How to Finance

Over a tea with a longtime friend last week, it occurred to me that she had no idea about how to think about her own finances from a planning, savings and investing perspective. 

“Didn’t you learn this growing up?” I interrupted her and asked her. 

“No!” was her immediate response, starting to acknowledge now into her forties the missed opportunities because of her lack of financial literacy. 

It is not something she learned at home or at school. Despite being intelligent, ambitious and motivated in life, which has shown up in her career, family and health, this has been a blindspot for her. 

I also realized that despite us knowing each other for decades and seeing each other move through different life phases, we had never actually talked about this topic. And if her friends, family and teachers didn’t raise it, where was she supposed to learn how to finance?

To contrast that experience, a few weeks ago I was invited to a retreat in Southern Europe alongside a range of entrepreneurs and investors. I hit it off with one of the other participants, as we were sharing our respective upbringings and how we learned, and didn’t learn, about how to finance. 

In her case, she grew up being encouraged to learn how to invest. Coming from a business family, her parents, grandparents and great grandparents were all in business and from the age of six she remembers being included in a monthly “meeting” where the finances of the family were discussed. 

A substantial portion of her allowance money each month was placed in an investment account and she was given the freedom to choose her own stocks. And more importantly, encouraged to track them. 

As a teenager, she invested in companies like Disney and Apple, because she liked and used their products. As an adult, she started to develop her own values around the environment and encouraged her siblings to not invest in any oil companies.

As she continued to share with me her upbringing, I was inspired by the foresight of her family to bring her up in this way. 

I come from a business family as well. My parents, grandparents, uncles, aunts and cousins all are doing some form of business. Regardless if they are successful or satisfied, they are all in business, and as a result, I have learned a thing or two about finance despite never having studied it formally. 

It took me more than a decade as an adult to develop my own approach and philosophy about how to finance, borrowing from them what I admired and leaving behind what I did not agree with. And as I’ve stepped into my own approach and framework, I have discovered how personal something about dollars and cents truly is. 

Finance is a personal and subjective set of choices. 

Despite the endless amount of advice and knowledge available to any of us, finance is really a representation of one’s values. And to know how to finance requires to know one self. 

How comfortable am I with risk?

What are my expectations of reward?

How comfortable am I with volatility?

What financial traumas did my family experience that have unconsciously influenced me?

Who do I look to for input that I actually trust and listen to?

Learning how to finance really for me has been a journey of learning about myself. And that is really what I am continually seeking. To get closer to my true self and understand my true nature. And the domain of finance is an excellent arena for me to uncover more of me. 

And that is how I learned to finance.