For a long time, my relationship with money was, well, complicated. I remember standing in the parking lot of my restaurant on a Friday night, shivering, wondering if I could even make payroll. It felt like I was stuck on a hamster wheel, chasing money just to survive. But through my journey, especially after becoming financially free, I came to a profound realization: money is not the destination; it’s merely a tool.
The Philosophy of Happy Money
Money is an inanimate object. Its real value lies in the control it gives you over your time and the options it creates for you and your family. The goal isn’t just accumulating currency; it’s about cultivating “Happy Money.” What does that mean? To me, Happy Money is money that brings joy, allows you to create a positive impact, and makes you feel grateful when it enters or leaves your life. It’s money you feel empowered to spend, especially on experiences.
I learned to shift my perception. Instead of dreading paying bills, I started viewing them with gratitude – like the electricity bill, which provides such essential comfort compared to times without power. Changing the way you look at things truly changes the way you look at things.
Understanding Your Money Psychology
Our relationship with money is deeply rooted in our psychology and past experiences. Your inputs determine your outlook. We all carry internal biases and energy blocks, often tied to limiting beliefs and assumptions formed throughout our lives. I was initially angry when I read T. Harv Eker’s “Secrets of the Millionaire Mind” because it felt like he was blaming me. But his message, “Your fruits are in your roots,” made me realize my results were tied to my internal state and beliefs. Challenging those beliefs is key to attracting Happy Money.
We also have different “Money Personas,” like Steve the Saver or Ivan the Investor, and understanding your dominant persona is the first step to changing your relationship with money. Beyond beliefs, emotions like anger can be powerful energy blocks. Dr. Mort Orman taught me that understanding the root of your anger allows you to change your response. As Stephen Covey puts it, the space between stimulus and response is where our power to choose lies. You can choose how you interpret and react, freeing yourself from being “triggered”.
Taking care of yourself physically is also crucial for managing your psychology around money. Simple actions like exercise, spending time in community, laughter, listening to music, meditating, breathing, prioritizing sleep, and eating well can help regulate your happy hormones (Dopamine, Endorphins, Serotonin, Oxytocin) and build resilience.
Raising Financially Literate Children
Teaching our children about money is one of the most important things we can do for them. I made mistakes early on by making it a chore. Kids, like adults, learn best when it’s fun and age-appropriate. Games like Monopoly and Robert Kiyosaki’s CASHFLOW are fantastic tools to introduce financial concepts and language like net worth, mortgage, and income statements. Your language becomes your experience.
Transparency is vital. I started sharing my own financial struggles and mistakes with my kids. Involving older children in the family spending plan (I prefer that term over “budget”) teaches them about income and expenses. Taking them grocery shopping and letting them handle the money makes the finiteness of money tangible.
Teaching them skills is more impactful than just lectures. The key skills are:
- Needs versus wants: Helping them differentiate essential needs from desires.
- Instant gratification: Teaching them the power of delaying gratification, which builds self-control and is crucial for building wealth.
- Price versus value: As Warren Buffett says, “Price is what you pay, value is what you get”. Teach them to think about the cost in terms of hours worked and whether the value received brings enough “happy money” joy.
- Listening: A fundamental communication skill.
Modeling good habits is paramount. I’ve never had a car payment because I always paid cash for pre-owned cars. We teach our kids to pay off credit cards monthly. I even add my children to my credit card account when they turn 18 so they can build credit under my supervision, reviewing their finances weekly.
Involving my son, Michael, in my real estate deals was transformative. He saw his initial $5,000 investment grow significantly, providing him with monthly cash flow. Putting “skin in the game” taught him the language of investing and business in a way no textbook could. Seeing his progress inspired my other children to get involved too.
Mastering the Art of Communication
Effective communication is foundational to a happy family. Realizing we are all different in how we perceive the world is the first step. God gave us two ears and one mouth, so we should use them in that proportion – listen 80% of the time, talk 20%. To be interesting, be interested. Ask empowering, open-ended questions using “What,” “How,” and “Who” to deepen connections, especially with your children.
Remember, what people say is about them; what you hear is about you. Your internal filters color how you interpret information. Just as the stimulus-response model teaches, we have the choice in the space between what happens and how we react. I failed this when I reacted angrily to my daughter making meatballs, interpreting her self-sufficiency through my own filters. Learning to say “sorry,” especially to your kids, is crucial; it shows you are fallible and builds trust. High trust makes communication much easier and encourages your children to come to you for advice.
Families also need core values and structure, much like a successful business. Creating a family placemat with shared values, goals, and prayers can be a powerful tool.
Unleashing Your Baby Money Soldiers
I use the analogy of Baby Money Soldiers (BMS) for the money we earn. Most people are living paycheck to paycheck because they haven’t learned how to deploy their BMS effectively. There are three types of income: Earned, Portfolio, and Passive. The goal is to take your Earned BMS and convert them into Portfolio and Passive BMS that produce more “babies”. You want your passive and portfolio income to pay for your luxuries, not your earned income.
Expenses fall into four categories: Variable, Fixed, Intermittent, and Discretionary (luxuries). Living expenses are necessary, but luxuries can “kill” your BMS if not handled carefully.
As the general of your BMS army, you must decide how to deploy them. Here are some rules of thumb for BMS deployment:
- Save 10% for your Financial Freedom Account (for investing only).
- Spend 60% on necessities.
- Spend 10% on luxuries.
- Save 10% for charity.
- Save 10% for education.
The core question is, “Is your money working hard for you, or are you working hard for your money?”.
We must learn strategies to expand and protect our BMS. Expansion strategies include:
- Investing in cash-flowing assets, like multifamily real estate.
- Creating side hustles.
- Using the “refi and roll” strategy in real estate.
- Utilizing a 1031 exchange to defer capital gains.
- Borrowing money (“mercenaries”) to invest in cash-flowing assets, not luxuries.
- Reinvesting in your education and personal development.
Protection strategies include:
- Utilizing entity structures like LLCs for liability protection.
- Having appropriate insurance coverage; it’s like building a moat around your assets.
- Having cash reserves (BMS in reserve) to handle unexpected events and capitalize on downturns.
- Cutting your losses on underperforming investments – don’t let ego lose your BMS in battle.
- Only investing with partners who share similar values.
Crafting a Happy Legacy
My initial goals for legacy were mostly financial, but I learned it encompasses so much more. Legacy is about passing down values, traditions, life lessons, and skills, not just money. Cathedral Thinking is the mindset of building something that future generations will benefit from, even if you don’t see its completion.
It’s our duty, as the wealth-creating generation, to involve our family in the legacy process and prepare them to be responsible stewards. The stories of the Vanderbilts, who squandered immense wealth because heirs weren’t prepared, versus the Rockefellers, who focused on perpetuating wealth through family offices and education, are powerful examples. Don’t create entitled heirs; teach them the skills and values required to manage wealth.
A key tool for legacy planning is creating a Vision Statement that outlines your values and aspirations for your family. Share this with your family; they might offer valuable insights.
Estate planning is a crucial part of protecting your legacy. It ensures your assets are distributed as you wish, defines beneficiaries, avoids probate, and keeps things organized. Start with the basics: create a will, select guardians for minor children, and consider living trusts or children’s trusts. Documenting all your accounts, assets, and debts is essential for your family. Review this master document annually. Asset protection, through entities and insurance, is also a vital layer of protection for your legacy.
Sign up for my complimentary course:
The Happiness of Giving
A happy legacy also includes the happiness of giving back. Charity isn’t just about money; it’s about giving your time, energy, and attention. I learned this firsthand cooking for the Friars in Harlem after my father passed away. It was a powerful experience that taught my children gratitude and empathy.
Involve your children in charitable activities; it teaches them about service and the world beyond themselves. Giving back can be incredibly joyful. As George Steinbrenner showed, true charity often happens quietly, without expectation of recognition.
The concept of the “Go-Giver,” shifting focus from getting to giving value to others, is a powerful mindset for business and life. Focus on creating “streams of purpose” alongside streams of income. Profit is the fuel for your purpose, not the destination itself.
Your Happy Legacy Journey
Creating Happy Money, a Happy Family, and a Happy Legacy is a continuous journey. It starts with you leading and casting the vision for your family’s future. Have those important, sometimes difficult, conversations with your spouse and children about money, values, and aspirations.
Avoid forcing lessons on your kids. Let them learn by watching you, use games, and be patient. They will come to you with questions when they are ready.
Ultimately, it’s about living a life of abundance, not scarcity. It’s about using money as a tool to build a life rich in relationships, purpose, and shared experiences. Thank you for taking this journey with me.
