LET’S TALK MONEY…. RECESSION, OBSESSION, OR OVERALL TABOO TOPIC
At 45 years old, and having lived in the rural state of Maine and metropolitan Los Angeles for prolonged periods of my life, I have had the opportunity to meet people from all walks of socioeconomic backgrounds. I have witnessed how people responded to the recession in the late 2000s, myself included. I continue to observe family members and childhood friends in New England who live with a “scarcity mindset”, despite being comfortable financially, while my friends and colleagues from Los Angeles and Miami (who came from modest financial upbringings) live with growth and opportunity mindset and act aggressively with their finances.
I was raised to believe that talking about money was taboo. In fact, to this day my family will act uncomfortable if I talk about money too much or ask them how they invest or grow their money. Money is not something that is openly discussed in my family. On the opposite spectrum, my in-laws, and entrepreneur friends and colleagues, discuss money issues all the time. When I am with them, we talk openly about personal financial issues, business finances, investment opportunities that have worked or haven’t worked, new financial opportunities, and everything in between. We discuss money issues openly in an effort to learn from each of our mistakes, or successes, and we do not consider money a taboo dinner conversation topic. To us, it is like discussing health or fitness goals, lifestyle goals, or career projects. Most of us grew up playing board games like “Monopoly” and “Life” in the 1970s 1980s and 1990s so why is it considered taboo for some people to talk about money as an adult in 2022? To this day “money mindset”, and its taboo reputation, is something that I find very intriguing.
When I study the behavior of my friends and colleagues who have achieved financial freedom (and who started out without generational family wealth), I notice common patterns.
Here are 10 of the most common traits that I have witnessed from people who have a personal net worth of multi-seven figures, started with very little, have ridden out recessions and failed investments, and continue to thrive financially:
They pay attention to their money, they know their bank account balances and monthly budgets and clearly understand the importance of managing “cash flow’.
They are not afraid to talk about money and usually talk about it openly and regularly with friends, family, and colleagues.
They understand basic tax laws and have an experienced CPA on speed dial whom they speak with regularly to help them make tax-advantageous financial decisions.
They take risks with their money, in some cases massive risk. They understand that sometimes risky investments succeed and sometimes they don’t. A “failed investment” does not stop them from continuing to invest aggressively or invest “outside the box” in the future.
They continue to invest during economic downturns and recessions.
They have a CFP (certified financial planner) but in most cases, traditional investments are not where they have built their real wealth.
They are not afraid of debt (good debt) and understand how to leverage debt for growth regardless of interest rates.
They are open with their significant other about their financial goals and both parties are on the same page working towards the same financial goals.
They contribute to charity and other organizations on a regular basis.
Their political views may lean left or right, and wealth is not “party dependent”.
It took me a long time to see myself as one of “them”. To finally be comfortable talking about money; to be comfortable with investments that didn’t work out and still be comfortable to continue to invest in new opportunities; to create Excel worksheets and Quickbooks tools that track and monitor my personal budgets; to acknowledge that despite growing up with money as a taboo topic, at 45 years old I have had more “wins” than “losses”, and the choices that I have made have led me to a level of financial success that I am proud of. My path of wins has been primarily in my real estate investment choices getting a strong handle on my personal budget and managing personal cash flow. I started investing in real estate in 2003, well before the recession of 2008. Since 2003, I have had short-term rentals, long-term rentals, real estate partners, and local management companies, and even tried my hand at a flip. I have invested in different geographic regions. I have invested in different economic conditions at different interest rates. I have had wins and losses with real estate, and other investments, but fast forward 19 years, and I can see now that my financial success and level of financial freedom have come from my actions of investing my primary employment income early and in the right real estate, which has led me to my current level of financial comfort and freedom.
If you do not have a good handle on your personal budget, that is the first place to start! Understanding your budget is the first step to being able to assess how you can diversify your investments and make “room” for more investments. Check out the budget tool that I created for myself a few years ago to help me get a handle on my budget and manage my cash flow. This tool allowed me to see in black and white money coming in and money going out. I learned where my money was going and what changes I needed to make in my life to allow me to stop living paycheck to paycheck and allow me the ability to invest aggressively in both high-risk and low-risk investment opportunities. This tool allowed me to see that I needed to make some major changes in my life to be able to invest at a higher level, a level that I knew I needed if I wanted to reach financial freedom in my 40s. This tool is what led me to make big decisions like downsizing my 4000 sq ft Calabasas California dream home and cutting back on car payments so that I had more cash to invest in my start-up company, real estate across the country, and other long-term financial investments.
Download my tool for free and learn your “numbers” and your cash flow! Set some investment goals for yourself and evaluate where you need to make small or large changes in your life to reach those goals. If you are able to invest at a new level now, you can look forward to living your life on a MUCH greater level of financial freedom in 10-15 years or less!
Come follow along with me to learn more about my journey building wealth through real estate, and how my husband and I will navigate the current economic uncertainty. If you still think money is a taboo topic and you are afraid to talk about money, or take any financial risk, check out one of my favorite books “Rich Dad, Poor Dad” by Robert Kiyosaki!