The Journey of Building Wealth — Baby Steps

The Journey of Building Wealth: Baby Steps

Have you wondered why there are so few discussions about money? I recently started thinking more about this question while listening to an Andrew Huberman podcast with Morgan Housel. I loved hearing the show; however, I realised the whole discussion ran on a simple assumption: people are open to talking about money.

In reality, though, the screenplay is different. Our financial decisions always have a story behind them– a well-thought-out reasoning. But these significant decisions are based on simple, often flawed assumptions and feelings. For example, the fear of revealing how bad our finances are, or the converse, placing an extreme trust in our financial judgements. But that’s the case with 90% of everyone out there. If so, openly learning and discussing how to manage finances becomes crucial.

To truly do that, we must first be open about discussing money –asking questions, sharing knowledge, and learning from one another. But we never do that. Why? Why’s there a conflict about this? I will try to comprehend these questions in the rest of this article.

The conflict around money

You must know at least one person who lost their entire earnings due to greed. This knowledge prompts many to be over-cautious about talking about money. Especially when it comes to investments, it’s well-known that investing in stocks without knowledge is plain old gambling. But not all investments are gambles. This latter fact is often overlooked. We over-worry about our close ones making the wrong decisions rather than taking care of our own “well-reasoned” decisions.

Everyone has good and bad habits, and we love to brag about our gains but keep silent about the wrong investments we made, the path we missed, the money we regret spending, etc. But the moment we take that step and discuss different investment ideologies, we learn many things.

The right way to put this is through the words of Morgan Housel from the book Psychology of Money.

Your personal experiences with money make up maybe 0.00000001% of how the world works but maybe 80% of how you “think” the world runs. — Morgan Housel in The Psychology of Money

The incident that pushed me to speak about money

I still remember the first time I discussed my finances. I was ranting about how I thought my salary wasn’t enough for me and thought I had to skill up and learn about a better-paying job or ask for a raise. The problem was I was ranting this to someone earning roughly 40% of what I make.

He didn’t say anything. He just asked for my salary and gave me a look I can’t forget. He looked at me like I was a crazy guy who was bragging about the money he was making. But the reality was different. I was saving less than he did by the end of the month.

At that moment, I realised how dumb I was in the ways of money. And I am glad that I had that discussion. Not because I gained a surprising saving scheme but because I realised how badly I manage my finances. I went on to have many financial discussions with my friends, colleagues and my brother.

But they weren’t the best places I learnt about the finances. The best place was, surprisingly, a social media platform. It has some bad light towards it, but it is one of the best places to connect with people we’d have never otherwise met.

Places to discuss

The best place I felt to discuss about personal finance was Reddit. I am speaking more about the subreddits, r/personalfinance or r/creditcards. That was the best place to start. But the conversations would probably make sense if you check out your country’s version of subreddits.

Some of my best financial discussions happened on Reddit. It’s not just looking at where to invest or how much percentage to save. It’s also about choosing your spending behaviours, choosing the right credit cards, using the right approach to planning your savings, and learning about people’s thought processes regarding their spending.

Of course, it’s not only Reddit. You can start joining the local clubs or meet-ups to discuss this with others. You can discuss different strategies with your colleagues or friends, too. But remember, don’t directly discuss your finances with your colleagues. That leads to a whole different set of issues. Trust the ones around you before discussing finances.

We can never make decisions on the paths we didn’t take. We assume we know many things, but we learn that the opposite is true when we meet and discuss with others who know much more than we do. But I have one simple thing to share before you do all this.

Savings don’t mean investments.

I am still learning about my finances and structuring them. Surprisingly, it’s not a one-step system but an iterative process of refining how you make your decisions. Of course, the other simpler way is to read books. Books like The Psychology of Money, Richest Man in Babylon, and any other personal finance book.

Surprisingly, “savings” is becoming synonymous with “investments” these days. But it’s not true. You need not invest in Stocks or Mutual funds to start saving. Have a simpler Recurring deposit to save 10% of what you earn. That’s a starting point. Have some amount in the bank before you think of growing it. The next steps of increasing wealth and becoming a millionaire or even a billionaire are something we can figure out together in the journey.

But that’s the beauty of these platforms. We meet different people, interact with each other, learn together and grow together. Share the best financial advice you received in the comments! That’s the simplest step you can start now.

I hope you found something of value in my article. Thanks for staying till the end!

Until we meet again! Happy reading! ✌️