I would characterize my current relationship with money as pretty healthy. In general, I come at it from a place of abundance, I have a written financial plan, I spend intentionally, and so on.
But this current relationship only goes back about 14 months at the time that I am writing this post.
Before that, I had a very unhealthy relationship with money
I had a 100% scarcity money mindset. I didn’t know that’s what it was called at the time. But I believed that any money transaction was zero sum. And if I wasn’t gaining, I was losing. And most of the time, I was losing.
We had a 0% savings rate. I didn’t know how to invest. Even more, I did not understand why we needed to invest.
Money scared me. And it intimidated me. Honestly. There is no other way to characterize it.
I would be scared to check out bank accounts. So, I would make Selenid do it. I didn’t want to face up to how bad the situation was, which was pretty much always worse than it was in reality.
I ignored my student loans. Basically, I just closed my eyes and deferred them once a year for each of my 7 years in training. Seeing just how big the number was freaked me out.
The Wrong Way for Doctors to Think About Loans
Facing my mistakes money-wise scared the sh*t out of me.
Further, I carried a huge limiting belief about money and finance
I told myself that I sucked a money. Just wasn’t good at it.
Why did I tell myself this? Because I had made mistakes with money. And these mistakes are now well documented!
- The Top Finance Mistakes Of Two Physicians
- What I Did (And Am Doing) To Fix My Financial Mistakes – Part I
- The Top 10 Financial Mistakes (and Errors and Blunders) That I Have Made – Part I
- The Top 10 Financial Mistakes (and Errors and Blunders) That I Have Made – Part II
I had also made mistakes in my medical training. But somehow aI had no doubts about my abilities to become a great doctor. But I was 100% certain that I couldn’t do money.
Thankfully that all changed
For a recap of exactly how this all changed, check out the story here.
But, for brevity sake, suffice it to say that Selenid and I put in a lot of mindset work as well as committed ourselves to our financial education.
Our relationship with money is now healthy. But we always are looking to improve.
I was reflecting back on this big change recently though and it made me think…
Like most things, my past had a big influence on my relationship with money, now and before
This is not something that I have fully fleshed out before writing this post, but it makes a lot of sense to me.
My childhood and developmental years were awesome. I grew up as what can only be characterized as middle to upper middle class. I had and have a very loving family and great friends.
But the relationship of others around me with money was…complex.
When I was young, like less than 10 years old, everything seemed really peachy. My dad worked for my maternal grandfather who owned a company that sells compressors. My mom stayed at home raising me and my brother and sister.
We had a big house in a fancy neighborhood. They drove really nice cars. We went to private school. It was a super sheltered existence. Money was easy. It didn’t seem to be a problem.
When I was about 10, my parents split up. I don’t begrudge this. They are better apart and still have a pretty good relationship today. But at the time, it obviously sucked.
Due to this divorce, my father no longer worked for my grandfather. He took another job with less income for sure. I believe there was child support, but my mom also now had to find a job too.
All of a sudden, and it really was all of a sudden especially in the eyes of a kid, money became a real issue.
The pockets tightened. Don’t get me wrong, we were fine. But it was different.
As a kid, it feels like the rug got slipped out from under you a bit. You don’t always understand.
And it was money’s fault.
So, it’s no surprise that my initial relationship with money was super unhealthy!
I am the oldest child in my family. During these challenging years, I caught wind of a lot of my parents’ concerns about money, whether directly or indirectly.
Talk about losing the house. Worrying about needing to change schools. So and so is spending too much. We need to cut back.
I learned that not having money caused problems. And that even when you had money, you could never be quite sure if something wasn’t waiting for you right around the corner to screw it up. Money was scarce…gotta hold on tight. Even then, might not matter.
My parents had to have the difficult conversation with me that there were no savings to help with my college expenses. I had to decide to go to the school I really wanted to, but pay in mostly loans. Or go to a state school.
Those loans then haunted me for a long time before I finally faced up to them and came up with a plan to pay all $450k off in 5 years or less.
Revealing My Secret Strategy to Pay My Huge Student Debt
But my past also taught me some money lessons that helped form my current relationship
For awhile, my parents did have good money. But their relationship was not healthy. (I’m really speculating from my experience here but still…)
They fell into the classic trap of most high income earners. It was felt that high income = high wealth = high net worth. But we know that this is not how it works.
That’s why there were always fancy leased cars in my garage but no college savings.
5 Smart Ways to Pay for Your Kid’s College
And look, I do not at all fault my parents or am writing this as some form of complaint. Like all of us, they had little to no personal financial education. At the time in their lives that I am talking about, they were the age that I was in medical school. Who the heck knows what I would have done with any semblance of a high income as a 26-year-old!
But, I did learn from this experience
I learned that it’s not really money that can be taken away at any time.
Dependent income (wages, salary, etc.) can be taken away at any point. Look at doctors during COVID for example.
If you have a high net worth or are financially independent, income doesn’t matter as much though. I realized that’s how you win the game.
It’s independent income.
And that is why Selenid and I formed our plan the way we do. It’s why we have a 43+% savings rate. It’s why we scrimp and save despite our high income so that we can buy cash-flowing rental properties.
Our income has only two purposes:
- To be spent intentionally to bring us joy, and
- To be converted into wealth, the only currency that can buy your time
If we are paying for something that doesn’t accomplish one of these 2 things, it’s not worth it. No matter how low or high the price tag.
In the end…
It’s just like anything else. Some people, myself included, have worried that the past defined us. Thankfully, I have proof that that is not true. But, the past is full of lessons. And it’s learning from those lessons that breaks us free from the past’s definitions of us!
Looking for some more to read about mindset and money? These may be for you!
- Working Less is Worth Every Penny!
- The Sushi Wealth Test: Do You Pass?
- Doctors and Dollars Episode #5: Brain Tumor and Balance
- Love Your Job? Why You Should Plan for FIRE Anyway
- Sorta Random Sunday: You Need A Who Not How
- Sorta Random Sunday: It Takes 66 Days to Make a New Habit
What do you think? How did your past shape your relationship with money? Has your money mindset shifted throughout your life? Let me know in the comments below!