I’ve lived by the, “Save early, spend later,” motto, influenced greatly by my pragmatic mom, since I first began earning money at a young age. I started with odd jobs like babysitting and refereeing hockey games, moved up to working at fast food restaurants, and, eventually, started my own cleaning and car-washing businesses.
At each step, I learned about delayed gratification: I could either spend my money on video games, sports equipment, and other material things, or I could invest it in my future. Fortunately, I chose the latter.
In my early teens, I took all of the money I’d earned and put it towards a down payment for a condo. That choice and others taught me about saving and managing my money. They’re key lessons that everyone can use to achieve long-term financial security, and the good news is that it’s never too late to learn them.
Making My First Investment
When I was fourteen years old, my hometown of Vancouver was in the early innings of a condo boom. My mom had picked up some part-time work with a good friend of hers who was a realtor. One day, she asked me to go with her to look at a property under development.
When she and I walked into the less than five-hundred-square foot show suite of the apartment, I knew in my gut that I would buy it. The deal was to put 10 percent down against the $150,000 purchase price upon signing and then pay 5 percent per year until completion, which was scheduled for three years out.
The purchase was a no-brainer for me. Although fourteen may sound young to buy real estate, by that time I had saved enough for the down payment, and I liked that it would be a forced savings plan over the next few years. Then, I thought, by the time I reached my late teens or early twenties, I’d have a place to live in or rent out for passive income.
Buying the condo was my first real investment, and it was also the first step I’d take toward good long-term financial habits. Delaying gratification wasn’t a choice most fourteen year olds would make, but it’s one that, by its definition, paid off later. It’s also something that anyone at any age can practice to get more out of their money.
Learning the Language of Money
Hearing my condo story, you might be wondering whether I made all the right decisions. The answer is “absolutely not.” Do I make all the right decisions today? Of course not. But making financial choices, whether they turn out to be right or wrong, lets you learn.
Like it or not, money is another language. It takes time to learn the language and then it takes a lifetime to be fluent. When I hear some people say, when asked who manages their money, “I’m not good at it,” or “Someone else deals with that for me,” I speak up. I’m passionate about how pivotal learning the language of money is to one’s financial foundation. This specified literacy undoubtedly contributes overall to your life’s health and stability.
For example, I’ve never had credit card debt in my life; the debt I had—the mortgage for the condo—was on a hard asset. Just looking at the different interest rates convinced me to never take on credit card debt; while a mortgage could be 2 to 3 percent interest, a credit card is often close to 20 percent on the debt. Six or seven years later when I sold the condo, not only had I built equity in the property, it had more than doubled in value.
Part of becoming fluent in the language of money is learning the difference between good debt (delayed gratification debt that will benefit you in the future) versus bad debt (money down the drain forever). If you can tell the difference, you can avoid many of the common money problems people face.
Create Your Own Good Fortune
When I bought my condo, I admit I had some good luck with my timing as well as support from my mom. She committed to “matching” my contribution to the down payment and annual payments while I would be solely responsible for the mortgage payments. But I was in the game and willing to write the check into a long-term investment.
At that age, I could have gotten distracted by something shinier like a new car, but I put it all on the line for something I had a feeling would appreciate with time instead. The good news is that you don’t need luck or generous parents to start creating your own fortune. You can begin right now by delaying gratification, avoiding bad debt, and making financial choices that will serve you well in the future. You have all the opportunity in the world to build a life like mine; I just started a little earlier than most.