When I was 9, my parents got into a lot of trouble with money.
It was a messy chain of events that involved a lot of family members.
But it all started when my grandpa lost his job.
He gave his whole life to one company — had a pension, everything planned — and was a few years from retirement. One day he came into work and they told him, “Sorry, Mike, we’re letting you go.”
And just like that he was left with no pension and barely anything in savings at 51 years old.
Which was a bad financial blow by itself.
But when it comes to money, I’ve found that bad things almost always happen in threes.
And right after he lost his job, my aunt broke into his house, stole a bunch of money, and went on a check-forging spree.
So my grandparents bank account went from “dangerously low for their age” to in the negative.
My mom, being the truest definition of a “giver,” took it on her shoulders to fill in the gaps and make up for the wrong-doings of her sister.
So she:
- Got a loan against her 401k
- Sold our car
- Took the equity out of our house
- And started paying her parents bills again in her 30s.
As a kid, I really had no idea what these things meant. As far as I was concerned, a 401k could have been a secret code word adults used to mean “treasure map.” I didn’t know.
I just knew my brother and I went from being able to choose whatever snacks we wanted at the grocery store… to never getting a say in what food was in our pantry anymore.
And from getting new shoes every school year, to keeping them until they were a little *too* snug.
Then my dad lost his job too.
And there it was — bad thing #3.
So you can see how things started to get entangled — one problem turned into two, turned into three, until everyone was affected.
And just when my parents were starting to get out of the poverty cycles in our family history, we got sucked back in.
I also remember during that time my mom started listening to these tapes from a “financial coach.”
She’d play them in the car whenever we’d drive anywhere, a constant reminder of how broke we were. I hated the sound of the man’s voice — so smug.
I also remember listening and thinking my mom had made every mistake in the book.
He’d say things like:
- “Never take a loan against your 401k.”
- “Don’t take the equity out of your home to pay for your current lifestyle.”
- “You have to put on your oxygen mask before you can help others.”
OMG — what rule hadn’t she broken?
And I remember one day, our “coach” shared an eye-opening exercise.
He said,
“Add up all the money you’ve made in your lifetime — from the time you started working to today.
Got it? Now compare that number to what you have in your savings.
Are you capturing more or less money than you should?”
I asked my mom, “How much money have you and dad made?”
My mom paused, doing the math in her head. Both my parents had worked since they were 16. And they were forced to “become adults” a little quicker because I wasn’t a baby they planned to have.
“Well, I guess your dad and I have made over one million dollars.” She said with a proud smile.
“Wait — we’re millionaires!?” I couldn’t believe it.
“No sweetie, we’re not even close to millionaires. We’re barely thousandaires. That’s what we’ve made. We haven’t saved nearly that much.”
My heart sank a little.
Now, it’s easy to reflect back on these events and think my parents were being so dumb, so silly.
But now that I’m older, I know the world is much more nuanced and rarely black and white.
It’s easy for some guy to record a tape that says “put on your oxygen mask before you help others.”
It’s much harder to look your 51-year old father in the eyes, see him struggling to put food on the table, and not cut him a check.
It’s also very hard to break the cycle of poverty that affects so, so many of us.
Look at my mom — she was doing everything right! — and a few bad choices almost wiped her out financially.
And look at me!
I was so scarred by those events in my childhood that I constantly stress about money to this day.
Even though I’m doing well for my age, I’m not going to lie to you and say I don’t constantly think it can disappear overnight (like what happened to my parents).
Hell, I even majored in finance in college because of all this!
Do you think I just loved studying financial derivatives?
OF COURSE NOT!
I think, deep down, I wanted to insulate and protect myself from what happened to my family.
Over the years, I’ve developed 7 Rules of Money. These 7 Rules of Money have helped me save more, earn more and put my money to work smartly.
Want to see them?