Years ago, I once knew someone who was unhappy with her husband. Let's call her Nancy. To fill her void, Nancy went on dates with various men while her husband stayed late at work. At the cafeteria one day, Nancy mentioned she was falling in love with one of her men named Jack. Jack was handsome, single, charming, and financially well off. Something about him made her heart sing.
What first turned out to be casual coffee once a month evolved into dates twice a week. On Tuesday, they'd meet up after work for drinks and dinner for a couple hours. On Thursday, they'd go to spin class together, followed by a meal and sometimes a movie, and then some extracurricular activities back at his place. She wouldn't get home until 1am every Friday morning to her husband's dismay.
As an acquaintance, it was clear to me her path was only going to lead to trouble. But who was I to give her tough love about what she should and shouldn't do outside of her marriage? I wasn't her brother, father or boss. I kind of gave her a generic, “you should do what makes you happy” when she asked for my advice. I didn't want to tell her to leave her husband because I was too afraid of what would happen if she did. What if I gave her advice that made the situation worse?
I found out months later that the husband followed her one Thursday evening. He confronted them screaming before they could go into Jack's apartment. He then pulled out a wrench, pointed it at Jack, gave one last yell and smacked him in the temple with one violent swing. The husband then dragged his wife back to his car by her hair and began berating her for being unfaithful.
They tried to work out their differences, but they finally filed for divorce a year later largely because Nancy was four months pregnant with Jack's child! It's hard to hide a growing bump after the first trimester. Nancy's husband told all her friends, family members and colleagues what she had done. He even shamed her online. And even Jack, Nancy's lover, disappeared during Nancy's third trimester like a coward. Nancy was devastated.
When I visited Nancy and her baby one afternoon to see how they were doing, she told me, “Why didn't you set me straight at the time?! I needed to hear some tough love!” She then began to sob. A blanket of guilt smothered over me.
Tough Love With Personal Finance
With over eight billion people in the world, chances are high we'll all find someone to spend our lonely time with. There's someone for everyone if you're not too picky. With trillions of dollars in the world, perhaps many of us believe we'll all be financially independent even if we don't get our financial act together.
Unfortunately, money doesn't naturally flow to those who need it most in a capitalistic society. Money flows to those who do the most to get it. If we choose to live in America, or any capitalistic country, then we must accept that those who are luckier, smarter and harder working will tend to attract more money than the rest. And once you have money, it's much easier to create multi-generational wealth, which will really piss off those with no head start.
Luckily, the internet serves as the great equalizer for anybody who has enough motivation to start their own site, take advantage of technology, and leverage an unlimited demand curve. And lucky for those who don't have the motivation, there are sites like mine you can read for free to gain some perspective.
The reason why I'm very frank with many of my articles is because there is NO REWIND BUTTON. Building wealth for financial freedom is about exercising good financial behavior over a long enough period of time. I could coddle you into thinking everything will be alright if you buy that luxury car and save just 10% of your income every paycheck, but I would be lying. Showing kindness is ineffective if I'm not going to pay off all your debt, provide you a better job and give you some money. I'm sorry, but my resources are limited.
Don't wake up one day as a 65 year old with an “oh shit” moment. Time goes by way too fast. And if you do wake up old and financially destitute, know that it was probably because nobody around you gave a damn to help set you straight.
You might think I sometimes lack compassion on Financial Samurai, but it is precisely because I care, which is why so many of my articles are raw and unbuttered. I also selfishly care because I have no desire to relive another financial crisis!
By providing a framework on whether to pay down debt or invest, you should be able to make better financial decisions.
By giving you some guidance on various asset allocations by age for your portfolio, you'll decrease your risk of blowing up in a downturn.
By providing net worth targets to shoot for by work experience, hopefully you'll get motivated to save and earn more if you are behind.
I'm not a journalist who will write a 5,000 word article saying the middle class is in trouble while offering zero solutions to get out of trouble. Our personal finances are just too important not to find solutions. This is Financial Samurai!
Nobody Will Save You But You
“Do not handicap your children by making their lives easy,” Robert A. Heilein.
Look back at every single mistake you've ever made. Throw in all your regrets as well. Do you wish someone told you the hard truth, even though it may have hurt your feelings? Or do you wish nobody said a thing about the realities of your choices? With every single mistake I've made, I wish someone would have showed me all the downside risk.
I WISH someone slapped me silly in high school about the repercussions of taking a prank too far senior year. But I was too crafty. It would have saved me a lot of stress during college, wondering whether I'd ever get a job.
I WISH someone had educated me more about past real estate down cycles and how it can devastate a person's finances if they have too much debt. I might have saved hundreds of thousands of dollars and avoided feeling tremendous amounts of regret and stupidity years later for buying a vacation property.
I WISH someone would have told me more aggressively to stop day trading my portfolio while at work. It was allowed, but it negatively affected my work performance, raised red flags to senior managers and ultimately wasted my time because I couldn't make money for a sustainable amount of time. I'm sure my pay and promotion were adversely affected because I lost the support of one MD who had to review all employee trading.
And now I WISH someone could give me guidance on all the things I'm doing wrong online. I'm sure I'm missing a lot of obvious opportunities. Everybody has their own issues to deal with, so I understand. I've just got to figure things out for myself.
If someone is giving you tough love, LISTEN. They've probably already been through what you are going through. Thank them for taking time to give you valuable advice. It's much easier to say nothing because giving tough love hurts! But tough love is still love. It's the people who no longer care about you who don't bother saying anything.
Wealth Building Recommendation
Track Your Wealth For Free: Personal Capital's free financial tools so you can track your net worth, analyze your investment portfolios for excessive fees, and run your financials through their fantastic Retirement Planning Calculator. Those who are on top of their finances build much greater wealth longer term than those who don't. I've used Personal Capital since 2012. It's the best free financial app out there to manage your money. Sign up here today for free.