I grew up with no financial education. The little I learned I picked up from overhearing family or friends talk about how little money they had or who they could reach out to lend them money with a high interest rate. They both were from impoverished families from Puerto Rico. My dad studied rehabilitative counseling, and my mom was a registered nurse. My parents were recently married and already had my brother when my dad received an offer to move to Connecticut to work in the prison systems. My dad jumped at the opportunity, and they left Puerto Rico, this was back in 1974. I was then born in the US, and my mom decided to begin working in the VA administration as a registered nurse.
After spending many years working, they saw a business need in the community and began to open grocery stores and multiple businesses catering to Hartford’s Hispanic community. This is where their journey into rental properties began, and they acquired 6-unit apartment buildings and other types of commercial and multi-family unit apartments. My parents should have been doing well and they produced more than enough money to be financially successful by the world’s standard but their reckless spending was one of the biggest hindrances to their wealth creation.
Money was their only goal at all times. It was not spending time with family or trying to better themselves. They only wanted to make more money and spend more money. No matter how hard they tried, they could not keep the money they made. My parents did not obtain wise counsel regarding their finances, and in a matter of a few years, they went from earning a quarter of a million dollars every year to nothing. Booze and women got in the way, and the money just magnified the reckless life they lived. My mom tried to hold on but, in her own dysfunctional way, made things worst. She also had a family; whom depended on her for everything, including financial support, which made things worst. It truly was the most dysfunctional family dynamic I have ever seen in anyone of my friends. Needless to say, when I went off to college, I had no money and no way to pay for college. I decided to quit college and served in AmeriCorps for two years while I figured out my next steps. During my college days, I met my ex-husband, ended up having three children, got divorced, and the cycle continued until 2016.
Now as a small business owner I can easily identify where my parents made their own financial mistakes. Their initial mistake was not living on a budget. This is important since it is critical for any business owner to understand the money coming in and what money is going out and where. Their second mistake, they didn’t hire a bookkeeper. This is critical if you are unable to manage your own finances then you will need to hire someone to manage your finances. Lastly, it was their mindset. They were living as if the money would never end. This way of thinking is what devastates most people financially. You never prepare for a rainy day because you believe the finances will be there when you need it and nothing will ever change. Many have learned this difficult lesson in 2020. If you did not have a financial plan in 2020, you have learned the hard lesson that planning for a rainy day is a necessity. Most Americans have no financial plan. An overall financial approach by saving, eliminating debt, and investing. This three-prong approach will make your journey successful.