In mid-December 2017 I found out that I was going to be a father. Of the many things going through my head one thought that repeated itself was, this is going to be expensive.
The topic of personal finances, wealth, and overall growth have never been more important to me than at this time. My daughter is nearly a year old and although I’m better off than I was nearly two years ago, I’m not where I want to be. Progress is slow but through my research and thinking about this topic I’ve uncovered 3 problems holding me back.
If you’re on a journey to wealth and financial freedom but are feeling stuck like I am, the following may help you too.
Problem 1: Saving doesn’t lead to wealth
I do what most reasonable people do—after every paycheck, I put some money into savings accounts for rainy days and other big-ticket items. Although this is a good practice, it doesn’t help me become rich. It doesn’t give my wife and me more childcare and schooling options for our daughter. It doesn’t get us a car or larger living space in a convenient neighborhood. Saving money just isn’t enough. That’s problem one.
Problem 2: Single point of failure
Problem two is that I’m living check to check, in a sense. Not in the, I have to wait until payday before I can buy x, but if my paycheck doesn’t replenish my bank account, my savings will eventually dwindle to nothing.
This problem has become poignant after the news of my daughter arriving. Another human being is depending on me to provide resources but my financial “system” with which I get those resources has a single point of failure. This is not acceptable.
Problem 3: Cliché advice
To get a better handle on the situation. I picked up the book MONEY: Master the Game in hopes that it will provide solutions to problems one and two previously mentioned. It provided strategies on how to save and earn more from your savings but the benefits of these strategies wouldn’t be realized for 10, 15, 20 years down the line. And this is problem three: most personal finance advice boils down to saving money for retirement or something that will come a million years from when you start. To have more money for my daughter’s nanny, for example, I would have had to start saving for it before we got married. That’s not a feasible solution.
Understanding the problems
As a UX Designer, I’ve learned that understanding the problem will get you halfway to the solution. I think the same applies here. If I were to encapsulate these problems in a way that helps us get to the best solution it would be something like…
How might we earn more money and have multiple sources of income for the expenses of today while saving for the known and unknown expenses of tomorrow?
Since I am not an internet guru I will not suggest a one size fits all solution to this problem. You are a unique snowflake and as such your solutions must be tailored to you. I hope that with this well-defined problems you can start to find a way forward for yourself.
Good luck on your journey.