to money. I thought I was being very responsible saving a part of my paycheck every month. I saw the account growing and that felt right. However, a quiet voice in my head always questioned myself, what do the super rich people know that I dont? Back then, the information was not available to me (or I just did not have the curiosity to find it), so I kept doing what was considered "right" by my circle of influence back then (family & friends). Also, money was considered a unconfortable topic, so it was not openly discussed, which kept us all in the same place.

5. Delegating the responsibility of my financial situation

   I did not feel the need to make myself responsible for my money. I was used to be taken care of, by my parents, and in the future, it would be part of the responsibilities with my partner, and I would stay at home to take care of the kids. That was what I grew up thinking. This was the perfect formula for financial crisis. I did not use to think about money much. I thought it would somehow work out. However, now I know that wealth does not come by luck, it comes by intention and strategy, having clear actions to take and taking them on a consistent basis.

6. Thinking money was superficial

   Even though I never have anything against wealthy people, I used to consider that thinking about money was superficial and a wrong thing to do. How come? This was the idea that I repeatedly heard in the circles I moved in and the media I feed my mind with (TV, magazines for example). As I consider myself a good hearted person, I kind of removed the money topic from my "priorities" to pay attention to and decided to focus on other things. Now I can see that money is really important. Still not the MOST important thing in life, but definitely makes a difference in areas that are really important like peace of mind, comfort and opportunities. Thinking intentionally about money does not make you a "bad" person. The other way around, being financially abundant allows you to give more to the areas and individuals you care about, including yourself.
7. Stay in Analysis Paralysis It is no secret that I am naturally curious about personal finance and how money works because of previous experiences I lived in my childhood (maybe will touch that sensitive topic in another post). So I started reading some books about personal finance just for fun when I entered the working world. However, this knowlege stayed in that, only knowledge because I did not take it to action. What stopped me to act? Mainly fear, because I was about to do something that I had never done, like investing, and it felt scary. What if I lose my money that I worked so hard to earn? The media did not help either with those alarming news about the stock market falling and announcing people losing millions. OMG, I did not want to be one of them! This fear led me to lose a decade of potential earnings, A DECADE! It is ridiculous! Now I see back and I realize I was only missing 2 things: 1) an environment that made the topic of investing in the stock market feel natural (e.g. others doing it and talking about it openly in simple english without fancy terms) and 2) Knowledge to build my own investment strategy to increase the probabilities to the max to continue generating earnings despite the temporary ups and downs of the market.

All the above are things that now that I am financial literate, feels painful to look back and see how I could have taken different choices, only if I had had the knowlege of financial literacy and the environment that made me feel confortable with investing with confidence.

Hope you can take something away from this blog post where I let you in a vulnerable area of my financial journey.

See you in the next post.

If you have comments or questions I am one DM away at @doloresgavino

Dolores Gavino

Female Wealth Builders Founder

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