a moment for risk
When I was a little girl growing up on the Southeast Side of Chicago, I dreamt of rocketing into outer space as an astronaut, twinkling my nose and appearing in Mama's room unexplained only for her to be in awe of me, and living in a pyramid with my brown ancient people in Egypt (well, before I know what a pyramid was used for back then). If you were to tell me, "You're going to manage, invest, and own homes", I would've said, "whaaaaaat does that mean?" Ha. At times, I still ask myself that.
Growing up, I always thought that the key to keeping your head above water was to hold on to every penny you earned and only spend 'as needed' on things that really matter. From Leggos to bills, that understanding has dominated my life. It wasn't until I began observing my sister and working in the financial industry that my view began to change.
a little about me
I've always wanted more out of my life. My family always told me, "Don't do as I do. Do better than me." I come from a family of incredibly hard-working, educated, and loving people, especially my matriarchs. We didn't have the resources and know-how to break down as many financial and socioeconomic barriers placed before and in front of us. And yet, we persevere and pass on our life lessons, wishes, and dreams to the next generation in hopes that they will carry the torch, live better lives, and pave new paths for those who come after them. So, from my family, i learned what i loved, what i wanted, and most importantly, what i didn't want for my life.
I didn't want to do what everyone else was doing - school, working in corporate America until 69, retiring, and then finally living life. I didn't want to wait until I was 69 to finally live. I didn't want to live paycheck to paycheck, like most of my hardworking family and people in my community and city. I didn't want my pay and worth to be dictated by someone else's idea of what it should be...at least not the majority of it. I wanted to control my own destiny and value placed upon it.
I love traveling and immersing myself in new ways of life. I love giving back and investing in people and organizations that may society better. I love having the freedom to do work that makes me feel more fulfilled. I love the flexibility of spending time with my loved one or spending money on the things that I need to better myself or better lives around me. I love having the option of freedom. One way to get just one step closer to the feeling and reality of freedom, for me, is becoming more financially free.
what does it mean to be free?
To be financially free...what does it take? Ha. Often, simple questions take the form of life questions.
In the past, I'd earn money and hold onto it as long as I could. I became known in my family for being the best at holding onto a dollar. I'd spend the least amount possible for the things I needed most (such as hygiene products, food, transportation, doctor's visits, etc.) and saved the rest for the next time I needed to purchase necessities. I was consistent with this method until college when I discovered credit cards (oh how quickly the mighty fall) and my needs began to include credit card debt, which still got paid off but made it more difficult to save. Once I became a working woman, I struck a balance between spending on my needs, paying off my credit cards as quickly as possible and then locking them away, and making purchases on things I wanted (such as plane tickets, a car, an apartment, etc.). I was still holding onto what I earned, and I began to understand how easily the earn-spend-earn-spend cycle was so common. My paycheck became my means of living and simply exchanging the same funds from one account (mine) to another (a store, CTA, the government) wasn't going to get me closer to the freedom I was aiming to achieve. First, I needed to manage my debt more effectively so most of my check doesn't just go to paying bills and paying off credit card debt each month. Then, I needed to save more of my check to allocate to create a cushion for my future (retirement, emergencies, traveling).
Once I got better at managing my debt and saving more of my check, I discovered that I was still missing something.
Take one dollar.
You can hold on to one dollar and in a year, exchange that dollar for something of similar value if inflation stays the same (or if average prices of your necessities stay the same) or exchange that dollar for something of lesser value if inflation rises (or if the average prices of your necessities increase). Either way, if you hold on to the dollar (in our economy), your dollar will either remain at its current value or decrease in value. Another way to put this is: your dollar has zero or negative return on its original value.
I was either: (a) holding on to my dollar and exchanging it, continuously, for something of similar or lesser value; or (b) holding on to my dollar and saving it to eventually exchange it for something of similar or lesser value. bottom line, I worked with what I had and I did it well. And now I needed to know, how could I make what I had work for me? how do people increase what they have using what they have?
What if you took that same dollar and could either exchange it for something that would increase in value over time, or hold it in something that would increase the value of that same dollar over time? another way to put this is: your dollar has a positive return on its original value. this was the piece of the puzzle that I was missing!
what changed my view and my life
At age 24, I had gained a tiny slice of insight as to the power of time value of money and the power of compounding. When I looked at the Oprah, Warren Buffet, Shark Tank gurus, John Rogers, Jim Reynolds, Mellody Hobson, and those able to have their dollar increase in value and make more dollars, I noticed that they understood the two powers (time value of money and compounding) and use them to their advantage.
They took risks and they managed risk. Risk? Yes. Risk.
You see, making the decision to either hold onto your dollar or exchange that dollar for the possibility of increasing its value in any way involves risk. In investments (and a very simplified version), high risk = high reward and low risk = low reward. Risk taken depends on the person taking on the risk. The idea of risk can be scary. I rarely take risks with my finances...RARELY. But I had to learn that in order to increase the value of my dollar, I needed to take a risk and invest my dollar in something that works for me - (1) property, which is lower on the risk scale with returns/rewards that increase the value of my dollar over time; (2) me via a master's degree and time gaining experience in a career; and (3) others via entrepreneurial endeavors that help people gain tools to design the lives they want to lead or via organizations that help educate and equip people with tools necessary to make the world a better place.
what I learned and gained
I needed to do more than hold on to my dollar in order to progress on my journey closer to financial freedom. I needed to take risks and exchange that dollar for the possibility of increasing its value through investing in things that allow my dollar to multiply over time, me to gain skills that eventually will better my life and career, and others to make life more fulfilling and the world a better place.
My net worth has tripled since I was 24. I am growing professionally and am falling in love with new ideas and innovation both inside and outside the classroom. I get to be a part of the journey of many incredible people as they create new possibilities for their own lives and the lives of others - it's truly an honor and a privilege.
I am still learning, still making mistakes along the way, and still discovering things I don't know. I am still afraid of risk, in most forms, and yet, I embrace it (ha, reasonably). On my journey towards financial freedom, I can say that I am progressing even in moments where I am still. I am building my relationship with risk because it is one of the many keys to my freedom.
whether it's your talent, skills, expertise, money, heart, ideas, or dollar, you and your future are worth the risk.
- You're Worth It
P.S. Thank you to my big sister for always taking the time to share her life lessons with me, even the very tough ones. I am a better person, sister, daughter, niece, woman, friend, investor, and student because of you. I love you. Always.