Letters to my unborn kids: Money
You should know several things about your father. I have done and seen a fair amount of things before your arrival. Things that you shall see too in given time. However, I don’t want you to miss the things I have collected for you, this is why I’m writing this small essays in which I will tell you a little bit about my vision on certain subjects. I don’t want you to have shortcuts, but it will not hurt you to see how I have process and understand this beautiful world around us.
Should we start?
I have written all the subjects I want to tell you about. Those that no one told me when I was growing up. The first one I have selected is money. You will see. It can make or break a man. It will all depend on the values that I will give you and the tools and resources you carry in your toolbox.
Money means so much. It is the way in which we exchange things. If I give you my knowledge and time, you give me money in exchange (schools, psychologists, consultants, teachers or artists artists do it). If I give you a good -let’s say a TV- you shall also give me money. I spent time and resources building that tv for you, that is why I should be rewarded with money. With money you buy things. And curiously, you can also buy things with no money. Pay attention to this.
Credit is something you will hear a lot about in the future. Debt will come right after. Sometimes you will be lended money by someone else (the lender) and you will promise to pay it back with a small rate. That rate is negotiable and its up to you to get the best deal.
It might sound a little bit tricky but you will learn about it. Be calm, I will teach you given the time.
But most importantly, I wanted to tell you two things about money:
- Make it work for you
- Don’t depend on it
Make money work for you
When you grow up, you will always do it for someone else (working, I mean). Even if you start your own company, the consumer will be your boss. However, if you work in a company (like most of the people), you will be a number. Choose carefully and go for something that you trully love and matters to you. Don’t waste your time working in a place that makes you unhappy. You could invest yourself hard and be fired because of internal re-structuring. Enjoy your working life son.
So, make money work for you. First lesson, live with 50 % of your income. Live a simple life. Don’t over spend. Buy your financial freedom from the get go. In your teens, you will work for me and probably some other people. I want you to value money and see how it works. I want you to explore different small businesses and manage your friends. See how people react and behave when money is around.
So, how do you make money work for you? You diversify the income streams.
- Your job. The proper one. That one that will give you half of your salary (remember, the other half doesn't exist, it goes straight to your bank account). The famous 09:00 to 17:00
- A side company that you found and co-own: You will be smart, better than me. Once you are smart and truly know how to manage people, two things will happen: you will spot opportunities the rest can’t even think of and people will want to work for you. Grab the smartest one, found a small SRL and put this person in charge. This company (whatever name you guys give it) is already doom. You are not 100% invested on it and your partners are meant to be young and therefore stupid and inexperienced. Is fine, let it go. Learn as much as you can. If you don't learn, then you wasted everybody's time (but you should care mostly about yours). Before we move to the next one, let me give you another hint: find partners in your life. Build a strong network to rely when times get hard. Respect this partners and be fair to them Don’t cheat on them, Karma will come for you sooner or later. Go to bed in peace. Always look for your soulmate in business.
- Intellectual capital: I was a University professor 6 months after graduating. Before that, I was doing lectures in Chile and abroad. Before that, I was teaching english. As I told you before, whatever you learn, people will be willing to pay you in exchange of that knowledge. We will talk about passion: if you have passion for something, time will fly. You will be in your element and within time, you will be an expert in that particular field. That knowledge you gather, means money. You can write a book, give private lessons, teach small groups or jump straight to University. There is something that we call royalties. Read on it.
- Real estate: I bought my first real state before I was 30 and its already payed. Buy and sell. When a country or neighborhood is depressed. You go and buy assets. The misery of one man is someone else’s opportunity. Be the man that takes advantage of a crisis. Every crisis has a hidden gift. Look for it.
You see the point? If they fire you. If your company gets on fire. Or if you get bored. You can quit. You should have other money streams to support you while you find something else. If you want to give a second small company a try, go for it. If you want to be a full time professor or if you want to travel the world, then you go for it. The main thing is that you will have choices. This will buy your freedom.
Now, how do you build this?
Studying, traveling and strengthening your network. We will talk about reading and actually learning useful things. Everything that is pointless, let it go (this includes people that adds no value to your life). Study is well invested money. However, you should know now that the hunger for knowledge is something that you should always keep alive. When you go to University, do know that the knowledge happens mostly outside of the classroom, when you actually practice and practice some more. The person in front of you, only knows a tiny part of the whole puzzle. Is up to you to find the missing pieces. I will help you.
Don’t depend on the money
If you read carefully, then you should remember that I said money can break a man. It’s truth. When you get deep into debt and your income is smaller than your expenditure, then you are in trouble. Debt can become a man worse nightmare. You will see it yourself with people around you. They will get into alcohol, cheating, stealing or depression because of money debts. Don’t be that man. Don’t be the man that gives them money either. Be the man that gives them jobs. Each person has to earn his way up. As we talked before, you put them to work and help them out of the debt. If you are the one in debt. then sell your assets (that house that you bought of your computer, whatever your own).And be humble, work for the one that has saved and knows his way. Then you save again and climb your way out of debt.
I make money, money never made me.
When I was telling you about living with 50% of your income, I meant it. You can actually buy your freedom. And you do this basically don’t over spending in crap. Sure enough, if you like 2 or 3 brands, go for it. I don’t care if those brands are Maseratti, Harley Davison and Rolex. It’s fine. You should earn the money to buy them and upgrade them any time, Don’t be ashame of expending good earn money. But don’t go over the rope. Save and invest as well. You know, make money work for you. make it work hard.
I’m telling you this so you understand that 12 hour days will happen. Maybe even 15 hours journeys. Just make sure to do it in a smart way. Money will send you everywhere. Once you have bank account in different countries and buy stocks and have traders to advice you (you can focus in something else) you will see a flat world in which things can be achieved.
I have done every single thing described here. Don't let someone else tell you otherwise. You can do whatever you want. You are here to achieve things that will fulful you as a person. It is one of the biggest gifts I can give you.
I hope this has been useful. Love, dad.