I’ve lived by the, “Save early, spend later,” motto, influenced greatly by my pragmatic mom, since I first began earning money at a young age. My first job was to babysit and referee hockey games. I then moved on to fast-food restaurants and eventually started my own car washing and cleaning business.
Every step I took taught me something about delayed satisfaction: I could spend my money on sports equipment or video games. Or, I could put it towards my future. I chose to do the later.
In my early teens, I took all of the money I’d earned and put it towards a down payment for a condo. I learned a lot from that decision, and other examples about managing and saving money. They’re key lessons that everyone can use to achieve long-term financial security, and the good news is that it’s never too late to learn them.
Making My First Investment
My hometown, Vancouver, was experiencing a boom in condo sales when I was 14 years old. Part-time work was something my mom did with a friend who was a Realtor. She asked me to accompany her on a tour to see if there was a property in development.
We walked together into the tiny, five-hundred-square-foot apartment and knew immediately that we would be buying it. It was agreed that 10 percent would be paid towards the purchase price of $150,000 and then 5 percent each year up to completion. This was for three years.
The purchase was a no-brainer for me. It may not seem like a young age to own real estate. However, at that point, I had enough savings for the down payment and liked the idea of a planned savings program over the following years. Then, I thought, by the time I reached my late teens or early twenties, I’d have a place to live in or rent out for passive income.
Buying the condo was my first real investment, and it was also the first step I’d take toward good long-term financial habits. Delaying gratification wasn’t a choice most fourteen year olds would make, but it’s one that, by its definition, paid off later. It’s also something that anyone at any age can practice to get more out of their money.
“The ability to discipline yourself to delay gratification in the short term in order to enjoy greater rewards in the long term, is the indispensable prerequisite for success.” – Brian Tracy
Learn the language of money
You might wonder if I took the correct decisions after hearing my condo story. The answer is “absolutely not.” Do I make all the right decisions today? No. However, making financial decisions, regardless of whether they are right or wrong can help you to learn.
Money, like all languages, is another. Learning a language takes time and it can take a lifetime for you to become fluent. When I hear some people say, when asked who manages their money, “I’m not good at it,” or “Someone else deals with that for me,” I speak up. I’m passionate about how pivotal learning the language of money is to one’s financial foundation. This specified literacy undoubtedly contributes overall to your life’s health and stability.
For example, I’ve never had credit card debt in my life; the debt I had—the mortgage for the condo—was on a hard asset. The differences in interest rates made it clear that I would never consider credit card debt. While a mortgage may have interest rates of 2 to 3 per cent, credit cards can charge as much as 20 percent. When I sold my condo six or seven years later, I had built up equity and the property had nearly doubled in price.
Learning the distinction between good and bad debt is part of being fluent in money language. You can easily identify the differences and avoid common money issues.
Your Good Fortune is Yours
My mom supported me and I was able to buy my condo with some luck. She committed to “matching” my contribution to the down payment and annual payments while I would be solely responsible for the mortgage payments. However, I was ready to make the long-term investment and write the check.
Although I was young, it is easy to get distracted by shiny things like new cars, but instead I gave my life for something that I felt I would enjoy with time. The good news is that you don’t need luck or generous parents to start creating your own fortune. Start now, delay gratification and avoid bad debt. Make financial decisions that will benefit you in the long-term. All of the opportunities are there for you to make a successful life.