I was 22 when my father passed away - and of course I wasn't ready for it. Upon his passing, I inherited a decent amount of money... and I BLEW IT! I wish like hell I had known what I know now about managing my finances. The effects of compound interest and passive income would've amassed some serious wealth, but I didn't know about that kind of stuff then.
So how exactly did I mismanage it all?
The Wedding
I was engaged at the time and we were rocky, and that's putting it mildly. We threw a beautiful celebration at a gorgeous venue for nearly 100 guests and had open bar for all! Good times indeed, but guess what - fast forward a few months and he was caught cheating and we were divorced after not even three years.
The Car, Actually The Truck
My dream vehicle was a Chevy Avalanche so I bought it. Victory red - ohhhhhhhh so pretty. Sorry, got a bit nostalgic there. I didn't like the factory rims and I had the cash, so I got a new set. I already had a car that got me from point A to B at the time that I'd already paid off, I was just greedy. That's what you do when you're foolish and act like you ain't never had shit.
Misc Stupid Shit
I didn't have any student loans (see my blog on how I got both of my degrees debt free), but I did have credit cards. Although I paid my balances in full monthly prior to my father's death, I started accumulating higher balances afterwards because… well why not? I had the cash, certainly I could afford it! I was buying STUFF, not for purpose, but rather just to have. I later learned that's how I was filling my voids.
No photo needed, it really was a bunch of dumb shit - trust me.
When we went on our honeymoon a few months after the wedding, we paid for it with what we received in wedding money from friends and family. We'd burned through all the inheritance by that point. What lavish destination could we afford? ORLANDO, FL - womp, womp. No judgement, it's a beautiful place and November is the perfect time to go, but that pales in comparison to the experience I could have had if I wasn't splurging on dumb shit prior to that. So I pretty much ended up like those lottery winners who strike it rich in the sense that I went back to being as broke as I was before I got the money.
Why do I share this? Because people still think they can't achieve a level of wealth without having some money to start with, and that's just simply not true. It is your MINDSET that is the problem. If you live your life with a "hoodrich" mentality like I did, you will continue to be BROKE! If living for the weekend is your priority rather than planning ahead, that short term mentality will keep you living paycheck to paycheck.
So what would I have done with it if I knew what I knew today?
1) Found someone trustworthy to help me manage it
This one is so key and definitely one of the biggest reasons I started this company. The financial services industry is laden with individuals filled with greed who are out to help their pockets rather than the clients that they should be serving. Finding the right person with the right direction for my money would've been extremely helpful.
2) Funded Roth IRA up to annual limit
This one hurts to think about because there would've been close to $60K in the account in contributions alone but just imagining the cumulative balance with compound interest makes me cringe! Sigh………..sigh again.
3) Saved for a down payment on my home
When I purchased my home, I had just enough to pay the mortgage. I was naively of the opinion that it was a good move just because the payment was within the means of my take home pay. While I stand firm in my belief that home ownership is one of the best ways to build wealth, I can't deny the ugly truth about what I'm paying in interest on my property…and it's not a deduction I can benefit from due to tax law changes, so it feels like I'm losing twice nowadays.
4) Saved for an emergency fund
I was unemployed for several months at one point and had nothing in savings, didn't receive enough unemployment to pay the mortgage, and racked up double digit thousands of dollars in credit card debt. As one can imagine, that time period sucked and so did the entire climb back to my mediocre status quo, but I had no one to blame but myself.
There's so much more - investing, saving for a rainy day, saving for this business venture because Lord knows it hasn't been cheap! You live and you learn though.
So exactly how much did I piss away? Well you might have done the math on it already, and you're probably pretty close if you did, but it's not really important. What the key takeaway here is how much I could've had NOW. That potential for building wealth via passive income was COLOSSAL... and I missed out. So here I am almost a decade late to the party, but I've made it finally, and I'm educating people on how not to make those same mistakes, on how to work smarter and not harder, and most importantly - cultivating their mindsets to be forward thinking, more wealth centered. I've found purpose in my dark, ignorant days of suffering. We all know folks who live and die broke and never learn this kind of stuff, so I just feel blessed to have found the light and be able to share it with others.
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