Want to Understand Money Better? Easy. Observe Your Friends

Sharing 3 lessons from 3 friends

Money is a confusing topic.

Robert Kiyosaki is right. We were never taught about money in schools. That is one reason we are clueless about dollars.

But many do not know about the second reason.

Money is a dynamic discipline. By that, I mean,

• It is not simple math — $1 is not $1 one year down the road due to inflation.
• It is not direct science — Investments are valued based on the unknown future.
• It is not straightforward accounting — Our psychology governs our money patterns.

There is a tremendous difficulty for teachers to show us the way.

There are no simple answers. Only different pathways.

Plus.

They are learning about money too.

My Friends Teach Me More About Money Than All My Teachers Combined

Our observations help us learn about money.

Here’s why.

No one talks about money. Our parents and teachers taught us not to talk about money publicly.

Financial leaches may target us. Do you remember those friends who got you to pay for their meals, movies, cigarettes, and hour-long billiard sessions?

From that perspective, our elders are right.

But that leads to one problem. We can only learn about money indirectly.

That is my path as a life-long student of money.

I learned more about money simply by observing my friends.

Darryl — The Hardworking, High-Flying Scrooge

This guy, I mean, works hard.

I cannot compete with him. Darryl can keep going even after working 16 hours that day. He is an ultramarathoner workhorse.

Darryl is an undisputed asset to his company. They know it. His ex-companies too.

They trip over themselves to keep him. They have a 20% success rate.

This is because,

• He routinely beat sales targets by 200%.
• He has unbelievably high client loyalty. They follow him.
• He is always available. Call him on Friday at 10 pm. He will pick it up.

I see sweat equity through Darryl. And it has paid off for him.

He secures a pay increment of (at least) 25% per year.

Want to beat inflation? Invest in him.

But Darryl is not a victim of lifestyle inflation. He eats the same affordable meals each time we meet.

Darryl does not drive. He cabs.

I summarise his money mindset in the following bullet points.

• “It is never about how much you earn. It is about how much you keep.”
• “Why do I have to spend on a car when all my public transport expenditure is claimable?”
• “I believe in eating with my clients. They get happy. I can get my money back via company claims.”

Many call him Scrooge D.

Not me. I find Darryl financially shrewd. He showed me the importance of keeping his money.

I subscribe to his thinking and tactics.

Dominic — The Guy with an Embarrassing Bank Account and an Unbelievable Investment Portfolio

Let me say this.

I did not have a good impression of Dominic when we met for the first time. I find him weird.

He is occasionally generous and routinely stingy.

It was hard to reconcile his behavior. And he would avoid the topic when I probed.

And then, one day, one thought struck me when I was checking my investment account.

Dominic paid for dinner 2 days ago. REIT B paid distributions 3 days back.

I thought it was an uncanny resemblance. But I continued to observe.

It became clear to me that his generosity follows the distribution cycle. I confronted Dominic months later.

Me: “Dominic, tell me. Are you broke?”

Dominic: “Yes, yes! Let me show you my bank account.”

Me: “No. Show me your investment account.”

He paused and stared at me for seconds. Dominic said no. I said okay. I told him I figured it out.

Dom smiled. I said the following.

“I endorse your asset acquisition first strategy.”

Thomas — The Bankrupt of the Future

Money is an odd topic.

Those with money are fiscally prudent. Those without spend as if mass extinction is here.

I am sure everyone has a Thomas around them.

Let me list what I know about Thomas and you to draw your conclusions.

• He has 3 cars.
• He travels 4 times a year.
• He flies only first or business class.
• He owns 2 condominiums (not rented out).
• He wears leather shoes that cost 4 digits per pair. He has 20-plus pairs.
• He says life is too short and wealth accumulation is impossible with his salary.
• He earns USD 4,500 monthly and is a proud holder of 8 credit cards.
• He maxed out the credit limit of his cards monthly.
• He tries to save 5% of his salary.

Thomas would complain that he was not earning enough. He job hops every quarter, hoping to get a 10% pay increment.

He never did.

His CV raises many eyebrows.

That said, this is my question.

What happens when you have a stagnant salary while your credit card borrowings keep increasing?

It does not take an Einstein to figure out the answer.

Thomas was declared Bankrupt 2 months ago.

I thought he learned his lesson. What he said shocked me.

“I would have never gotten into such a fix if I earned more money.”

A bigger fix in the future is guaranteed.

Parting Keynotes

Money is a difficult topic.

It is because money is simply an instrument, and the user determines how it is used.

Our money mindset matters.

Everyone has a different money mindset. How we think about money evolves too.

Therefore, we have millions and billions of money lessons around us. Our friends are our best money mentors.

It is up to us to observe, learn, discard, and elevate our money game.

Because when we do, our mindset changes for the better.

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Oh, oh, you can buy me a cup of black too! Thank you!