5 Valuable Lessons From My Financial Mentor

5 Valuable Lessons From My Financial Mentor

From reading posts from many of my fellow Personal Finance (PF) bloggers it occurred to me how much of the drive in achieving financial freedom has been influenced by having role models in our lives. While some might say they’ve stumbled upon the PF community just by chance or by a desire to live life in a completely different way I would like to believe that if you dig a little bit deeper you’ll find that your interactions with key individuals played a major role in shaping who you are and what you’re striving to achieve.

Before I get ahead of myself navigating through my own experiences and lessons learned, let’s take a step back and start with the definition of a key word … mentor and/or mentorship.

What is a Mentor?

According to Wikipedia, a mentor is a “more experienced or more knowledgeable person who helps guide a less experienced or less knowledgeable person. The mentor may be older or younger than the person being mentored, but he or she must have a certain area of expertise. It’s a learning and development partnership between someone with vast experience and someone who wants to learn”.

The balance posted a great Guide to Understanding the Role of a Mentor. I particularly enjoyed the fact the author emphasized how this partnership is a two-way street built on trust in which both the mentor and mentee have specific roles and responsibilities to make the mentorship experience an effective and successful one. I’ve played the role of a mentor and mentee and my take on each boils down to:

Mentor - Mentee

Coaching is another term that resonates with me; however, I think it’s more relevant in the context of managing teams. A Guide to Understanding the Role of a Mentor also lays out the differences between mentoring and coaching which primarily relate to time. Mentoring can be thought of as a long term relationship whereas coaching is typically a relationship of finite duration.

What About a Financial Mentor?

Instead of providing a definition of a Financial Mentor (FM) I think it would be better to identify specific behaviors an FM should exhibit to deserve such a title.

  1. They model the way and lead by example allowing their actions and financial accomplishments to speak for themselves.
  2. They inspire others by being living proof of what is achievable and attainable.
  3. They challenge the process and oppose to take everything at face value.
  4. They keep learning because they recognize change is inevitable.
  5. They focus on continuous improvement to maximize efficiencies.
  6. They educate others because they simply care.
  7. They build trust because that’s a foundational element of any type of relationship.
  8. They ask questions because they need to know the why.
  9. They are goals driven … no goals no glory.
  10. They will set expectations and will hold you and themselves accountable.

When you put all these things together how in the world do we find individuals that fit the above criteria? … Not easy right!

You could say that Warren Buffet has all 10 and perhaps more but how many Warren Buffets are out there just sitting and waiting for you to engage?

Having said that I truly believe you should focus on the specific core values that are important to you in order to identify someone who could potentially become your financial mentor.

My Financial Mentor

At this point, you might be wondering … ok, enough blah blah blah and tell me more about your FM? and what have you learned from this person?. The answer is pretty easy … my parents are my financial mentors. Not only have they helped me become the man I am today but have shared these 5 key valuables lessons:

1. The value of hard work

As you may or not know I’m from Venezuela and moved to the US when I was 27. My sister and I were privileged in terms of having awesome parents that wanted the best for us. My parents were raised in low-income environments that taught them the value of hard work and the difference between wants and needs. They followed that same approach and made a big effort to help us understand the relationship we should develop with money. I still remember my dad saying “money doesn’t grow on trees you have to work for it“.

As kids, we obviously wanted everything we came across. My parents implemented a rewards system driven by requirements or you could think of them as goals. All we had to do was behave, help with chores around the house and get good grades. I remember things like washing our cars (or relatives), painting during the holidays, taking out the trash and other chores around the house.

You might be thinking … man your parents really took advantage of you; however, I don’t feel that was the case at all. On the contrary, I strongly believe it was an excellent way of building character and appreciation of hard work. Even though we always had help around the house, my parents taught us not to take advantage of the situation and to continue to collaborate as appropriate.

Today, we live in a crazy world where “entitlement” is all over the place. I see parents giving everything to their kids even when in presence of unacceptable behaviors that don’t deserve any type of recognition. I’m the father of a 3-year-old and it’s my responsibility to lead by example and to try to influence positive conducts to improve my kid’s relationship with money. He’s still a little kid but we’re trying our best to teach him similar concepts both my wife and I learned when growing up.

2. The value of saying NO

The New York Times wrote an article that discusses why To Raise Better Kids, you have to say NO. I’m pretty sure my parents did not read it because it was published this year :); however, it seems like these concepts back in the day were common sense that came naturally to most baby boomers.

As I previously mentioned, my parents had a system to reward positive conducts. When the opposite was true, they did not shy away from saying “NO” especially when in public settings. Don’t ask me why but we did not scream, threw ourselves on the ground and caused the wrath of the century.

For some reason, we knew how to tolerate disappointment, frustration and delaying gratification. Looking back, I really admire the courage and discipline they had because as a parent, I know this is not always easy.

Today, we try to say NO to our kid when appropriate. For instance, every Sunday at our church a family sponsors donuts at the end of mass. Our little guy loves donuts so we are ok with him having one ONLY if he behaves while in mass. When he doesn’t, we leave and as he starts crying we tell him the reason and the consequences. Watching my kid cry crushes my heart but I believe this is something I must do for his own sake.

3. The value of staying out of debt

Back home our society is different in terms of limitations that exist for buying stuff on credit. Even though credit cards were available my parents used them carefully and in most cases paid them in full because they hated owing and throwing money away in the form of interest. This same sentiment was definitely passed on to me because I feel the same way about debt.

I’m fortunate to have lived in a society where getting into debt was not as easy as it is in the US; however, our reality has changed so we need to remain disciplined to avoid falling into the many temptations we see all over the place. I believe we are currently in good shape (mortgage and our car) but we must stay vigilant and avoid complacency.

4. The value of saving and thinking long term

My parents believed (still do) in saving for the future. Ever since I was a kid I remember being told the same thing over and over again …

“Son, when things are going great that is when you should be saving the most because you don’t know when things are going to go bad

This basically meant taking advantage of the highs by saving as much as humanly possible to be ready to navigate bumpy roads.

I have vivid examples of how my parents were able to leverage this lifestyle that came handy when in presence of stressful events.

Believe it or not, I was fascinated (still am) with the idea of saving and just having a ton of money. My dad helped me open a bank account in the US while still living in Venezuela and I started saving everything I could. From the age of ~ 15 to 24 I had some side hustles and internships but once I started working at the age of 24 that’s when my savings grew exponentially to almost 80% of my income.Living with my parents certainly helped; however, I think it was also the determination to see my numbers grow.

By the age of 27, I had accumulated a very nice nest egg in the 5 digit range living in Venezuela. This effort was fundamental in helping me cover for expenses when pursuing graduate studies when I moved to the US in 2007.

These days, I have a full-time job and my desire to save as much as possible has not changed one bit. My parents sometimes give us a hard time because their perception is we limit ourselves too much but that is not the case. We are strong believers in paying yourself first and letting our decision-making process be influenced by our personal goals, needs and the desire to invest in experiences that bring happiness to our lives.

5. The value of entrepreneurship

My dad worked in the pharmaceutical industry for ~ 20 years. For various reasons, he decided to step out and start his own company when he was in his 40s. We were pretty young at the time (in our teens) but I still remember my mom supporting him all the way in spite of the fear of the unknown.

My dad started one company and he did well for some time. I was actually an employee but It was more volunteering that an actual job (I never got paid but I was ok with that). At the same time, he took additional risk and started a 2nd company. That new venture was not successful and he had to shut it down. He then started a 3rd company that did pretty well.

A new opportunity emerged somewhat unexpected and he decided to start a 4th company. This one required almost all of his time so he had to shut down his first company and ultimately sell his 3rd. This very last company was really successful and is the one that took him all the way to retirement.   

As I mentioned, I work full time and love what I do; however, my parent’s perseverance, teamwork, discipline, business mindset and having the willingness to take risk and never give up on one another are behaviors that have my utmost respect and admiration.

Wheather I follow a similar path or not is to be determined. For the moment, I continue to create multiple sources of passive income and only time will tell If the opportunity comes to start my own gig at some point in the future.

Final Thoughts

  • I’m proud to say my parents are my financial mentors but today the mentorship role switches back and forth to take advantage of our learnings and to be a resource to one another where and when appropriate.
  • Discovering the PF community has brought a ton of learnings; however, my parents did a phenomenal job teaching me the fundamentals … save & stay out of debt.
  • I encourage you to either seek a financial mentor or be one to someone else that you care about.
  • Mentoring is something I’m deeply passionate about but I truly believe you need to let potential mentees come to you instead of the other way around.
  • One day I hope to become a financial mentor to my kids. The relationship I have with money is something I want to pass on to them and I’m ready for the challenge.

Until next time … JJ

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