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Welcome to the first in a series that's as much for my daughter as it is for anyone seeking greater financial clarity and confidence. I learned invaluable lessons on my journey from food insecurity during the 2008 Great Recession to getting out of debt and achieving a seven-figure net worth within five years.

As a former financial advisor and banking innovator, I've seen firsthand the complexities surrounding money discussions. It's a sensitive topic, one that I've struggled to broach with my daughter without it feeling like a lecture. As my friend Harrison Moore told me a few days ago, "No matter how it’s delivered, advice creates a hierarchy."

Once a month I'll be sharing letters to my daughter exploring three keys to financial comfort and security:

How to make money
How to keep money
How to grow money

These lessons transcend the basics of budgeting and saving, aiming to cultivate a mindset geared towards building a secure and prosperous future.

This series kicks off with an attempt to break down mental roadblocks. By sharing my thoughts and experiences, I hope to foster a space for open dialogue. And please, call me out if I get too technical or preachy. My goal is to enlighten her, not lecture. Here’s Part 1:

Dear Bella,

Watching you grow into a self-assured, articulate, and kind young woman has been one of my greatest joys. You’re an example of resilience and resourcefulness, especially through the pandemic and all the extraordinary challenges you’ve faced. My heart swells with pride at the person you’ve become, and I am excited to see the journey you’re embarking on as you step further into adulthood.

In this journey, there’s an essential aspect of life I’d like to discuss with you, one that is often overlooked yet fundamental to your well-being: the art of managing finances.

There’s a lot of advice making it hard to know which to take. Harder still is to take any. I want to share with you not just warnings but strategies and wisdom, gleaned from first hand experiences, as a former financial advisor, and as someone who deeply cares about your future.

Consider these insights as foundational elements for your financial journey, offering guidance to navigate your path with confidence. I share these with you not because I have all the answers, but because I've walked parts of this path myself and learned from each step, stumble, and success.

There’s nuances in this so play close attention. Here’s the first of my series of letters to you:

You’re now a full fledged adult about to make full time income with full responsibility for all of your expenses. As we navigate through this journey of earning more, it becomes crucial to understand how to manage finances wisely to ensure long-term security and comfort.

One significant challenge that often goes overlooked in this transition is ‘lifestyle creep’: as our income increases, so does our expenditure. It's a trap all too easy to fall into, especially with social media and relentless advertising constantly influencing our perceptions of needs versus wants.

When I was a financial advisor, I had a client whose household income was almost $750K per year.

They lived paycheque to paycheque. Savings? Barely there.

3 kids in private school — $90,000/year
Mortgage payment — $14,000/month
Trips — $40,000/year
Vacation property — $40,000/year
Taxes — $400,000/year
Plus living expenses (cars, clothes, groceries, entertainment, etc)

Sometimes people in this situation have to work past retirement age or struggle financially when they have health problems in old age.

It’s hard to plan now for something that seems so far away, but your future self will thank you.

For me, my mindset changed when I had to resort to accepting food donations. I shielded you by picking out the expired cans from the donation boxes as you played with the neighbourhood kids at the park. It was then that I made the decision I was going to learn everything I could about why some people are good with money while others struggle.

I learned, financial management reflects our core beliefs and fears about security, self-worth, and future possibilities. How we interact with money is oftentimes the surface expressions of deeply rooted psychological patterns and emotional responses, shaped by years of experiences and societal messages about success and failure. In this relationship, our financial choices and personal identity merge, influencing the directions we take and the opportunities we seize.

You can know the best practices such as: pay yourself first, don’t eat out so much, don’t have credit card debt, etc, and still fall short as it can be hard to maintain. Focusing on the tactics of managing finances is just dealing with the surface. Changing your underlying relationship with money will make the tactics second nature like how you are intrinsically motivated to go to the gym.

Mindset matters. It’s everything.

You have the power to change your thoughts.

My own journey showed me that seeing myself as ‘broke’ led me to make fear-based spending decisions. For example buying things because they were on sale thinking I might not have another chance to buy it. This mindset didn’t just narrow my financial opportunities; it shaped my reality, turning my fears into self-fulfilling prophecies.

Consider the common thought, ‘I can’t afford this.’ It’s a mentality that gives your power away, impacting not only your financial mindset but also your overall sense of autonomy and ability to find creative solutions to make proactive changes in your life. It’s like looking through a microscope that only lets you see what you can’t do, rather than what you could achieve with a bit of ingenuity and determination.

A more empowering reframe might be, ‘I’d rather have my own apartment.' Such reframing shifts the focus from what you lack to how you can create or find opportunities, underlining a proactive rather than a passive approach to financial management. This proactive mindset is not just theoretical; it has practical applications that can lead to real-world success.

Consider the case from my time running a financial planning practice during the Great Recession. I had two clients who both owned a car detailing business. One felt the dip in business was because people didn’t want to pay for the luxury of getting their car detailed. The other looked for opportunities and found out a couple of car dealerships wanted flexibility instead of having full time staff. He obtained Porsche as a client. This shift didn’t just save his business; it expanded it, demonstrating the power of asking ‘What’s possible?’ instead of resigning to things being outside of your control.

Asking questions such as ‘How can I afford this?’ or ‘What steps can I take to make this happen?’ not only empowers you to see alternatives, find solutions, and set ambitious goals that stretch your capabilities and understanding of what’s possible, but also opens up a world of creative problem-solving and financial planning that can lead to achieving what you once thought was out of reach.

Reflecting on my path, I share these insights in the hope they light your way to a future bright with possibilities

Recognize that each financial decision isn't just about the immediate outcome, but a step towards a future of financial independence and security. This shift in perspective is akin to planting a garden; it requires patience, care, and the foresight to see beyond the current season. And remember, stumbles are part of the journey. Learn from them. Grow.

See money not as a master, but as a tool—a means to craft the life you envision. Begin with your thoughts. They shape your reality.

See challenges as opportunities. I encourage you to ask questions, seek understanding, and embrace financial planning as a key part of your journey to adulthood. Know that I am here for you—not just as a guide but as your biggest supporter. I can't wait to see the journey you'll carve out for yourself.

Let's keep this conversation going, Bella. Your relationship with money will evolve, just as you will. Through it all, I hope you find not just financial security, but also happiness, contentment, and a deep sense of fulfillment. As we continue these conversations, I look forward to seeing how your financial savvy opens doors to opportunities we can only begin to imagine.

With all my love,

Mom

Letters to My Daughter: Charting a Path to Financial Confidence

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